FIFO vs LIFO in Electronics Manufacturing: Insights for OEMs and EMS Companies
For electronics manufacturers, managing inventory is more than a numbers game. Every day, OEMs and EMS companies navigate volatile component pricing, global supply chain disruptions, and the constant threat of excess or obsolete stock. Choosing the right inventory method directly impacts cash flow, operational efficiency, and the ability to monetise surplus components.
Most electronics companies worldwide rely on the FIFO (First In, First Out) method because it aligns with the rapid obsolescence of components and high turnover rates. LIFO (Last In, First Out) is rarely used, but it still appears in niche contexts, particularly in US GAAP-compliant subsidiaries managing stable, long-life components. Understanding both methods helps you make informed decisions that improve financial reporting, reduce waste, and streamline operations — especially when paired with innovative stock solutions like Component Sense's InPlant™.
