In the world of business, there is a term that you may have heard – FISH. Very few will know what this stands for and it is unlikely to be mentioned in any official business planning publications. It does not exist in any textbooks or academic papers. Nonetheless, it is an important concept for entrepreneurs to understand when running a business. This one word can explain why some companies continue to struggle in their quest for success, whilst others find winning the promotional wars almost effortless.
Overview: What is First in Still Here (FISH)?
First in Still Here (FISH) is a term that refers to very slow-moving inventory. This can be a problem because it indicates that there is an excessive working capital investment in inventory and could also indicate an excessive risk of obsolete inventory.
The term is a take-off on the FIFO (First In, First Out) and LIFO (Last In, First Out) acronyms that describe inventory cost layering systems. When a business has a large amount of FISH inventory, this means there is a high risk of obsolete inventory that must be written off. A large amount of FISH also indicates that there is an excessive working capital investment in inventory.
There are many causes for FISH inventory, including unexpected low sales and excessive inventory purchases. Poor materials management can also lead to poor performance in this area.
3 Drawbacks to First in Still Here (FISH)
First in Still Here (FISH), a term used to describe slow-moving inventory, can be a problem for many businesses. There are three main reasons why it can be detrimental.
1. It means that there is an excess amount of inventory on hand that may not sell before it goes out of date.
This is often the case with products that have long shelf lives and/or low demand. The longer the product sits on your shelf, the less likely you are going to sell it at full price.
2. It indicates poor materials management within the business itself.
If you have a lot of FISH on hand, this means you over-ordered materials and/or made mistakes in purchasing decisions which led to having more than you need for current production levels.
3. It suggests that sales are lower than expected—or that they will be.
This also means sales could be lower than expected in the future. Businesses will therefore want to reduce their current stock levels in order to avoid writing off obsolete product later down the line.
Why is First in Still Here (FISH) Important to Understand?
The answer is simple: it’s because First in Still Here (FISH) indicates whether your business has enough money in its operating capital account or not. If you have too much inventory on hand and it’s not selling quickly enough, then you’ll have to write off some of that inventory as obsolete or defective. This means you’ll need to replace those items with new ones—but since you’re already spending all your cash on paying for the old stuff sitting on the shelf, this can lead to serious financial troubles for your company if left unchecked.
Additionally, First in Still Here (FISH) is one of the Six Sigma terms used to describe the movement of products through your supply chain. The concept relies on the premise that if you are able to keep your product moving at a steady pace through your supply chain, it will increase your chances of success by preventing bottlenecks and reducing inventory costs.
In summation, it is an important concept for businesses to understand because it can have a massive impact not only on the inventory management strategy but also the overall success of the business.
An Industry Example of First in Still Here (FISH)
Item-based businesses are made or broken almost exclusively on the back of their inventory management practices. In order to reduce the amount of First in Still Here (FISH) inventory, companies need to consider their products’ life cycles and the costs involved with keeping the product on hand, as well as costs associated with ordering more when needed.
It is not just individual companies that struggle with this; so do entire industries. The food industry is notorious for overstocking perishable food items, and the waste is not only financial but also environmental as well. Over 30% of food purchased and 45% of crops harvested are wasted, every year, industry-wide. This translates to over $160 billion wasted annual in the US alone.
It’s a plague that encompasses other market segments. When it comes to unsold inventory and wasted products, the fashion and beauty industries continue the disturbing trend with increasing loss figures year over year.
3 Best Practices When Thinking About First In, Still Here (FISH)
The world of business is all about staying ahead of the competition and maintaining a competitive advantage. That’s why it’s important to think about first in, still here (FISH) inventory in terms of tested and proven best practices.
1. Consider reevaluating your inventory management system.
Doing this can tell you if there is a way to reduce the amount of time it takes for products to move through your warehouse and into customers’ hands.
2. Try implementing a new FIFO (first in first out) policy or LIFO (last in first out) policy.
This can enable you to minimize the overall age of your inventory at any given time.
3. Look at ways you can optimize your supply chain.
For example, work with multiple suppliers instead of just one or two so that your product flow isn’t dependent on any one supplier going down or having problems with their delivery schedule.
Frequently Asked Questions (FAQs) About First In, Still Here (FISH)
How can I tell if my inventory is considered FISH?
There is no set definition for what constitutes FISH, but there are some guidelines that can help you determine if your inventory is moving too slowly or not at all. Items such as seasonal items and luxury items may qualify as FISH because they may be out of season before they have sold out completely or because they are not deemed necessary by the average consumer.
How can I avoid having slow-moving inventory?
Avoiding slow-moving inventory requires careful planning and analysis of your business cycle as well as market trends. By analyzing past sales data, you can predict future demand for your products and services more accurately.
Can data analytics be used to identify and remove FISH inventory?
Yes. Data science can be used to identify FISH first by identifying the characteristics of slow-moving inventory, then using machine learning algorithms to automatically detect which items are FISH. With this information, managers can make decisions on how best to manage their inventory so as not to waste resources or incur unnecessary costs.
Bottom Line: Adjust to Your Company and Market
In general, if inventory levels are too low, customers may not see your products and services as readily available, which can make them less likely to come back. Conversely, if your inventory levels are too high, you may be forced to shut down or lay off workers due to excess costs. Although there is such a thing as perfect inventory levels, the best business practice is to make adjustments based on the specific needs of your company and the markets in which you operate.
For many companies in a variety of industries, the first thing that comes to mind when they think about FISH is JIT (Just In Time) inventory management. However, having the right inventory knows no bounds. With a quality assurance plan in place, you can find and eliminate these mistakes before they cost your business critical time and money.