Smart rack solutions

Wpis dostępny jest także w języku: polski

Consignment stocks (in short, suppliers’ warehouses separated at the company’s headquarters) were initially used mainly in international trade and this is how they are nowadays understood in the light of the VAT regulations. The sources of their creation should be sought in the industry, where there has always been a problem of ensuring continuity of supplies of raw materials and components. In recent years, however, consignment warehouses are constantly gaining in popularity, also in domestic trade and, what is significant, they are gaining popularity in trade industry.

Bartłomiej Łatka, Expert in retail and logistics at Euvic IT

There are at least a few reasons:

  • Taxes

The key issue here is the characteristics of the consignment warehouse agreement, thanks to which it is assumed that the ownership of the delivered goods passes to the recipient not at the time of delivery to the recipient’s premises, but only after the physical release of the stored goods from the consignment warehouse. Although initially tax offices questioned the regulations in this area, in 2018 NSA issued a legally binding ruling according to which, if the consignment warehouse mechanism is used, VAT may be charged periodically.

  • Cash optimisation

Customers who want to ensure continuity of supply have to set up buffers and logistics minimums – and these must be financed. Thanks to consignment warehouses, invoices are only issued when the goods are collected for further use and the cost of the buffer is passed on to suppliers.

  • Logistic optimisation

The logistic constraints affect suppliers to a much greater extent, who can significantly reduce their transport and production costs thanks to the consignment warehouse. On the other hand, shifting the responsibility for keeping to the logistic minimum reduces the amount of work that the customer has to do to coordinate deliveries.

Comprehensive technological support

The practice of creating consignment warehouses is difficult, mainly due to concerns about the unclearness of Polish tax law in this area and its possible multiple interpretation by officials. The biggest challenge is to ensure accountability of all products entering and leaving a foreign warehouse, which cannot be done without an IT system.

The challenge is as follows: the supplier must ensure the identification of all goods in the foreign warehouse (which is generally not accessible) and automatically generate accounting documents (invoices, WZ, PZ) based on movements in that warehouse.

It takes a comprehensive approach to Etisoft Smart Solutions. The solution offered by this company consists of RFiD codes, which are used to mark logistics units. These codes are delivered to the suppliers who, when sending deliveries to the recipient, mark the products with the received codes. Optionally, it is also possible to permanently mark the baskets in which the goods are stored in the consignment warehouse (as shown in the picture).

The fact is that a single RFiD tag costs less than 50 cents and saves time of work. There are antennas in the warehouse, which count the RFiD codes at specific time intervals and then update the stock on this basis. If the system detects that a container with a specific tag has left the warehouse, appropriate documents will be generated and the invoice data will be updated. At the same time, the supplier can monitor the inventory on an ongoing basis and dynamically manage the delivery or production of a specific assortment.

An additional feature of the Etisoft SMS (Stock Management System) is to locate the spatial location of specific boxes – both on the rack map and by means of an audio signal sent from the manual collector.

In the picture below, an optional version of the intelligent rack with mobile RFiD antenna – this solution improves scanning resolution on high density racks.

Summary

Today’s retail needs smart solutions. Implementing improvements, including in the warehouse space, requires technological support. However, using the possibilities offered by technology in this area should be treated as an investment, not an expense. It is an investment in the efficient operation of the company, in faster and more efficient customer service, in better management of deliveries or production. It is an investment that will not only pay for itself quickly, but above all will pay for itself for years.

The author of the article is Bartłomiej Łatka, Expert in retail and logistics at Euvic IT.

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