What is First In, Still Here?

The first in, still here term refers to very slow-moving inventory. The acronym (FISH) is a take-off on the FIFO and LIFO 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.

Causes of FISH Inventory

FISH inventory can have many causes, including unexpectedly low sales, excessive inventory purchases, and poor materials management. For example, a purchasing manager might have taken advantage of a volume purchase deal in order to acquire a large amount of raw materials at a cut-rate price, after which the company cut back on the use of that raw material. The result is a large amount of unused inventory sitting in the warehouse.

How to Minimize FISH Inventory

The best way to minimize FISH inventory is to continually examine on-hand inventory balances to determine whether any items are unlikely to be sold in the near term. If so, the purchasing department should sell these items off for whatever price can be obtained. This may result in the short-term recognition of a loss, but also converts the inventory into cash while it still has some value.