Randall Castillo Ortega discusses proper warehouse management for import companies

Performing excellent administration and control of distribution centers that import companies may have requires a lot of work. However, if certain ideas are implemented correctly in an efficient way, most of the productivity problems in the warehouse could be solved easily. Thus, it is essential to assess the products’ activity profile, the design of the warehouse and the products’ movement within the distribution center. The goal of this process is to reach the qualifications of a world-class warehouse. Randall Castillo Ortega, an entrepreneur and import/export expert from Costa Rica, provides insight into how warehouses need to be properly managed for import businesses.

Good management in distribution centers depends on the knowledge that the directives have of the type of structure for storage that the company has. This is mainly knowing if the company has a distribution center or if it has a warehouse or a warehouse. The Distribution Center can be defined as the physical place where one or more companies store different types of goods or raw materials, whether manufactured by them or acquired from a third party. In these spaces, dimensions are handled that can range from very large (pallets with merchandise) to single units. Explains Castillo, “Normally, distribution centers are not located in the company’s own facilities, but outside them, in areas of easy access and preferably near highways, airports or ports. This facilitates a quick receipt and dispatch of the goods they manage.”

On the other hand, the warehouse can be defined as the physical space of a company in which finished products, raw materials or products in the process are stored. It is not as large as the previous one and is located on the company’s premises; it is only intended for storage without any other work. Once the physical space that the company has to store the goods is identified, there are several aspects that must be taken into account in order to carry out a good storage management, such as what type of warehouse the company should have, what activity profile the warehouse has, what operations will be carried out in the warehouse or distribution center, etc.

A very important task of the management of the companies, especially of the logistics management, is to evaluate the functioning of their distribution center in terms of management indicators used. These can be quality and accuracy in inventory, merchandise turnover, storage costs. Together with the production management, it must be evaluated if the production system that the company has, either for inventory or on order, can be supported by the warehouse.

For a warehouse to acquire a competitive level, it must be seen not as the place where the goods remain, but as a distribution and product consolidation center where much more complex tasks are carried out and with greater responsibility for the final product. Additionally, the concept of profitability has become very important; therefore, adequate management of distribution centers optimizes the use of storage space, reducing obsolete products and reduces the amount of inventories that are stored.

Good management in distribution centers also requires management levels to know in detail what kind of operations their warehouse should perform. A good assessment can identify whether more tasks are being carried out than are necessary and resources are being used on tasks that are not of your own work. Below is a brief description of the different tasks that take place in a distribution center.

To achieve good management in the distribution centers and knowing the type of warehouse, the behavior of the products that are stored and the tasks that are performed inside, it is necessary to define the most appropriate management indicators to evaluate their performance. These indicators can be classified as follows:

Associated with the activity profile of the warehouse, the layout (plant distribution) that the distribution center has must be evaluated in order to relocate the products, if required. As mentioned above, the products of higher turnover should be as close as close to the aisles, especially the main aisle. Asserts Castillo, “In a warehouse there are two types of corridors. One type is the secondary aisle, which should have a width ranging from 90 cm. up to 2 meters. These spaces serve as access to the products and do not allow the use of material handling equipment of large capacity and size, unless they are specifically designed for this type of area. The main corridors should be 3 to 6 meters wide.”

Another aspect that should be considered for stable storage management is the evaluation of the variety of materials that the distribution center applies for handling and storage. The main factor to be evaluated is the activity profile of the product being stored. In other words, the higher the activity profile, the greater the turnover. In this sense, what is required, then, is to have easy access to the material and movement capacity from the storage position to the loading docks.

Although the most common way to store products is to use simple shelves of one or two positions, the rotation of the product, the activity profile and the ease of access should be evaluated. Thus, for items with a very high turnover, equipment is used that allows them to be easily collected. To achieve the above, dynamic shelves by gravity can be used.

If the stored product has a high activity profile, does not require specialized material handling equipment and is collected manually, it is recommended to use shelves for dynamic picking. These shelves, like the dynamic gravity shelving, allow easy access to the different storage positions and also maintain FIFO (first in-first out) inventory.

For good management in the administration and control of a distribution center, the senior management of companies must constantly seek to apply world-class standards, processes and technology in their warehouses.

About Randall Castillo Ortega 

Randall Castillo Ortega has been involved in the financial space virtually his entire professional career. In addition to having founded the financial lending firm RACO, he is also an avid outdoorsman and, along with his family, is a huge community supporter.  He regularly participates in community ceremonies and events organized to drive a better environment for children and families.

Contact Information

Randall Castillo Ortega

Communications Manager

Randall Castillo Ortega

(506) 8829-0729

info@racoinvestment.cr