A principle involving a precise production and transfer order: the first part to enter a process or storage location is also the first part to leave that location. (This ensures that stored parts do not become obsolete and that quality problems do not snowball into inventory.) FIFO is a necessary condition for implementing a pull system. 

The FIFO sequence is often maintained using a colored lane or physical channel that can hold a certain amount of inventory. The supplying process fills the lane from the upstream side, while the customer process sources products from the downstream side. If the lane becomes too full, the supplying process must stop producing until the customer removes some of the inventory. In this way, the FIFO lane prevents the supplying process from producing too much, even if that process is not linked to the consuming process via continuous flow or a supermarket. 

Below is an example of a FIFO street with five units in the street:

FIFO is one way to regulate a pull system between two separate processes when it is not practical to keep an inventory of all possible types of parts in a supermarket. This is the case, for example, when the parts are all unique, have a short shelf life or are very expensive and not needed very often. At that point, the removal of one part in a FIFO lane by the consuming process automatically leads to the production of one additional part by the supplying process.