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How can inventory and warehouse management be done effectively with an ERP system?

Zarządzanie zapasami i magazynem - jak zrobić to skutecznie przy pomocy systemu ERP
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Zarządzanie zapasami i magazynem - jak zrobić to skutecznie przy pomocy systemu ERP

What is inventory management?

Inventory management is the process of monitoring and controlling the amount of products and raw materials in stock. It involves planning, ordering, storing, quality control, and inventory distribution to confirm that the company has the right amount of products available at the right time and place. Effective inventory management helps avoid excess inventory, which generates storage costs and shortages, leading to lost sales and dissatisfied customers.

What are the methods of inventory control?

Several inventory control methods can be used depending on a company’s specific operations and needs:

  • ABC method: Classification of inventory into three groups (A, B, C) according to its value and importance to the company. Group A includes the most valuable products, which account for a small percentage of the total number of inventories but have the greatest impact on the value of inventory.
  • Just-in-Time (JIT) method: a system of ordering raw materials and products exactly when they are needed in the production process, which minimizes storage costs and reduces the risk of excess inventory.
  • Economic Order Quantity (EOQ) method: optimizing order quantities to minimize the costs associated with ordering and storing inventory. EOQ helps determine the most efficient order quantity.
  • FIFO (First In, First Out) method: an inventory management system in which the oldest products are sold or used first, which is especially important in industries with limited shelf life.
  • LIFO (Last In, First Out) method: an inventory management system in which the newest products are sold or used first. This method can be used in cases where older inventory has a longer shelf life.

Key objectives of inventory management

Inventory management aims to achieve several key objectives:

  • Increase product availability: Ensure that the right products are available at the right time and place to meet customer demand and avoid production downtime.
  • Minimizing warehousing costs: Optimizing inventory quantities to reduce the costs associated with storing, insuring, and handling products.
  • Improving operational efficiency: streamlining inventory ordering, storage, and distribution processes to increase operational efficiency and reduce lead times.
  • Risk management: minimize the risks associated with excess inventory, reduced product quality, and lost sales due to a lack of available products.
  • Working capital optimization: Effective inventory management helps free up capital frozen in inventory, enabling better use of funds for other business purposes.
Systemy zarządzania zapasami dla firm

Inventory management systems for businesses

Inventory management systems are software that helps companies monitor and control inventory in real time. Such systems can stand alone or be part of a more extensive ERP system. Critical functions of inventory management systems are:

  • Monitoring inventory levels: This feature tracks the number of products in stock in real time, allowing you to monitor your inventory.
  • Automatic ordering: This method generates automatic orders based on set minimum and maximum inventory levels, helping avoid shortages and overstocking.
  • Quality control: monitor inventory quality and identify defective or out-of-date products, which helps maintain product quality.
  • Data analysis: generate reports and analysis on inventory, which enables better decision-making and optimization of inventory management processes.
  • Integration with other systems: integrating with ERP, CRM, and other business applications, ensuring data consistency and facilitating business process management.

Inventory management with ERP - how to do it?

An ERP system integrates all business processes into a single platform for better inventory and warehouse management. Here’s how to manage inventory with ERP:

  • Central data management: an ERP system provides central management of inventory data, allowing easy access to information about inventory, orders, and deliveries.
  • Process automation: ERP automates many processes related to inventory management, such as order generation, quality control, inventory updating, and returns processing.
  • Demand forecasting: the ERP system uses advanced algorithms to forecast product demand, which helps plan orders and minimize the risk of shortages or excess inventory.
  • Warehousing optimization: ERP supports optimizing warehouse processes, such as product placement, warehouse space management, and inventory turnover control.
  • Performance monitoring: The ERP system allows you to monitor key performance indicators (KPIs) related to inventory management, allowing you to assess the effectiveness of your processes on an ongoing basis and make needed improvements.
  • Integration with suppliers and customers: ERP facilitates integration with supplier and customer systems to improve communication and collaboration in the supply chain.

Summary

Inventory and warehouse management are critical components of any company’s efficient operations. ERP systems for inventory management allow for data centralization, process automation, demand forecasting, storage optimization, and performance monitoring. This will enable companies to achieve higher levels of operational efficiency, minimize costs, and increase customer satisfaction. Choosing and implementing the right ERP system is an investment that brings tangible benefits in better inventory and warehouse management.

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articles Business knowledge

OEE ratio – what is it, and how do you calculate production efficiency?

Wskaźnik OEE - co to jest i jak obliczyć wydajność produkcji
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Wskaźnik OEE - co to jest i jak obliczyć wydajność produkcji

What is the OEE indicator?

The OEE (Overall Equipment Effectiveness) indicator is a key indicator used in production management to assess how efficiently machinery and equipment are used. OEE measures how well production resources are used to their full potential, eliminating losses due to unplanned downtime, low productivity, and quality defects. With the OEE indicator, companies can accurately monitor and optimize their production processes, increasing efficiency and competitiveness.

OEE indicator – formula

The calculation of the OEE indicator is based on three main components: availability, productivity, and quality. Each component is crucial in assessing a machine’s or production process’s efficiency. The formula for the OEE indicator is as follows:

OEE = Availability x Productivity x Quality

  • Availability - measures the percentage of production time a machine was available for work:

Availability =

Production time – Downtime

Production time

  • Productivity - measures how efficiently the machine is working about its maximum possible output:

Productivity =

Actual performance

Theoretical performance

  • Quality - measures the percentage of products that meet specific quality standards:

Quality=

Number of good products

Total number of products

How do you calculate production efficiency?

Calculating production efficiency using OEE is critical to understanding and improving production processes. To do so accurately, it is necessary to consider the various aspects that affect machine uptime, machine capacity, and the quality of the products produced.

Calculating production efficiency with an ERP system

ERP (Enterprise Resource Planning) systems are invaluable in managing production efficiency. By integrating data from different areas of a company’s operations, ERP systems enable accurate tracking and analysis of critical indicators, such as OEE. Using an ERP system to calculate production performance allows you to:

  • Automation of data collection - The ERP system automatically records data on machine uptime, downtime, the number of products produced, and quality, eliminating errors resulting from manual information entry.
  • Real-time analysis - The data collected by the ERP system is available in real-time, allowing the company to monitor production performance in real-time and respond quickly to problems.
  • Process optimization - The ERP system enables the identification of bottlenecks and areas for improvement, which allows the implementation of optimization measures and increases production efficiency.
Najczęstsze błędy przy obliczaniu wskaźnika OEE

The most common mistakes in calculating the OEE indicator

Despite its simplicity, the calculation of the OEE indicator can be subject to errors that lead to an incorrect assessment of production efficiency. The most common mistakes include:

  • Incomplete data - The need for complete and accurate data on machine hours, downtime, the quantity of products produced, and quality defects can lead to incorrect OEE calculations.
  • Improper definitions - unclear or inconsistent definitions of the various components of the OEE indicator (availability, productivity, quality) can lead to misleading interpretations of the results.
  • Neglecting the impact of changes - Failing to consider the effects of changes in production processes, such as technological modifications, changes in work organization, or differences in operator skills, can falsify the results of OEE indicator calculations.

How can we improve the OEE rate in the production process?

Improving OEE is crucial for any company seeking to increase production efficiency. Here are some practical steps you can take to enhance OEE:

  • Regular inspection and maintenance of machines - Regular inspection and maintenance of machines minimize the risk of unplanned downtime and increase availability.
  • Operator training - investing in training for machine operators increases their skills and efficiency, which translates into higher productivity and production quality.
  • Process optimization - Analyzing and optimizing production processes allows for identifying and eliminating bottlenecks, increasing productivity.
  • Data monitoring and analysis - continuous monitoring and analysis of OEE data allows you to identify areas for improvement on an ongoing basis and implement appropriate corrective actions.
  • Implementation of Lean Manufacturing tools - Lean Manufacturing tools and methods, such as 5S, Kaizen, or TPM (Total Productive Maintenance), support continuous improvement of production processes and the OEE indicator.

In summary, the OEE indicator is a critical tool in manufacturing performance management, allowing an accurate resource efficiency assessment. Calculating the OEE indicator with ERP systems enables automation and accuracy, and implementing optimization measures allows continuous improvement of production processes. Improving the OEE indicator translates into higher efficiency, quality, and competitiveness of the company in the market.

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articles Business Central Recommended

Want to reduce paperwork to a minimum? Choose Continia Document Capture with OCR technology.

INLOGICA Continia Document Capture
Spis treści
INLOGICA Continia Document Capture

Reduce the number of documents by using Continia Document Capture

Document Capture is an innovative business solution based on OCR (Optical Character Recognition) technology designed to optimize business processes.

By integrating Continia Document Capture with Microsoft Dynamics 365 Business Central, you can instantly scan invoices as soon as they are received. The scanned documents are automatically uploaded to Microsoft Dynamics 365 Business Central, meaning all items on the invoice are imported, stored, and assigned to the corresponding purchase order in the ERP system. If the invoice needs approval, the responsible person receives an email notification. The invoice can be approved in the Microsoft Dynamics 365 Business Central application and via a web browser. In addition, the approval process is recorded in detail, allowing purchasing managers to track the entire document approval process.

Document scanning and processing

Thanks to OCR technology, Document Capture enables the rapid scanning of all documents and their immediate distribution within the organization. The process begins when the documents are received. Once scanned and recorded, the documents are automatically sent to the ERP system – Microsoft Dynamics 365 Business Central. Document scanning can be performed using multifunctional devices and dedicated scanners.

PDF processing

Purchase invoices and orders are most often received in PDF format. With Document Capture, such files can be directly uploaded to Dynamics 365 Business Central from specific file server folders or directly from email. Moreover, the application can simultaneously import and process encrypted PDF files, eliminating the need to print and manually scan them.

Technologia ocr w Continia Document Capture

OCR technology in Continia Document Capture

Document Capture uses one of the most recognized OCR technologies on the market, ABBY FineReader, to accurately recognize text in documents. This advanced technology effectively identifies barcodes, characters, and letters in as many as 180 languages.

Support for different types of documents

Document Capture is designed to work with a variety of document formats. Users can define custom templates for processing such documents as purchase orders, contracts, certificates, diplomas, or agreements. Creating rules that specify what data will be processed during document capture is also possible.

Document analysis and processing

Document Capture’s advanced document processing mechanism analyzes scanned files, extracts relevant information, and sends them to the appropriate templates. Documents are automatically assigned to the correct templates based on their source. These templates can be further optimized by applying validation rules and other requirements, ensuring the data complies with the standards and best practices in the ERP system, Microsoft Dynamics 365 Business Central.

Zatwierdzanie faktur zakupu

Approval of purchase invoices

The relevant person receives an automatic email notification if a purchase invoice requires approval. The document can only be approved and processed once all responsible persons approve. During approval, these individuals can view the original document on their devices, add notes, and attach additional files. Document Capture also allows you to track the entire approval history, providing tools to help manage the process.

Purchase orders can be integrated with scanned invoices, automating approval, provided value differences are within set limits.

Backup and archiving

All scanned documents are stored in PDF/A format and can be accessed directly from Microsoft Dynamics 365 Business Central. Documents are easy to locate with account or dimension numbering. It is also possible to use full-text search based on the content of the papers. This feature lets you quickly search the registered template fields and the full text of documents to find relevant information about suppliers or contracts. All original documents are securely stored in the Data Capture archive.

Dla kogo przeznaczona jest technologia Document Capture i OCR

Want to simplify your administrative processes? Choose Document Capture with OCR technology and reduce paperwork to a minimum!

What is Document Capture and OCR technology for?

Document Capture technology, based on advanced OCR solutions, is becoming increasingly popular among companies in various sectors. It is an excellent tool for organizations of any size and industry.

OCR technology is designed to reduce paper documents and streamline company administrative processes.

Redukcja papierowych dokumentów - system ERP

Range of features:

  • the ability to scan documents remotely and locally, directly into Dynamics 365 Business Central,
  • automatically download and register PDF files without the need to install additional software,
  • built-in ABBYY FineReader OCR technology recognizes text in 180 languages and dialects,
  • processing of encrypted PDF files possible without unlocking them,
  • automatic recognition of vendors registered in the ERP system - Dynamics 365 Business Central,
  • improved financial management, including control of VAT amounts and payment terms,
  • automatic assignment of approvers based on supplier, dimensions, and invoice amount,
  • possibility of temporary registration of invoices with full automation of the process,
  • automatic linking of purchase orders to invoices, with an automatic approval option,
  • accountants and approvers can adjust dimensions, and G/L accounts directly on the lines,
  • documents are indexed by the date of the original document,
  • full-text search in documents directly in Dynamics 365 Business Central,
  • support for multiple document types.
Korzyści płynące z Continia OCR

Benefits:

  • Accelerated and more efficient execution of administrative processes,
  • instant access to digital versions of documents,
  • optimized workflow,
  • improved communication and collaboration within the team,
  • reduced costs associated with backup archiving.

If you would like to learn more about our offer, please get in touch with us. We will be happy to provide you with detailed information

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articles Business knowledge

Split payment – what is it, and what is the split payment mechanism?

Split payment - co to jest i na czym polega mechanizm podzielonej płatności
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Split payment - co to jest i na czym polega mechanizm podzielonej płatności

What is the split payment?

Split payment, or split payment mechanism, is a VAT settlement system introduced in Poland to reduce fraud and tax evasion. It involves splitting payments for goods and services into the net and VAT amounts. Thanks to this solution, VAT goes directly to a particular VAT account held by a bank, making tax fraud more difficult. Split payment was introduced in Poland in July 2018 and has since been applied to many transactions.

How does split payment work?

The split payment mechanism works as follows: when the buyer pays for an invoice, the net amount goes to the seller’s current account, while the VAT amount is transferred to a particular VAT account. This account is maintained by a bank or SKOK and is used exclusively for VAT-related settlements. In this way, VAT is kept separate from the company’s current funds, which reduces the risk of its misuse.

An example of how split payment works:

1. the buyer receives an invoice for PLN 10,000 net + PLN 2,300 VAT.

2. When making the payment, the buyer transfers PLN 10,000 to the seller’s current account and PLN 2,300 to the seller’s VAT account.

3. the bank automatically divides the payment, transferring the VAT amount to the corresponding account.

Split payment mechanism - what goods does it cover?

The split payment mechanism covers certain goods and services vulnerable to tax fraud. The list of these goods and services is included in Appendix 15 of the VAT Law and includes, among others:

  • Electronics (televisions, computers, cell phones),
  • Steel and metal products,
  • Coal and coke,
  • Waste and secondary raw materials,
  • Certain construction services.

Businesses that trade in these goods or provide these services must use the split payment mechanism.

Split Payment kiedy jest obowiązkowy

Split payment - when is it mandatory?

Split payment is mandatory in certain situations, according to the VAT Law. It mainly applies to transactions that meet the following criteria:

  • The gross value of the invoice exceeds PLN 15,000,
  • The transaction involves goods or services from Appendix 15 of the VAT Act.

The seller must include the annotation “split payment mechanism” on the invoice in such cases. Failure to make such an annotation may result in the imposition of sanctions by the tax authority.

Split payment mechanism - how do you make a transfer?

Making a transfer under the split payment mechanism is simple but requires accuracy and attention. To make a payment, follow the steps below:

1. Select the split payment option in electronic banking: In the electronic banking system, select the option of split payment transfer or transfer to a VAT account.

2. Enter the transfer data: In the transfer form, enter the net amount, the VAT amount, the invoice number, and the vendor’s tax ID number.

3. Checking the data: Before approving the transfer, carefully checking all entered data is a good idea to avoid errors.

4. Approval of transfer: Approve the transfer after entering and checking the data. The bank will automatically split the payment, transferring the VAT amount to the seller’s VAT account.

The split payment mechanism significantly improves transaction transparency and reduces the risk of tax fraud. Sellers and buyers are equally obligated to use split payment, so both parties must know their responsibilities.

 

Summary

Split payment is an effective tool in the fight against tax fraud, which involves splitting the payment for goods and services into a net amount and VAT. This mechanism is mandatory for certain transactions involving goods and services listed in Appendix 15 of the VAT Act and exceeding a gross value of PLN 15,000. Entrepreneurs must remember to mark invoices and correctly execute split payment transfers properly. By doing so, they can avoid sanctions and ensure the transparency of their business operations.

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articles Business knowledge

Technical manufacturing cost (TMC) – what is it, and how can it be calculated?

Techniczny koszt wytworzenia (TKW) - co to jest i jak go obliczyć
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Techniczny koszt wytworzenia (TKW) - co to jest i jak go obliczyć

Technical manufacturing cost (TMC) is an essential financial indicator for manufacturing companies to determine product production costs. In this article, we will explain what technical manufacturing cost is, what elements make it up, how to calculate it, and how to use ERP systems to calculate manufacturing costs accurately.

What is TMC's technical manufacturing cost?

Technical manufacturing cost (TMC) is the sum of a company’s costs in producing a specific product. It includes the cost of materials, labor, and other direct and indirect costs associated with the production process. The technical cost of production is necessary for setting sales prices, budget planning, and assessing the profitability of production.

Technical manufacturing cost - what does it consist of?

Technical manufacturing costs consist of several essential elements that must be considered to determine production costs accurately. These are:

  • Direct material costs - include all raw materials and materials directly used in producing a product. Examples include steel for machinery, wood for furniture, or ingredients for food production.
  • Direct labor costs - refer to the wages of workers directly involved in the production process, such as machine operators, assemblers, or production line workers.
  • Indirect production costs - include costs that cannot be directly attributed to a specific product but are necessary for its production. Examples include machine maintenance, electricity, equipment depreciation, and production management costs.
  • Auxiliary costs - may include other expenses necessary for the production process, such as internal transportation, warehousing, or quality control.
Jak obliczyć techniczny koszt wytworzenia - wzór

How to calculate the technical cost of production – formula

The calculation of technical manufacturing cost requires including all the above components. The formula for calculating the technical manufacturing cost is as follows:

TMC = Costs of direct materials + Costs of direct labor + Indirect production costs + Additional costs.

Example of calculation:

If a company incurs the following costs:

  • Direct material costs: PLN 100,000
  • Direct labor costs: PLN 50,000
  • Indirect production costs: PLN 30,000
  • Additional costs: PLN 20,000

Then, the technical cost of production (TMC) is:

TMC = PLN 100,000 + PLN 50,000 + PLN 30,000 + PLN 20,000 = PLN 200,000.

TMC - How do we calculate production costs with the help of an ERP system?

ERP (Enterprise Resource Planning) systems are indispensable for managing production costs. They integrate all aspects of a company’s operations, enabling accurate and efficient monitoring and calculation of production costs. Here’s how an ERP system can help calculate the technical cost of manufacturing:

  • Automation of data collection - The ERP system automatically collects data on material consumption, labor time, and other production-related costs. This eliminates the need for manual data entry and reduces the risk of errors.
  • Accurate cost allocation - ERP allows you to allocate costs to individual products, allowing you to more accurately determine what costs are associated with the production of a particular item.
  • Real-time monitoring - ERP systems allow real-time monitoring of production costs. The company can control expenses in real-time and make the necessary adjustments to optimize production.
  • Reporting and analysis - The ERP system generates detailed reports and studies on production costs. This allows users to identify areas where costs can be reduced and make more informed business decisions.
  • Integration with other modules - The ERP system integrates with different modules, such as warehouse management, sales, and accounting. This ensures all data is available in one place, making management and business planning easier.

In summary, the technical cost of production (TMC) is a crucial indicator for manufacturing companies. It includes the cost of materials, labor, and other costs associated with the production process. Calculating TMC is essential for product pricing, budget planning, and assessing production profitability. ERP systems significantly facilitate production costing by providing accuracy, automation, and real-time monitoring of costs. They enable companies to manage their resources more efficiently and increase business profitability.

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articles Business knowledge

Whitelist of VAT taxpayers – what is it, and how can we get on it?

Biała lista podatników VAT - co to jest i jak się na niej znaleźć?
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Biała lista podatników VAT - co to jest i jak się na niej znaleźć?

The whitelist of VAT taxpayers was introduced in Poland to increase transparency and security of business transactions. Below are details on the whitelist, such as how to report an account to it, check if you are on it, and why you should be on it.

VAT whitelist - what is it?

The VAT whitelist is an official register maintained by the National Tax Administration that contains information about VAT taxpayers. It includes data on companies registered as active VAT taxpayers and those that have been removed from the register or re-registered. The list was introduced on September 1, 2019, as part of the Law on Amendments to the VAT Law and Certain Other Laws. Its primary purpose is to enable businesses to check the reliability of their contractors and reduce the risk of tax fraud.

How to report an account to the whitelist of VAT taxpayers?

To report an account to the whitelist of VAT taxpayers, you must first ensure that the business account you want to report is a checking account held at a bank or SKOK. Then follow a few simple steps:

  • Register the business - Every entrepreneur must register as an active VAT taxpayer. To do this, submit a VAT-R registration application to the tax office.
  • Report the bank account - The company's bank account should be reported to the tax office. This can be done by submitting an NIP-8 form (for sole proprietors) or an NIP-2 form (for other entities). These forms are available on tax offices' websites and on the e-Declarations service.
  • Update data in CEIDG or KRS - If the bank account changes, the entrepreneur must update his data in the Central Register and Information on Economic Activity (CEIDG) or the National Court Register (KRS).

The data will be automatically transferred to the VAT whitelist once the bank account is declared and the business is registered.

VAT whitelist - how do I check if I am on it?

Checking whether you are on the VAT whitelist is very simple. This can be done in several ways:

  • Tax portal - The National Tax Administration's official website has a dedicated tax portal where you can check the status of your account. To access it, you need to enter your company's VAT ID or REGON number.
  • Banking services - Many banks offer their customers the ability to check whether their accounts are on the whitelist of VAT taxpayers. It is a good idea to contact your bank and ask about such a service.
  • Accounting programs - Some accounting software and ERP systems have a function to verify accounts on the VAT whitelist. This allows businesses to monitor their accounts' status in real time.

Why is it a good idea to be on the whitelist of VAT payers?

Being on the VAT whitelist has several benefits that can significantly affect a company’s operations. Here are some of them:

  • Credibility in the eyes of contractors - Businesses on the whitelist are seen as reliable and trustworthy business partners. Contractors are assured that the company is registered as an active VAT payer and meets all formal requirements.
  • Security of transactions - Conducting transactions with companies on the whitelist reduces the risk of tax fraud and abuse. As a result, unpleasant legal and financial consequences can be avoided.
  • Settlement facilitation - Businesses on the whitelist can benefit from simplified settlement procedures. For example, they may be exempt from sending additional documents or VAT statements.
  • Protection from sanctions - Transactions conducted with companies outside the whitelist may involve the risk of sanctions by the tax authority. Therefore, it is worth ensuring that we and our contractors are on the VAT whitelist.

In conclusion, the VAT whitelist is an essential tool that helps entrepreneurs run safe and transparent businesses. It minimizes the risk of tax fraud and ensures your credibility in the eyes of your contractors. If you still need to submit your account to the whitelist, it is worth doing so as soon as possible to enjoy all the benefits of being on the list.

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articles Business knowledge

ERP versus WMS – differences and comparison

ERP, a WMS - różnice i porównanie
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ERP, a WMS - różnice i porównanie

WMS in logistics

WMS system – what is it?

A WMS (Warehouse Management System) is advanced software for warehouse operations. It supports processes such as goods receipt, storage, order picking, and shipping. What does a WMS logistics system mean? The system is a crucial component of warehouse management that allows you to optimize warehouse space, increase operational efficiency, and improve inventory accuracy.

Critical functions of the WMS system

  • Good receipt and storage: the WMS enables efficient management of goods receipts, automatically assigning warehouse locations to optimize space.
  • Order picking: the WMS supports the order picking process by guiding warehouse employees to the appropriate locations, increasing the speed and accuracy of order fulfillment.
  • Inventory: the WMS enables real-time inventory taking, reducing errors and allowing rapid response to inventory changes.
  • Shipping: the WMS supports the management of the shipping process, automatically generating shipping documents and managing the loading schedule.

ERP system - what is it?

An ERP (Enterprise Resource Planning) system is integrated software that supports the management of all resources and business processes in a company. ERP integrates different areas of a company’s operations, such as finance, production, sales, purchasing, human resources, and logistics, into one cohesive platform. The goal of an ERP system is to centralize data and processes, leading to better coordination, operational efficiency, and informed business decisions.

Critical functions of the ERP system

  • Finance and accounting: the ERP system manages the company's finances, including accounting, budgeting, management accounting, and cash flow.
  • Manufacturing: the ERP supports production planning, inventory management, scheduling of production tasks, and monitoring of production performance.
  • Human Resources: ERP integrates human resource management functions such as recruitment, training, compensation management, and employee evaluation.
  • Sales and purchasing: ERP facilitates customer relationship management, order processing, inventory management, and purchasing planning.
System ERP, a WMS - różnice

ERP vs. WMS - the differences

ERP vs. WMS – differences in functionality

An ERP system is a comprehensive tool for managing a company’s resources and business processes. It covers various functions, from finance to human resources and sales. ERP centralizes data from different departments, eliminating information redundancy and reducing the risk of errors.

A WMS, on the other hand, is a specialized tool focused on warehouse operations. It optimizes processes related to receiving, storage, order picking, and shipping goods. The main goal of a WMS is to increase the warehouse’s operational efficiency and improve inventory accuracy.

ERP vs. WMS – differences in data integration

An ERP system integrates data from different company departments, allowing for better coordination and more informed business decisions. The centralization of data in ERP eliminates the need for manual information entry and reduces the risk of errors.

A WMS focuses on detailed data about warehouse operations. A WMS may need to be integrated with an ERP system to ensure a smooth flow of information between different company departments.

ERP vs. WMS – differences in process automation

An ERP system automates various business processes, including managing finance, production, human resources, sales, and purchasing.

A WMS automates warehouse processes such as goods receiving, storage, order picking, and shipping. It uses technologies such as barcode scanners and RFID systems to improve the accuracy and efficiency of warehouse operations.

ERP versus WMS - which system should you choose?

The choice between ERP and WMS depends on a company’s specific needs.

  • Scope of business: An ERP system will be more suitable if a company needs comprehensive management of all resources and business processes. A WMS will be a better choice if the main goal is to optimize warehouse operations.
  • Size of the enterprise: Large enterprises composed of many departments may benefit more from an ERP system that integrates all business aspects. Smaller companies, focused mainly on logistics and warehousing, may prefer a WMS.
  • Budget and resources: ERP systems are typically more expensive and complex to implement than WMS systems. Companies need to assess their financial capabilities and the resources needed to implement and maintain them.
  • Integration with existing systems: if a company already uses other management systems, it is worth considering which system (ERP or WMS) will integrate better with existing tools.
  • Specific logistics needs: companies with extensive warehouse operations that require advanced warehouse management may need a specialized WMS. Conversely, companies needing extensive integration of all business functions may choose ERP.

Summary

ERP and WMS systems play different but complementary roles in business management. An ERP system offers a broad spectrum of functions and integrates all aspects of a company’s business, while a WMS focuses on optimizing warehouse operations. The choice between the two systems depends on the specific needs, scope of operations, company size, budget, and particular logistics requirements. Understanding the differences and functions of the two systems is crucial in making an informed decision that will bring the most significant benefit to the company. In many cases, integrating the two systems may be the best solution, allowing you to realize the full potential of advanced warehouse management and comprehensive management of your company’s resources.

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articles Business knowledge

Why information systems are critical in logistics

Dlaczego systemy logistyczne są kluczowe w ligistyce
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Dlaczego systemy logistyczne są kluczowe w ligistyce

Information systems in logistics play a crucial role in managing processes, increasing efficiency, and optimizing resources. In the era of digitization and globalization, logistics faces growing demands for speed, precision, and complexity of operations. Logistics systems enable better coordination, cost reduction, and improved customer service.

They make it possible to monitor the flow of goods in real-time, manage inventory, and plan transport routes, significantly affecting companies’ competitiveness in the market.

Information systems in logistics

Logistics information systems are a wide range of tools and programs that support various aspects of supply chain management. One of the most critical systems is an ERP (Enterprise Resource Planning) system, which integrates all business processes into a consistent platform. An ERP system in logistics enables resource management, production planning, warehouse management, and order processing. Other IT programs, such as WMS (Warehouse Management System), TMS (Transport Management System), or SCM (Supply Chain Management) systems, also play an essential role in streamlining logistics operations.

Information technologies in logistics

Logistics information technologies include a wide range of solutions that contribute to the automation and digitization of processes. Among the most important technologies are the Internet of Things (IoT), artificial intelligence (AI), big data and blockchain. IoT allows for real-time monitoring of the status of goods and vehicles, which increases transparency and efficiency in the supply chain. AI and big data enable the analysis of large data sets to predict demand, optimize routes, and manage inventory. Conversely, blockchain provides security and transparency in transactions, which is particularly important in international logistics operations.

Technologie informatyczne w logistyce

ERP system and other logistics tools

The ERP system in logistics is one of the most essential tools supporting business process management. It integrates various enterprise functions such as planning, production, sales, finance, and human resource management. As a result, companies can plan and execute their logistics operations more efficiently. Other logistics tools, such as WMS, TMS, and SCM systems, are also necessary. WMS systems allow warehouse management, storage space optimization, and inventory control. TMS systems support transportation management, route planning, and shipment monitoring. On the other hand, SCM systems integrate all processes in the supply chain, from procurement to distribution.

Summary of the role of information systems and IT in modern logistics

Logistics information systems and IT technologies are crucial in modern logistics operations. They allow automation and digitization of processes, contributing to increased efficiency, cost reduction, and improved customer service. With ERP, WMS, TMS, and SCM systems, companies can effectively manage resources, plan production, optimize warehousing, and monitor transportation. Technologies such as IoT, AI, big data, and blockchain further support these processes by providing transparency, security, and the ability to analyze large data sets. As a result, companies implementing modern IT systems and technologies gain a competitive advantage in the market, responding faster and more effectively to changing market conditions and customer expectations.

By using advanced logistics systems, risks can be better managed, potential problems identified, and business decisions made more informed. Warehouse IT systems, such as WMS, allow for optimizing warehouse space and increasing operational efficiency, which has a direct impact on the cost of storing and handling goods.

IT and logistics programs also play a crucial role in inventory management. They make it possible to track inventory levels in real time, allowing a quick response to changes in demand and avoiding over or under-stocking.

In summary, IT systems and technologies are an integral part of modern logistics, helping to increase efficiency, reduce costs, and improve customer service. Companies that invest in modern IT solutions gain a significant competitive advantage by better managing their processes, resources, and customer relationships. As a result, they can respond more quickly and effectively to changing market conditions, which is crucial to their long-term success and growth.

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articles Business knowledge

Pareto method – what is it, and how does it work?

Czym jest metoda 80/20
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Czym jest metoda 80/20

The Pareto method, also known as the 80/20 rule, was developed by Italian economist Vilfredo Pareto in the late 19th century. Pareto observed that 80% of the wealth in Italy was held by 20% of the population. Over time, his observation became a universal law applied to various areas of life and business. The Pareto principle is based on the belief that, in many cases, 80% of the results come from 20% of the causes. It is an analytical tool that helps focus on critical aspects of business and identify areas for improvement.

Pareto's law - the 80/20 rule

Pareto’s Law, also known as the 80/20 rule, states that 80% of outcomes come from 20% of causes. This empirical principle applies in various contexts, from business management to personal life. For example, in a business context, 80% of revenue can come from 20% of customers, and 80% of problems can result from 20% of causes. The Pareto 80/20 principle is not a hard rule but rather a general trend that helps identify critical areas to focus on.

Pareto principle in practice

In practice, the Pareto principle is widely used in many areas. For example, 20% of products can account for 80% of sales in inventory management. In project management, 20% of tasks can produce 80% of results. In sales, 20% of customers can generate 80% of revenue. The Pareto principle allows companies to focus on those key areas that bring the most benefit, leading to greater efficiency and effectiveness.

Using the Pareto principle in time management

The Pareto principle is instrumental in time management. You can significantly improve your productivity by focusing on the 20% of activities that produce 80% of the results. For example, if 20% of the tasks on the list are do’s and don’ts responsible for 80% of the goals achieved, focusing on these critical tasks allows you to use your time better. As a result, managers and employees can plan and execute their responsibilities more efficiently, leading to increased productivity and better results.

Performance analysis according to Pareto laws

According to the Pareto principle, performance analysis involves identifying the key factors that have the most significant impact on performance. This can include sales analysis, where the products that generate the most revenue are identified, or operational analysis, where the processes that create the most problems are identified. Using the Pareto principle allows you to focus on the most critical aspects of your business and optimize your processes. Examples include identifying key customers that generate the most revenue or processes that cause the most delays and costs.

Zastosowanie zasady pereto w biznesie

Application of the Pareto principle in business - case study

An example of applying the Pareto principle in business might be a clothing manufacturing company. After conducting a sales analysis, the company may discover that 80% of its revenue comes from 20% of its products. By promoting and developing these essential products, the company can increase its revenue and improve profitability. Similarly, a customer analysis may reveal that 20% of customers generate 80% of sales. In this case, the company can focus its marketing efforts on these key customers to increase loyalty and sales value. Examples from other companies show that applying the Pareto principle allows for better use of resources and better business results.

How do you incorporate the Pareto principle into your daily operations?

Introducing the Pareto principle into daily operations requires several steps. First, identify the critical areas of the business that produce the most outstanding results. Next, it’s worth conducting a data analysis to identify those 20% of factors that generate 80% of the effects. Once you have identified the key factors, focus your resources and activities on these areas to maximize efficiency. Regular monitoring and analysis of results will allow you to improve and optimize your operations continuously. For example, in time management, it makes sense to focus on those tasks that bring the most benefit and eliminate those that don’t produce significant results.

Summary: Benefits of using the Pareto method

Using the Pareto method has many benefits in business and everyday life. It allows you to manage resources better, focus on the most critical aspects of your business, and increase efficiency and productivity. Companies can make more informed decisions and optimize their processes by identifying key performance drivers. The 80/20 rule is a

powerful tool that can significantly contribute to an organization’s success and growth. Examples of companies that have successfully implemented the Pareto principle show that focusing on key business areas leads to better financial and operational performance.

The Pareto 80/20 principle is also beneficial in one’s personal life. For example, in time management, focusing on the 20% of activities that produce 80% of the results allows for better use of time and better results. Identifying the vital interpersonal relationships that bring the most satisfaction and benefits will enable you to build stronger and more valuable relationships.

Incorporating the Pareto principle into daily operations requires a change in thinking and approach to resource management. Instead of trying to do everything, focusing on the key areas that bring the most benefit makes sense. Doing so can increase efficiency, improve performance, and achieve better results in less time.

The 80/20 rule, also known as the 20/80 rule, is a simple but potent tool that can significantly contribute to success in business and personal life. It allows you to manage your resources better, focus on the most critical aspects of your business, and achieve better results. Examples of companies that have successfully implemented the Pareto principle show that focusing on vital business areas leads to better financial and operational results.

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articles Business knowledge

What is an export invoice?

Co to jest faktura eksportowa
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Co to jest faktura eksportowa

An export invoice is a commercial document issued by a seller when selling goods or services outside the country. It is the basic export document that confirms the international transaction and specifies the terms of sale, including prices, quantities, and product specifications. The export invoice is necessary for customs clearance and tax settlement in both the exporter’s and importer’s countries. A properly issued export invoice avoids problems with customs authorities and ensures tax compliance.

The difference between an export invoice and a European invoice

An export invoice is different from a European invoice, which is used for trade within the European Union. The European invoice, also known as an intra-community invoice, is used for transactions between EU member countries. The main differences between the two types of invoices are:

  • Taxes and duties: an export invoice usually does not include VAT, because the exported goods are exempt from this tax. In the case of European invoices, VAT is settled according to the regulations of the buyer's country.
  • Customs clearance: an export invoice is required for customs clearance, which differs from European invoices.
  • Information on the invoice: The export invoice must contain more detailed information, such as the EORI (Economic Operators Registration and Identification) number, the tariff code, and the terms of delivery according to Incoterms.

How to issue an export invoice

Issuing an export invoice requires diligence and compliance. Here are the steps to take:

  • Gather the necessary information: make sure you have all the details of the transaction, including full details of the buyer, description of the goods, quantity, unit price, total order value, terms of delivery (Incoterms), and country of origin of the goods.
  • Apply the appropriate tax rates: for exports, goods are usually exempt from VAT, but this should be clearly stated on the invoice.
  • Add the necessary codes and numbers: Enter the EORI number, customs tariff code, and other numbers required by customs law.
  • Complete the invoice in English: since the export invoice will be used abroad, it is a good idea to draft it in English to avoid misunderstandings.
  • Check compliance with the regulations of the importer's country: make sure the invoice meets the legal requirements of the country to which you are exporting goods.
Jak wystawić fakturę eksportową

Exporting goods and VAT

When exporting goods outside the European Union, these transactions are exempt from VAT. To take advantage of this exemption, it is necessary to meet certain conditions and have the appropriate documents to confirm the export of goods. The most important documents include:

  • Export invoice: it must be appropriately filled out and contain information about VAT exemption.
  • Transport documents, such as a bill of lading or proof of parcel shipment, confirm that the goods have left the country.
  • Export declaration SAD (Single Administrative Document): This is a customs document necessary for customs clearance of goods exported outside the EU.

Summary

An export invoice is a crucial document in international trade that differs from a European invoice in terms of taxes, customs clearance, and required information. Issuing such an invoice requires diligence and compliance with the laws of both the exporter’s and importer’s countries. Goods exported are exempt from VAT, which requires the appropriate documents to confirm the export. With a properly drafted export invoice, businesses can avoid problems with customs and tax authorities, which is crucial for smooth international transactions.

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