In August 2008 I joined the Ingersoll-Rand CZ Ltd in Unicov as a customs coordinator. This company is part of an American concern Ingersoll-Rand, which acts on world markets, in the air conditioning and refrigeration sector.

Ingersoll-Rand factory in Unicov was built in less than seven months from the scratch. The actual production started in August 2002. The Unicov facility is the youngest IR factory in the Czech Republic with IR technical institute in Prague and factory in Kolin.

It is specialized in assembling and testing of screw and piston compressors for cooling circuits. More than 98 % of the production is exported to foreign markets. Thanks to advantageous geographical position, the factory is also a European distribution center.

The company is successfully certified according to ISO 9001:2000, ISO 14001:1997 and OHSAS 18001:1999. The plant wants to become "centers of excellence for manufacturing and testing of electromechanical equipment and systems.

Shortly after my joining of the company, it was clear that the company can not work as before the economic crisis.

The company management approached a number of measures to keep the company afloat. Reduced the number of employees to production volume. Today, the company employs 170 staff mainly technical ones. Furthermore, it runs several projects that aim to reduce the costs of the company, without compromising the quality of manufactured products,
while the customer is being satisfied with the on time delivery. One of these projects was the innovation of the customs warehouse.

As the customs coordinator I have started to be interested in this issue and I have suggested that the development of my thesis I will bring this warehouse into service. The aim of this work is to achieve through the innovation of the warehouse increase the cash flow in Ingersoll-Rand CZ Ltd. Develop documentation for the application for a license to operate a customs warehouse. Proposing a way of registration of goods in the warehouse. Analyze financial savings. Resolve billing for the consumed goods from the warehouse. Propose
a resolution of reclamations in accordance with customs regulations.

With a team of collaborators led by the financial manager will meet 2-3 time per month in meetings in which we will be entering the individual subtasks. A part of my thesis will obtain all the information about the warehouse productions of applicable laws. The next part of my job will be to cooperate with the customs office in Olomouc, where I will request a permit to implement a customs warehouse. Before submitting an application we must have already prepared the project in theory. The office must submit proposals on the location of the warehouse, stock records, ensuring of customs debt, etc.

At the moment when such permission is obtained we must train the personnel involved in those problems which are related with the customs warehouse and put into practice. In 2009 we will test the warehouse on electric motors, which are imported from the Chinese company Hebei. At the end of the year I will do the analysis of the savings and the outlook for next year.

The effort of each employee of our company is to satisfied customer needs and not deliver any defective machine to the final customer.

1 Evalution of the current state of stockpile management in the company

Strategic purchasing department searches for suppliers of quality components for the manufactured compressors, not only in the EU, but also in the 3rd countries. This includes the following countries: China, Malaysia, India and USA. The price of parts purchased from these countries is much lower than the same quality parts purchased in the European Union. On the other hand, causes the problem of higher prices for transport and long delivery times.

The company manufactures compressors in various configurations, which implies to have on stock any parts for their production potential. So far the company buys these parts, so that from each species were enough in stock, especially from suppliers from third countries where the delivery times are several weeks. At a higher price for the transport service is of course worth to buy larger quantities of these components, thus reducing transport costs of each component. In stock is enough parts that are awaiting customer who orders the compressor in the future with these parts.

Few types of compressors are build for safety stock to increase the on time delivery of machines to final customer.

Currently, it is no longer possible to continue the production of compressors and purchase the stock because the company due to high inventories became insolvent.

One of the first steps to improve this situation is to establish a consignment stock in the company.

1.1 Consignment stock

This store service established for the supplier of electric motors from the company in China. It is established under the Treaty on the premises of Ingersoll-Rand CZ Ltd. Unicov facility receive one or two containers with motors twice a month from the Hebei company and stores them in the consignment stock. Goods supplied by Hebei, is stored on the supplier's account and risk. Ingersoll-Rand has the right to consume the goods according to their needs, and pay the consumed goods in time interval according to contract. Contract for such removal within a time interval to pay. In a significant decrease in stocks of motors has always highlighted the need for suppliers to complete range of stock.

At first it seemed that this company is very convenient store and wanted to sign a contract with other suppliers of 3 countries. Problems arose when, thanks to the economic crisis and sharp decline in orders for compressors slowed and output of these motors from stock.

Motors include a high proportion of steel, cast iron and copper. In the past two years, prices of raw materials on the market increased significantly. Consequently, the contractor asked us to pay a higher price for the motors.

There were extensive repairs Uniform administrative documents, under which the Chinese motors are released into free circulation. Given that other suppliers from the
3rd countries, anticipating the movement of prices for their products we had to drop from this method of buying stocks.

2 Modern methods of stock

Ingersoll-Rand CZ Ltd. is currently focused on recovery and subsequent application of modern methods of stock. Among the new systems for material procurement and VMI are SOMI. These methods are adopted from foreign subsidiaries, which are already commonly used. The warehouse project counts with applications of these systems within the company.

2.1 VMI (Vendor Managed Inventory)

An essential element of this system is a common database of customers and suppliers. This database is made up of individual parts, which are set in minimum and maximum level of stock. Based on this limit is the contractor under the contract to supply the individual parts to the warehouse sales. At the moment when the customer removes the parts from the warehouse, and supply drops to the minimum, it automatically generates a purchase order for the supplier.

The company began negotiations with core suppliers, with which was subsequently signed the contract. Under this contract, the supplier delivers to a predetermined location in the store customer specific components. These parts are stored on the account and risk of the supplier until they are transferred from this location to the production line.

2.2 SOMI (Supplier Owned and Managed Inventory)

Another project is SOMI system. Underlying this system is the consignment stock. In the premises of Ingersoll-Rand is a designated area in which they are stored a larger number of components, which again remain, until the consumption, property of suppliers. The moment when these parts are shipped automatically generates self billing invoice. This invoice is paid to supplier.

As already mentioned in the previous chapter devoted to consignment stock, occurred in the company Ingersoll-Rand has problem in the supply of motors from China. Due to some price volatility of raw materials was not possible to tell Customs Office in Olomouc, what will be the actual final price of the purchased motor. Due to the excessive number of repairable Uniform administrative documents was necessary to address this situation. This was the first impulse for innovation warehouse type C in the company.

2.3 The customs warehouse

Customs warehouse in the company can be set up under Article 98 of the Customs
Code / citation

Mode of entry for the customs warehousing procedure shall allow the storage in
a warehouse.

· of goods, non-Community goods, without such goods subject to import duties or commercial policy measures.

· of Community goods, for which specific Community rules that apply to them due to the customs warehousing arrangements relate generally applicable to the export of goods.

Customs warehouse means any premises approved by the authorities and under their supervision in which the goods are stored under prescribed conditions.

Cases in which the goods may be referred to in paragraph 1 released under the customs warehousing procedure without being stored in the warehouse, the procedure of the committee [22, p. 43].

3 Implementation of the customs warehouse in the company

In autumn 2008, a first Meeting, where we set out common goals. We agreed that we will work together as a team, as they target was not only the bonded warehouse, but also VMI and SOMI system. Periodically we would meet 2-3 per month, and everybody was leaving each with a specific individual tasks to be met by next meeting. For each meeting a copy of the minutes of meeting were written where was noted that partial steps which have already been fulfilled, and others which have been set up.

3.1 The application for authorization of a customs procedure with economic impact and permit to operate a customs warehouse type C

Applications shall be submitted in duplicate to the registry office. In our case, with an office in Olomouc. Within 30 calendar days of the request, the office has to answer whether it is possible to operate the warehouse from the time which we proposed in the application.

Application forms can be obtained directly at the office, on the www.cs.mfcr.cz. The structure of these models is not mandatory. Member States shall use the forms of boxes that can enlarge as needed, or printed in the form of lines. Binding are only the fields with numbers including in customer version.

Any Member State may supplement these forms of boxes or lines for domestic purposes.
Thus added a line or box must have a serial number followed by the capital letter (e.g. 2A).

Mandatorily to be filled all the boxes with a bold numbers. To complete the application are on the website the instructions for their proper completion, including explanatory notes.

3.2 Requirements for filing an Ingersoll-Rand CZ

This request was submitted on March 20, 2009 in the office in Olomouc. Requirements for application include a detailed description to fill in various boxes, which must be entered:

1. Applicant Ingersoll-Rand CZ Ltd.

Šumperská No. 1345

783 91 Uničov

CZ27813941

2. Customs procedure: Customs Warehouse

In this box should be noted the customs procedure under which goods are to be released.

3. Type of authorization: 1

This is the first application, if the correction are given a numerical number.

4. Number of additional forms that are submitted to the system in the customs warehouse: 8

5. Location and type of accounts / records:

Ingersoll-Rand CZ Ltd.Uničov,

Šumperská No. 1345

783 91 Uničov

IR 278 13 941

Oracle Software

The box must be shown where the accounts are held. Enter here the location of management, tax, business and other financial data of the applicants. It goes on to specify the type of accounting, including a system in which accounts are kept.

6.a Time period:

01-05-2009

Here you specify the date on which it is required to permit the entry into force.

7. CN, description, quantity of supplies:

Kaučukové díly kompresorů, těsnění	Rubber parts of compressor, seal
Díly kompresorů a výrobky z plastu	Compressor parts and plastic products
Trubky z kaučuku	Rubber tubes
Papírové těsnění	Paper seals
Skleněná průhledítka	Sight glass
Ocelové spojovací trubičky	Steel connecting tubes
Příslušenství trubek	Accessories of pipe
Ocelové izolační pásy	Steel insulation strips
Ocelové podložky	Washer of steel
Ocelové pružiny	Spring of steel
Díly a výrobky z oceli	Parts and steel products
Měděné dráty pro použití v kompresorech	Wire of copper for use in compressors
Příslušenství trubek s mosazi	Accessories pipe of brass
Mosazné podložky	Washer of brass
Pružiny z mědi	Spring of copper
Hliníkové odlitky	Castings of aluminium
Štítky z obecných kovů	Labels of base metal
Čerpadla, části a součásti	Pump and parts
Kompresory, části a součásti kompresorů	Compressors, compressors parts
Sušičky, části a součásti sušiček	Dryers, parts dryers
Výměníky tepla	Heat exchangers
Filtry, části a součásti filtrů	Filters, filters and parts
Ventily, části a součásti ventilů	Valves, valve parts
Ložiska, části a součásti	Bearings. parts
Hřídele, ocelové zátky	Shafts, stopper of steel
Elektromotory	Electric motors
Části a součásti elektromotorů	Parts of electric motors
Spouštěcí zařízení	Boot device
Signalizační zařízení	Equipment for signalization
Spínače, vypínače, relé pro kompresory	Switches, relays for compressors
Rozvaděče	Switchboards
El. Vodiče a kabely	El. wires and cables
Izolační koncovky	Insulation Tips
Teplotní čidla, části a součásti	Temperature sensors, parts
Kontrolní měřící přístroje	Control meter

Table No. 1: List combined nomenclatures used in the company IR CZ

Source: [14]

Fill eight-digit CN (Combined Nomenclature) and the commercial or technical description of the goods, the quantity to be placed under a customs procedure. If we import more items CN present a list of four-digit CN code. Quantities are given in agreement with the office.

8. Compensating or processed products:

This box is for Ingersoll-Rand CZ Ltd blank.

9. Description of planned activities:

Legally allowed handling of goods in accordance with paragraph 1 of Article of the Customs Code, Article 531 of Regulation Commission No. 72 and Annex to Commission Regulation

· piling on new products

· labeling new merchandise labels stating its specific location in the warehouse

· the subsequent loading of goods

· the picking process, which is to be declared the next day (new layer of goods in one location in the warehouse, which will be internally marked as zone picking)

· after clearance of the subsequent removal of goods from the warehouse (from picking zone)

· in the case that we have to store two addresses, the next scheduled activity is the transportation of goods within these two storage

10. Economic conditions:

Ingersoll-Rand CZ Ltd. decided to request the establishment of
a warehouse from the ground below.

Transportation of goods from China is very expensive, so we try to fully exploit the capacity of the container. We are also bringing the goods that we will not need in coming days in production, and even for those goods will not paid immediately. Payment is made only when the goods is consumed. Financial reasons for our company will be of great benefit, if we do not have the goods at any given moment we do not need to pay customs duty and VAT.

11. Customs office:

a) Customs office of entry mode: Olomouc

b) Office of discharge: Olomouc

c) Office of discharge: Olomouc

Fill the office.

12. Identification: 1

Fill in the code that represents the expected means of identification, code number
1 = the serial number or manufacturing number.

Our company properly identify all goods received into the warehouse with a specific label code, which would replace the long number of a particular import alert. Goods are physically allocate by product type. During the inspection of import print inventory record of all goods imported from the record. The inventory will include the product number, the number of pieces in stock and place the pieces are stored. Based on this inventory to check stock status as well as physically.

Furthermore, the box must be filled up to No. 16.

16. Additional Information:

Apply for permission not ensure customs debt of goods and permission to CW variability warehouse.

Our warehouse is set up not only in the company Ingersoll-Rand in Unicov, we ask two addresses of warehouse.

1. Ingersoll-Rand ENG Co., No. Sumperska 1345, 783 1991 Uničov

2. Trading Moravia CZ spol. with r.o., U-pily 918, 783 91 Uničov

Contact persons: Vladimir Stránská, Tomas Vachutka, tel: 585 093 183rd

These persons are considered to be invited by the Customs office in Olomouc, in the case of control of the warehouses. They are not responsible for any discrepancies in the warehouse, but they will be present during the inspection of the warehouse and where differences will occure, they are going to sign protocol for Ingersoll-Rand's side.
Box No. 17 left blank.

18. Stock Type: C

Box No.19 - 22 left blank.

23. Usual forms of handling:

Handling in accordance with Article 109 of the Customs Code and Article 531 of Regulation Commission.

Storage and unloading of goods in the warehouse for a period of reduced production volumes.

Goods brought from the 3rd countries will be stored in the warehouse "PILA". It is internally divided into two zones - storing and picking. In the afternoon the goods will be from storing side to picking zone, so the goods will be ready for customs clearance on following working day. Overnight this transaction trigger the operation in system to generate an invoice which will be sent to us and to ERGAS TRANS in the morning. After the goods released into free circulation then is physically moved from
a customs warehouse "PILA" to the IR main building.

Storage and unloading of goods in a warehouse in the increased production volume.

Goods brought from the 3rd countries will be stored in the warehouse „PILA“. In the afternoon of working day the goods will be phisically moved IR main building where is going to wait over night for the invoice. After the release of goods into free circulation will be transferred directly to assembly lines.

Signatures on the application:

Directors of companies or persons who have power of attorney in representation in administrative proceedings pursuant to Regulation
No. 500/2004 Coll. Such persons are also eligible to represent IR in front of the Customs house to establish of a customs warehouse.

In addition to the above applications must be filled in the office the following documents:

1. proxy for representation on the establishment of a customs warehouse

2. lease of Moravia trading CZ Ltd

3. extract from the cadastre

4. plans of warehouses

5. contract - due to the introduction of a new office will submit the text below.

The absence of a contract / order

Ingersoll-Rand CZ Ltd. in 2009 changed the strategy of purchased parts for the manufacture of compressors. Will no longer be awarded annual contracts and sub-orders for specific quantities of goods for a certain period.

VMI system will be introduced. This system is for us financially advantageous, because purchased parts immediately consumed in the production of specific orders.

This mean that contractors have agreed with our company, minimum and maximum supply of particular goods, which are stored in our plant. At the moment the goods are still owned by the supplier.

Our company receives an order to manufacture the compressor, take the parts from the stock that are needed to manufacture the compressor. Invoice for the removal (SOMI) is generated, which is then pay.

The supplier will make his own order for the goods which was consumed and again make stocks in the warehouse.

Contract with the supplier - SOMI
Certificate of registration of VAT number.
Business register (not older than 3 months)

3.3 Other required documents for application for not ensuring the customs debt

The main objective of innovation of the warehouse was due to the economic crisis that not only increased the cost of repairs Uniform administrative documents, which provided by our Customs Service ERGAS TRANS Ltd, but also increase cash flow. This increase contributed to the fact that we do not have to pay for the motors, which we have in warehouse for 1 or 2 years. If these motors will store in the customs warehouse, we will pay only the duty for the motors that we actually consume immediately in production, and then sell the product.

Normally from the goods stored in customs warehouses shall be calculated on the basis of import invoices VAT and custom duty, and this debt must be ensured for example by global bank guarantee (Ingersoll-Rand would have to pass in the bank as 1 million, which would cover the customs debt in level of 1 million for the stored goods in the custom warehouse). Alternatively, could vouch for us under contract another company that would have their bank guarantee, but for this guarantee we would be charged 2.5 ppt of the value of the goods for which the company guarantee.

The customs office where the company is credible, allows companies to simultaneously with the application for a customs warehouse also apply for not ensuring the custom duty, in accordance with Article 88 of the code. Prerequisite for filing this application is that the company was paying in the past due debts in its tariff schedule. Given that we have registered for seven years with customs office in Olomouc, we decided to apply for not ensuring the customs debt. This exemption is granted on the basis of financial analysis of the company by tax office. Providing customs debt is obligatory in this case to the goods which consumed and not yet paid the customs debt. That debt must be paid no later than on 10th day from receiving of receipt of payment.

We request that the Customs Office in Olomouc, submitted together with the application for authorization for the procedure with economic impact and permit to operate a customs warehouse type C. This option was exercised on the basis of Article 88 of the CCC.

The customs authorities may release the goods under a suspense provision of security to ensure payment of customs debt, which could occur at the goods. As part of a scheme with suspensive may be subject to specific regulations governing the provision of security.
[22, p. 39]

For the permision to not ensuring the customs debt is necessary to provide:

1. audit report for last year

2. number of employees for the previous year

3. statement of cash flow (cash flow statement) as of 31. 12. 2008

4. temporal structure of overdue receivables as of 31. 12. 2007 and 31. 12. 2008, the breakdown overdue by 180 days, 180 - 360 days, over 360 days

The above-mentioned documents I presented to the Customs Directorate to carry out financial analysis. This financial analysis was carried out by Mr. Walter Demel,
a financial analyst.

Contact:

tel.: 585 111 282

fax.: 585 111 113

E-mail: @ w.demel cs.mfcr.cz

On the basis of the evidence for the financial analysis are exempted from guarantee up to figure of 6 million. Given that we asked for permission to 1st of May 1, 2009 have not yet been made the auditor's report for 2008. Supporting documents for the financial analysis were from 2007. Therefore, we received the permit to not guarantee the customs duty only for the period up to 31. 8. 2009.

If we want to continue to benefit from this exemption, we have to during the month of August to submit all the documents from 2008, and on this basis will be a new financial analysis. On that basis we will re-denominated, the new amount to which we do not have to ensure the customs debt for a period of one year.

3.4 Approval Process of customs warehouse

During the 30 days that the customs office has made available to the approval of the customs warehouse, we were asked to prepare warehouse space, as we have on the plan submitted before. We asked for two areas, in trading company Moravia CZ Ltd. and also for space in our warehouse in factory.

Trading Moravia CZ Ltd. - In this facility, according to the enclosed floor plan was the establishment of a warehouse in the left half of the building. We asked for the variable store. Variable means that the volumes of imported motors is changing, and therefore we did not vote for a separate lockable room for storage, because it would no longer be able to store any goods other than goods for customs warehousing. Variability of stock, we solved by the yellow-painted stands that are linked with chains (or tapes). For these chains are located sign in customs warehouse. All goods for customs warehousing procedure is limited by the stands, and in this space can not be any other goods. If in this area are the door, they must be locked.

Ingersoll-Rand - the space has been prepared in accordance with the plan as well as a storage facility in Moravia Trading CZ Ltd.

Competent legal department worker arrived at the premises to inspected and photographed the area and on April 24 2009 we were granted permission to operate a customs warehouse from 1 .5. 2009.

3.5 Stocking goods in a customs warehouse

After mastering all the theoretical preparation and processing of permits, we received the first container of motors from the company Hebei.

Given that the Ingersoll-Rand has authorized consignee for import goods, such authorization was used for this container. This permit authorizes us to do that we do not have to take the goods Customs office. Car with a container arrives in
Ingersoll-Rand CZ Ltd, where the driver hand over the T1 declaration.

This document shall be sent by fax to the company ERGAS TRANS Ltd Olomouc (this company is about 300 m away from the Customs office in Olomouc). Based on indirect representation our IR company provides us with customs services.

The customs declarator from the company ERGAS TRANS LTD., electronically logs the goods into the customs system and is waiting for 30 minutes for permission to unload the goods. In the event that during those 30 minutes the Custom house in Olomouc does not respond by coming to check the catalog or call the company that this car should come for inspection to the office in Olomouc. The declarator e-mail a message to IR CZ to responsible person that the unloading is allowed, and motors can be passed to the warehouse area.

Customs Coordinator ensures the delivery of the original document T1 within 3 days after reporting to the office in Olomouc. At the moment when the customs coordinator deliver an original T1, it is possible to issue the import customs entry of goods placed under the customs warehouse. Such customs import entry is assigned a 4 digit number eg 0901 The first two digits indicate the year, a second serial number of the shipments that have been taken into the customs warehouse. This four-digit code customs coordinator reports not only to income worker, but also to customs declarator in ERGAS TRANS Company Ltd., as an integral part of the further evidence of the goods.

Each pallet prior to lodging the warehouse is labeled with product number, and above
4 digits code. Furthermore, the label indicates the number of pieces. The label is printed on the receipt of specific goods into Oracle.

Picture No. 1: Registration lable

Source: [15]

3.6 Evidence of goods in warehouse

Customs Service ERGAS TRANS Ltd keep records about our goods and dispatches of the goods in the warehouse. These records are kept in Excel. By every movement of stock we receive from them new updated Customs Service table.

Č. povolení	No. authorization
Ev.č. JSD	Re.No. SAD
Ze dne	Of day
Fa č.	In No.
JSD ev.č.	SAD re.No.
Pol. JSD	It. SAD
Celní zařazení	Customs tariff
Podpis	Signature
Částka	Amount
Cena za jeden.	Per unit
Počet kusů	Number pieces
Hmotnost btto	Weight btto
Hmotnost netto	Weight netto
Celkem	Total

Table. No. 2: Registration warehouse - storage

Source: [23]

Realizace	Realization
Zůstatek ke dni realizace	Balance on day realization
Poř.č. realizace	Se.No. realization
Realizační faktura	Realization invoice
JSD ev.č.	SAD re.No.
Dne	Day
Částka	Amount
Cena za jeden.	Per unit
Počet kusů	Number pieces
Hmotnost btto	Weight btto
Hmotnost netto	Weight netto

Table No. 3: Registration warehouse– removal

Source: [23]

In Ingersoll-Rand, this register is kept in the Oracle . Any control can be done by comparing these two records. If there are discrepancies, then is performed a physical inventory in the warehouse.

Table No. 4: Registration warehouse

Source: [15]

3.7 Deliver from the warehouse

Celní sklad	Customs warehouse
Fyzický převoz materiálu	Physical transport material
Vystaví	exhibits
30 minut čekání na zpětnou vazbu	30 minutes waiting for feedback
Uvolnění dílu do výroby	Release parts for production

Picture No. 2: Diagram of removal from warehouse

Source: [14]

Based on the request of the production planners is made customs clearance and removal of motors from the warehouse.

In the first stage motors are prepares for the removal so-called warehouse picking zone. This zone is part of the warehouse. It's a broad area without motors, but also bounded stands with signs Customs warehouse. On the surface are placed motors which are to be cleared. The Oracle system the warehouse worker transfer the motors from location
SOMI BW to location SOMI UN. This removal takes place between 6 - 9 am in the morning. After 9am the system is closed for such transfer and is generated report Fig. The report described how many motors, IR item number of the motor. It is also indicated in the report, from which single custom document are to be depreciated. Consumptions of the motors are based on FIFO rule, i.e., The first received into the warehouse are taken first out of the warehouse. In one hour (for now it is set up this system) is based on this reports is generated self billing invoice Fig. Report and invoice are sent to the Customs Coordinator, to import coordinator, to workers in the warehouse and to the Customs Service, which based on this documents does the customs clearance .

Once the goods cleared customs declarator writes to a worker receiving e-mail. Worker then transfer the motor in the Oracle from SOMI UN to location UN. Workers move the motors physicaly from the warehouse to a particular assembly line, where they are immediately assembled into the compressor.

Picture No. 3: Report of remove from warehouse

Source: [24]

Picture No. 4: Self invoice

Source [24]

3.8 The temporary exemption from the customs warehouse

Goods stored in the warehouse must not be removed from storage and returned back without the approval from the Customs Office in Olomouc. It is for example to check whether the motor is functional. For such cases the customs office must be requested
a temporary exemption. This mean that the company report to customs house which motors wants temporarily removed from stock for inspection. Approximately in one week Custom house will issue permit for removal of these motors, and for their return to the warehouse.

3.9 Manual removal from warehouse - URGENT

Already with the first shipment was a problem. Transportation of containers from China takes long time and so it is often necessary to transport the motors via air as an emergency. These urgent motors in not possible put them in the stock and remove them in the same manner as other motors that do not have to go as a priority through customs clearance. From a customs point of view there is no problem with not to put them into the warehouse, but be invoiced directly for free circulation. Unfortunately, the company signed a contract with Hebei, that all motors will be paid based on self billing invoices. Invoices are generated on the basis of removal of the motors from the warehouse. It would be difficult and confusing to set up a new system to generate invoices for emergency motors. Therefore we use to obtain the same way, as for the motors which are intended for the warehouse. After the arrival of these motors to the company, and after the approval for unlodadingt(I do not understand this word) , we do not wait for import record number or the four-digit code. We do not make the Import records and four digit code is always the same 0900. Based on this code, the goods are immediately taken to the warehouse (fictitious), and immediately under the same code is released from storage SOMI BW to SOMI UN, which will generate reports and invoices. At the same time the motors are immediately debited from the warehouse and the evidence of import records is not interupt.

These motors are not waiting for urgent removal during the time between 6 - 9 hours in the morning. This urgent loading and unloading can take place anytime during the day. This manual removal can only happen with approval from logistic manager. After his approval, the self-billing invoice in triggled(I do not understand this word) manually. The customs co-ordinator, or import coordinator, advises the manual dispensing from a bonded warehouse the IT specialists. They ensure that the system is temporarily override to the immediate generation of custom invoices. In this manual case the system does not generate the report. Manual releasing must not take place between nine and ten o'clock in the morning, when the system is configured to automatically generate custom reports and invoices. If at the same time the system would be changed for manual dispensing of invoices, there would not generate an invoices, and data would be lost.

4 Methodology of custom clearance

Among the known software used by customs declarators are Koblers programs. Part of the software are also bonded warehouses. ERGAS TRANS Company Ltd., which provides for our company customs clearance has purchased a license for this program.

Company ERGAS TRANS Ltd keep for us previously mentioned warehouse records in an Excel table, so he has control between Koblers program and Excel table.

Customs documents issued for the receipt of goods in the warehouse and the removal from the warehouse differs only in paragraph 37 - arrangements. [16]

To import one record may therefore be some realization of the SAD (Single Administrative Document).

4.1 Simpfield procedures for customs clearance of the goods from the warehouse

The previously mentioned method is quite time consuming. Currently we does the custom clearance for more pieces of motors to make some safety stock. In case of emergency we are using manually released invoice. This turn in several people, who between them have share information about Urgent transfer and arrange for it the steps.

From a customs point of view, is possible to accelerate customs clearance with the permission for the simplified procedure.

Prerequisite for obtaining this permit is a frequency of expenditures from the warehouse. Given that the law does not define exactly how much must be within a certain time interval exactly motors removed from the warehouse, we can obtain such permission. We agreed on a particular process with the office in Olomouc as follows:

We can apply at the moment when we put as an attachment to the application records of expenditure from the warehouse back over a period of 2 - 3 months. Expenditure of the motors should be around 25 to 30 motors per week with a minimum of four weekly dispensing. If we reach a frequency output, and the volume, we will ask for such permission.

This permits will provide us with these benefits. Upon arrival of the motors we would not need to hand over the original of document, T1 to get issue an import alert. This import alert will be given to us immediately, and the original T1 we will have to send within three weeks. Also the motors in storage will not have to wait permission to put motors into free circulation as in traditional way, but we can use an electronic method of filing the realization of the SAD.

Conventional method means for the declarator, that he has to carry in paper form the declaration to the customs office, enter a queue of applicants waiting for a hearing, because the declarator must be present during the customs clearance. In a simplified procedure, the declarator will create a simplified electronic document for each output and send ti to the office. If the customs office will not contact the declarator within thirty minutes after receipt that they want to see the goods, company can take the goods into consumption.

Part of the future permission will be the term of how often the summary declaration of customs declaration must be presented.

Example: 14 days we will every day send only the simplified declaration that you include in this period in the summary declaration. Based on this summary declaration we will recover the customs debt completely for all output from the warehouse over the last 14 days.

5 Reclamations from the warehouse

Integral part of contracts with each supplier is the procedure for reclamations of defective products. There are several options for complaint from the warehouse. If we find that the goods were faulty before the customs clearance, and the contractor agrees to return the goods, this is the most ideal option, will ERGAS TRANS issue the T1 customs document, with we send the goods back. Based on this evidence we settle the number of pieces in stock and import document.

When we discovered that the goods are faulty after customs clearance and the supplier agrees to return the goods ERGAS TRANS Ltd. open the export SAD with which we send the goods back. On the basis of the SAD and the statement from the company Hebei, we request within 12 months from customs clearance of goods for drawback the customs duty.

When we found out before we commit, that the goods were defective and the supplier disagrees with the return of faulty goods back, we are obliged to destroy the defective goods under customs supervision.

Procedure for destruction of goods under customs control:

we have to arrange from the fa Hebei, a statement that the goods is defective and that company agrees with the destruction of goods, and with selling to ASA (Goods at the moment it is not our property).

Hebei Company send credit for the import invoice (Proformas), with which the goods were imported into the CZ. Based on this we will credit belittled the value of the import entry.

we give the request to the Customs Office about the destruction of goods under customs supervision (we have to give them the proposed date, location, product description, quantity, number of import record, and how the goods will be destroyed.

prepare the castings or motors for destruction, and we will wait for arrival of customs agents. This is charged (approximately CZK 6 per km - travel and CZK 50 for every 15 minutes of their presence in the company)

the destruction of the goods

a) aluminum castings (eg drilling destroy them, or incising)
Thus they are sold to ASA to take them for resale. The amount you gain will be cast as a basis for customs clearance aluminum waste. Selling price per casting will be very low. Most likely this wil result in zero duty..

b) motors (eg, destroy them by cutting the cables)
Company A.S.A. after Customs officers departure, transferred the damaged motors to Zábřeh in Moravia. There will be dismantled and sorted according to materials (plastics, aluminum, iron, copper, etc.) be issued a document for the purpose of which will be seen to what tariff lines, the spread engine (each weight must agree with the total weight of the engine, and individual prices have combined to put the price at which we sold the engine. The sorted waste is segregated. Again there is a high probability of zero duty.

on the basis of the Protocol from the destruction and the amount collected as waste, the company will issue an SAD in ERGAS TRANS Ltd (price for SAD in the company ERGAS TRANS Ltd for waste of aluminum castings will be around
300-350 CZK; motors will be more waste items - the price of the SAD will be about 700 CZK)

When we discovered after customs clearance, that the goods are defective, and the contractor does not agree to return the defective goods back, we can proceed in the same manner as in option # 3 Change will occur at the end of the event. After the process of customs clearance and destruction of waste we get SAD, on which we ask for repayment of the original customs clearance of motors or castings. If the SAD is zero waste, we will be in the original SAD repaid the entire amount. If we pay for the waste duty, will be returned to us only difference from the original SAD.

From a customs perspective, I would suggest that the reclamations should returned to suppliers. In the event that claimed goods remain the best is declare the goods (even if they already know before duty, that the goods are defective), and then sell it to ASA. Informe(I do not understand this word) the suppliers respects the amount of duty as our costs associated with the settlement of claims, and this to our company (duty - the sale of waste = cost per claim). The motors have a smaller collection from the warehouse which mean zero duties. We only pay duties with a larger collection , but there is a need to evaluate based on options 3 and 4, whether it makes sense to reclaim those duties. Fees for the arrival of tax collectors and the waste issue SAD may exceed the amount of duty drawback. Into liquidation under customs supervision makes sense to run only if a larger accumulation of the material and calculating the duty for which we have applied for return. When collecting material, we unfortunately have limited time for customs clearance of motors (1year). After this time, we lose the right to drawback.

6 Analysis of financial savings

Ingersoll-Rand CZ Ltd in the event of insolvency do not apply for cash from banks, but on the basis of agreements to help out between the inter-companies within the corporation.

The basis for calculating savings we will take amount 6 million CZK, which would have been deposited in the bank as a bank guarantee of the security and DPN for the goods that we have stored in the warehouse. Customs Office in Olomouc has allowed us not to guarantee the customs dept, and therefore we can freely dispose of this amount.

Interest rates on time deposits for businesses and individuals - entrepreneurs, from various domestic banks and are often tied to specific business and personal conduct.

They are usually on time deposits still bound by any bonuses and benefits. Found interest rates on term deposits of one year range from 2 % for Komercni bank to 6 % at Raiffeisen Bank. When the amount of 6 million crowns, which would be linked as a bank guarantee for the office, therefore, is for the amount of CZK 120 000 for Komercni bank to 360 000 CZK mentioned at Raiffeisen Bank

Further savings are certainly the amount we must pay to ERGAS TRANS Ltd for repairs SAD due to changes in the price of motors. This analysis is no longer irrelevant to deal with, since the warehouse in our company is already implemented. These repairs will not be carried out in the future.

Currently, we have customs cleared approximately 2 500 pcs motors in our company. For this reason it is so far very few motors are imported into the customs warehouse. When increasing the volume of orders and consumption of customs cleared motors will be higher there is going to be increase in import into a customs warehouse. The calculation below is only a small sample of the goods supplied a very short period. For now we store in custom warehouse only goods , namely motors, from company Hebei. In February of this year we are going to store the imported goods - aluminum castings from RIGHT WAY company from Malaysia.

That and the calculation of the amount of savings of 1 857 CZK therefore appear low, but it should be noted that this is for a period of about a third of the year. Year savings would be around 6 000 crowns. This annual value of savings is achieved in a period of profound economic recession, during which there was a large decline in production. Under normal economic situation and the further dilution of deliveries of items could lead to cost savings as more as 20 000 CZK per year. You will not have to buy supplies and pay for storage, reduces the necessary financial resources to cover them by an average of
€ 6 million per year, at a rate of 10 percent.

6.1 SWOT Analysis

Implementation of the proposed solution and used of the warehouse at
Ingersoll-Rand CZ Ltd we can evaluate by using the SWOT analysis. This analysis showing the so-called strong and weak points (strengths and weaknesses) assessed from the perspective of the company. External factors will reflect the opportunities, benefits and risk, threat (Opportunities and Threats).

Specific evaluation is as follows:

Weaknesses

Relative intensity and complexity of administrative activities
Increased demands on the accuracy of the activities of engaged workers

Strengths

Detailed and comprehensive instructions
Simplify the delivery reclamations
Increased cash flow due to postponement of payment of duty and VAT and
a reduction of entitlements to cover stocks

Benefits, Opportunities

Easier and faster communication with the Customs Office
Reduce of the dependence on foreign sources of finance
Easy return of excess stock back to supplier
A simple solution to change a stock thanks to change in production program
Simple solutions for obsolete goods

Threats, risks

Withdrawal of the permit to operate a bonded warehouse in violation of agreements with the Customs House
Penalties and fines from the Custom office of up to CZK 4 million for non-compliance procedure

6.2 Financial contribution

The introduction of the bonded warehouse, according to data from the logistics department will reduce the production stock in Ingersoll-Rand CZ Ltd approximately by
5 500 000 CZK. This amount would increase the need for foreign funding sources. This financial need would be fulfill by the operating loan from KB. Specifically, this would be Profi loan FIX. With this loan is fixed interest rate, which follows the List of Charges for commercial banks. Profi loan is repaid by monthly annually payments and is used to finance current assets (stocks and short-term receivables) and from trade due dates. The loan must be secured by guarantee on the bill of exchange. Profi loan can be draw gradually or even as single use and is only in CZK. The advantage of this loan is that it is provided free of charge; has payment protection insurance and has greatly simplified process of the approval.

The interest rate for the maturity of one year, which in this case would be applicable is 10.9 % per annum. For revolving loan drawn, the annual amount of interest would be

5.5 million CZK broken 100 times 10.9 equals 599 500 CZK, so around 600 000 CZK.
This calculation shows that the annual benefit for the company because of the introduction of bonded warehouse is around 600 000 CZK per year.

Evalution of assets of the benefits for company

CONCLUSION

This thesis is a summary of the theoretical knowledge on the subject of a customs warehouse and their subsequent application in practice over a period of approximately six to eight months. Each new initiative was immediately incorporated, each concrete step has been prior consultation with the team.

At the beginning of the project was a problem with cash flow in the company
Ingersoll-Rand CZ Ltd The cause of this problem was not only current economic crisis, but also old fashioned and inefficient way of purchasing material for the compressors. It was necessary to evaluate the current method of purchasing and especially immediately reduce the stocks of goods in the warehouse.

We were inspired by foreign partners who have already changed the system of stock management. We split the tasks of the team, and gradually acquired information as they were for us at that moment a "model" systems to implement in our company.

Gradually, we have formed a mosaic of this imaginary. Reward for our efforts was
a functional system. The system, which connects VMI, SOMI and Customs warehouse. Motors purchased from Hebei Company, are currently already imported exclusively by the customs warehouse. They do not provide debt or duty and VAT. Motors until the consuption are not our property and we take no risks for them. We know that we can deal with the excesses of these motors, with the simplest customs way as possible and return them back to the supplier without paying these duties.

We are at the beginning of this newly established system, which we will certainly further improving. In the warehouse we will ask for simplified procedure.

In the month of February we will close the traditional deliveries with other supplier from Malaysia Right WAY. From this company we will import rough aluminum castings in uncompetitive price. For motors imported from China, customs duty is 2.7 %. The amount of the duty on aluminum castings from Malaysia is 6 %. In a larger volume of imported castings stock will again be a big savings when casts will store in the bonded warehouse until the time of consumption. Our next aim is to persuade our other suppliers, so they also signed a contract for this method of delivery.

ABSTRACT

STRÁNSKÁ, V. Innovation of customs warehouse type C, Kunovice 2010. Bachelor thesis. The Polytechnic Institute, s.r.o. Supervisor: Ing. Jana Minaříková.

Key words: inventory, turnover time, analysis, the single administrative document.

My bachelor thesis could be a useful guide for companies that have excess of inventories, which means unnecessarily imposed funding. These funds would be better to invest and assess. The aim of this thesis is in accordance with the Customs Codex to build in the company Ingersoll-Rand CZ s.r.o. "Customs warehouse type C“. By building this warehouse and by introduction of VMI and SOMI system will be achieve an increase in cash flow in the company.

In the first part of my bachelor thesis I am describing the current methods of purchasing and storage of goods in the company Ingersoll-Rand CZ s.r.o. and comparing this method with modern methods of material management in the world.

The second part is devoted to the realization of the „Customs warehouse type C“ and to methodology of custom clearance, reclamation and to simplified customs procedure.

The third part of my work is analysis, in which I quantify the contribution of above mentioned warehouse for Ingersoll-Rand CZ s.r.o. In the analysis I use commonly used methods, including SWOT analysis.

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List of pictures

Picture No. 1: Registration lable…………………………………………………………..23
Picture No. 2: Diagram of removal from warehouse ……………………………………..26
Picture No. 3: Report of remove from warehouse ………………………………………...27

Picture No. 4: Self invoice………………………………………………………….……..28

List of tabeles

Table No. 1: List combined nomenclatures used in the company IR CZ ……..................14
Table No. 2: Registration warehouse - storage……………………………….……...........24
Table No. 3: Registration warehouse– removal………….……………………………….25
Table No. 4: Registration warehouse ……………………………………..........................25