Integrated Management of Services in Cash Logistics

Service Management is currently an important topic. Almost every provider of products and services has recognised that vertical integration improves and that customer loyalty can be increased, if the appropriate services are offered around the client’s own products and services to make the introduction and use of a product easier for clients or help to make the provided service integrate seamlessly into the company.

But what can be done if the client's desired "end product" is a complex service that can only be sourced from a provider working in partnership with a network? Where will the coordination of these services take place and who should maintain the overall picture? As a striking example of this, we take a look at an example of the cash logistics for a motorway service station.

At first glance, it may seem that a motorway service station is not particularly complex, but upon consideration of the case in detail, there prove to be a number of circumstances in the checkout operations that make the whole operation a real challenge:

  • This is a real 24/7 operation. The entire checkout management must take into account that there can never be a real "cut" because the checkouts are permanently in operation.
  • There are a variable number of checkouts that are operated in shifts. This means that checkouts can be opened, closed or there are staff changes, with no fixed time points.
  • The checkouts are used for different jobs. At one checkout goods are sold that the company handles in entirely different ways for billing purposes, e.g. the sale of fuel, food and other travel requisites.
  • In addition to the traditional checkout there are a number of other cash cycles that are also included in the overall concept: coffee machines, other vending machines, gaming machines and Sanifair "hubs". Here, too, the various sub-contractors and suppliers require a dedicated accounting of the services they provide and the cash collected from them.

What cash logistics services are required here?

The large number of flows of cash to be coordinated calls for a range of services that comprise the whole of cash logistics for such a service station operation:

  • Each checkout must be managed appropriately in accordance with the different accounting arrangements and included in a general overview.
  • Each checkout must be settled using a "layered model" such that several layers can be opened up simultaneously in one checkout.
  • It has to be possible to combine all cash movements into different accounting groups, depending on which service provider is to be paid with the respective cash receipts.
  • The cash recycling system for banknotes and coins serves as a central hub for all cash movements. This serves the supply and disposal of cash for the checkouts and at the same time acts as central storage for change within the service station.
  • Actual revenue must be available as quickly as possible as "scriptural currency", i.e. as bank credit so as not to burden the company’s liquidity. Of course, liquidity and its converse - disposal costs - must be reconciled.
  • And finally, the most critical requirement: the supply of change must be guaranteed! A motorway service station where checkouts cannot provide change has a serious operational problem!

The services to be provided and by whom?

To depict the services described above, multiple service providers are required:

  • The actual money transfer - the key task, so to speak – requires a cash-in-transit company (CIT). This company has several tasks:
  • The collected monies must be disposed of as per the agreed schedule and paid into the Bundesbank.
  • The requisite change must be delivered on time and sufficient supplies stored on-site.
  • In general, the operational readiness of the recycling equipment as well the money stocks must be continuously monitored. This monitoring, as well as the needs-based planning of supply and disposal, can be used to optimise cash holdings.
  • To ensure the timely availability of the collected monies and simultaneously to optimise the disposal rhythms, a bank must act as guarantor for the collected inventory. When the monies are collected into the recycling system, the bank will credit a specific fixed portion of the collected monies into one of the service station operators’ accounts, regardless of the time of collection and together with the CIT fulfil the banking requirements for supply of change in the service station with coins.
  • The pivotal point of the entire logistics is a cash recycling system for notes and coins. Availability of notes and coins is crucial for the stability and smooth operation of the cash logistics processes. For this reason the technical service responsible for operational readiness must be constantly monitored and if necessary rapidly become active.
  • The service station operator is also an active part of the overall process for cash logistics. Various activities, for example, such as the refilling of change from the safe as it runs out or the spontaneous clearing of occasional jams in note or coin payment machines can only be done by someone that is immediately available on the spot.

Special challenge: integration of processes

A particular challenge in the interaction between all these partners – as our experience has shown - is that not only at the joint interface with the customer, but also within the organisations of each of the individual partners, process modifications may also be necessary to meet demands. For example, the CIT must have flexible ordering and stocking processes available to be able to meet the requirement for needs-based supply and disposal. The practices common to many systems with static route planning and multi-day order lead times are not sufficient.

The participating financial institution must provide account management models and organise closer cooperation with the CIT to ensure the controlled handling of the early valuation and the subsequent comparison with the actual deliveries made.

Finally, all parties involved in the technical service must find a flexible form of co-ordinated planning to meet the requirements for recovery in the event of technical failures when they occur.

And who keeps track of everything?

To map this whole scenario an organisational solution is required that provides a central focal point that is aware of all cash on hand, cash inventories, and cash movements and offers all participants a custom view of the information they need to be able to deduce and plan their own sub-tasks.

This pivotal point is provided by CETIS cash handling, S&N AG’s standard product for the management of automated cash checkouts, supplemented by a number of features that address this specific application:

  • Existing inventory systems for cash management would be expanded to include management of a safe that allows cash reserves, for example in the form of Safebags or coin rolls stored separately, to be included in the total cash flow.
  • A management layer for checkout balances would be implemented. This would seamlessly map the entire cash layer process from opening through any intervening levies or refills of change until closing of the layer.
  • Specific levy models for particular money stocks (such as "mass coin deposits" when unloading machines) as well as sepcial filling models (e.g. "manual filling" in change recycling) integrated into the service functions of the device control.
  • A specially extended web front end provides all stakeholders with an authorisation model providing customised access to the relevant information and service functions.
  • The entire process is rounded off by a flexible reporting model that is designed specifically for the monitoring of money flows and to optimise cash storage and the cash storage processes

Such a scenario proves once again that CETIS-CH has more than fulfilled the requirement that was originally set to be more than just a monitoring system for cash devices but rather the complete mapping of the concept of "automated cash checkouts".

Further extension of CETIS-CH to other sectors is already underway and it remains to be seen when CETIS-CH will set an industry standard.

Contact: Thomas Vogel; Turn on Javascript!