Hi Sam
You can have same material code managed as consignment material. Material type does not change when you take the stocks in consignment. The materials that you already have as your own stock, you can put them in consignment as those already purchased and you have paid the amount for them.
Movement type use convert consignment stock to your stock 411+K, so 412 do the reverse of it. But does your vendor going to pay the amount for conversion you are doing.. Consignment means you have no ownership.
If you can post what is Kernel team have to do with consignment process and post the errors we may able to help you.