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ANALYSIS OF INVENTORY AFFECTS
THE MANAGEMENT OF CASH FLOWS
(CASE MANAGEMENT STUDY IN PT. UMBUL RASAKI)
SKRIPSI
By
MISA KHAIRIAWATI
008201000048
Presented to
The Faculty of Business, President University
In partial fulfillment of the requirements
for
Bachelor Degree in Economics, Major in Accounting
PRESIDENT UNIVERSITY
Cikarang Baru – Bekasi
Indonesia
2014
ANALYSIS OF INVENTORY AFFECTS
THE MANAGEMENT OF CASH FLOWS
(CASE MANAGEMENT STUDY IN PT. UMBUL RASAKI)
SKRIPSI
By
MISA KHAIRIAWATI
008201000048
Presented to
The Faculty of Business, President University
In partial fulfillment of the requirements
for
Bachelor Degree in Economics, Major in Accounting
PRESIDENT UNIVERSITY
Cikarang Baru – Bekasi
Indonesia
2014
i
PANEL OF EXAMINERS APPROVAL SHEET
Herewith, the Panel of Examiners declares that the skripsi entitled
“Analysis of Inventory Affects the Management Cash Flows (Cash
Management Study in PT. UMBUL RASAKI)”submitted by (name
of the student), Accounting Study Program, Faculty of Economics, has
been assessed and proved to pass the Oral Examination on March 5th,
2014
Chair, Panel of Examiner,
Dr. Sumarno Zain, SE, Ak, MBA
Examiner 1
Drs. H. Umar Subandijo, Ak, MBA
Examiner 2
Evita Puspitasari SE, Ak, M.Si
ii
RECOMMENDATION LETTER OF SKRIPSI ADVISER
The skripsi prepared and submitted by
N a m e : MISA KHAIRIAWATI Student ID : 008201000048 F a c u l t y : BUSINESS Study Program : ACCOUNTING Field of Study : ACCOUNTING Skripsi Title : ANALYSIS OF INVENTORY AFFECTS THE
MANAGEMENT CASH FLOWS (CASH MANAGEMENT STUDY IN PT. UMBUL RASAKI)
has been reviewed and found to have satisfied the necessities for Oral Defense as
partial fulfillment of the requirements for Bachelor Degree in Economics - Major
in Accounting.
Cikarang, Indonesia, 27, January 2014
Acknowledge Skripsi Advisor,
Dr. Sumarno Zain, SE, MBA, Ak Evita Puspitasari SE, Ak, M.Si
Head, Accounting Study Program Advisor
iii
DECLARATION OF ORIGINALITY
I hereby declare that the skripsi entitled “Analysis of Inventory Affects the
Management Cash Flows (Cash Management Study in PT. UMBUL
RASAKI)” is originally written by myself based on my own research and has
never been used for any other purpose before. I, therefore, request for Oral
Defense of the Skripsi.
Cikarang, Indonesia, 27, January 2014
Researcher,
MISA KHAIRIAWATI
(008201000048)
iv
ANALYSIS OF INVENTORY AFFECTS THE
MANAGEMENT OF CASH FLOWS
(CASE MANAGEMENT STUDY IN PT. UMBUL RASAKI)
ABSTRACT
Inventory is one of the factors that the company needed in continuing the business during the operation, whether it is for operational of company or as inventory that ready to sale. Inventory is one of the factors that give influence to management cash inflows and outflows of the company. Moreover the cash flows that involve during the providing process of inventory.
In this study, qualitative method is used by comparing the theory / best practices with the implementation / current business process of the company. The information about the current and existing condition of the company is done by inquiries the company, observation, and documentation. In addition, this study is to discuss and emphasize the effects of inventory towards the management of cash inflows and outflows during the operation process of company.
This case management study finds that the business operation process according the inventory process in this company still need more correction and revision in implementation of process. Because of this problem of inventory process give some effects on the management of cash inflows and outflows during the operation process of the company. As a result of this case study, to create the management of inventory to make the using of cash inflows and outflows is effective and efficient during the operation. And make management of cash inflows and outflows that related to inventory process efficient.
Based on the results of case management case study, the writer suggested to the company for make the management of cash inflows and outflows related to inventory process. It is conducts by making the estimation of cash outflows before the operation is processing, evaluate the using of cash during the inventory process, more make the documentation related to inventory and cash properly, and making the separate of using the cash by the owner.
(Key word: inventory management, cash inflows, cash outflows, management cash flows)
v
ACKNOWLEGDEMENT
First and foremost, all praise to my lord, Allah SWT, for the guidance,
healthiness, blessing and give me strength and grantee all these graces to finishing
this skripsi entitled “Analysis of Inventory Affects the Management Cash Flows
(Cash Management Study in PT. UMBUL RASAKI)”. This skripsi was made as
one of the requirement to finish Bachelor Degree Program Faculty of Economics
majoring in accounting, President University.
The writer also would like to dedicate and gratitude the all people for their
advice, support, guidance, motivation and help to finish this skripsi:
1. My Parent (Khairullazi & Normawati), grandmother (Arbaiyah), and my
sister (Ayu Ismaini), for your sincere love, pray, and support on me during
my study.
2. Mrs. Evita PuspitasariSE, Ak, M.Si as my skripsi adviser who always gives
recommendations, corrections, and advices in completed this skripsi.
3. Mr. Misbahul Munir MBA, Ak, CPMA as dean of economics President
University.
4. Mr. Sumarno Zain, SE, Ak ,MBA, As head of Accounting Study Program of
President University.
5. PT. UMBUL RASAKI that give chance and opportunity to doing my skripsi
research during this time.
6. My all family, my uncle Fathurrahman, my aunties Khairunnisa, Dine
Nursanti, my beloved friends, Novia Yusvita (Mbak e), Tia Wulan Sari, Sinta
vi
vii
Dian Sari, Veridiana, Trisa Pramudita, and other friends for all love, care,
motivation and support.
The writer realizes that this skripsi is still need suggestions, critics, for
improvement from the readers. Finally, the writer hopes this skripsi can be
useful for the readers.
Cikarang, 2014
Misa Khairiawati
viii
TABLE OF CONTENT
INSIDE TITLE.......................................................................................................................... i
PANEL OF EXAMINERS ...................................................................................................... ii
RECOMMENDATION LETTER OF SKRIPSI ADVISER .............................................. iii
DECLARATION OF ORIGINALITY ................................................................................. iv
ABSTRACT .............................................................................................................................. v
ACKNOWLEDGEMENT ...................................................................................................... vi
TABLE OF CONTENTS ..................................................................................................... viii
LIST OF FIGURES ............................................................................................................... xii
LIST OF TABLES ................................................................................................................ xiii
CHAPTER I INTRODUCTION ............................................................................................ 1
I.1 Research Background ............................................................................................... 1
I.2 Problem Identification and Statement ...................................................................... 3
I.3 Research Scope and Limitation ................................................................................ 4
I.4 Research Objective ................................................................................................... 4
I.5 Research Benefit ....................................................................................................... 5
I.6 Research Method ...................................................................................................... 5
ix
CHAPTER II LITERATURE REVIEW ............................................................................... 7
II.1 Definition of Cash Flow .......................................................................................... 7
II.1.1 Cash Inflows ............................................................................................. 9
II.1.1 Cash Outflows ........................................................................................ 10
II.2 Cash Flow Management ........................................................................................ 10
II.3 Definition of Inventory .......................................................................................... 11
II.4 Inventory Management ......................................................................................... 13
II.4.1 Definition of Inventory Management ..................................................... 13
II.4.1.1 Economic Order Quantity ....................................................... 14
II.4.1.2 Analysis Inventory Control ..................................................... 15
II.4.1.3Reorder Point............................................................................ 16
II.5 Operating Activities .............................................................................................. 17
II.6 Working Capital .................................................................................................... 18
II.7 Inventory Turnover ............................................................................................... 20
II.8 Cash Conversion Cycle ......................................................................................... 21
II.9 Receivable ............................................................................................................. 23
CHAPTER III DATA PROCESSING METHOD AND COMPANY EXISTING
CONDITION .................................................................................................. 24
III.1 Data Collecting and Processing ........................................................................... 24
III.1.1 Literature Review.................................................................................. 25
x
III.1.2 Field Research ....................................................................................... 25
III.1.2.1 Inquiry of the Client ............................................................... 25
III.1.2.2 Observation ............................................................................ 26
III.1.2.3 Documentation ....................................................................... 26
III.2 Company’s Existing Condition ............................................................................ 27
III.2.1 Company Profile ................................................................................... 27
III.2.2 Inventory Existence .............................................................................. 32
CHAPTER IV ANALYSIS AND EVALUATION ............................................................. 37
IV.1 The Objectives and Scope of The Evaluation ..................................................... 38
IV.2 Conducting the Analysis and Evaluation ............................................................. 39
IV.2.1 Preliminary Survey ............................................................................... 39
IV.2.2 Testing and Evaluation on Management Inventory .............................. 40
IV.2.2.1 Raw Material Ordering Process at PT. Umbul Rasaki .......... 42
IV.2.2.2 Production process at PT. Umbul Rasaki .............................. 44
IV.2.2.3 Storage process at PT. Umbul Rasaki.................................... 47
IV.2.3 Testing and Evaluation on Management of Cash Flow ........................ 49
IV.2.3.1 Purchasing Activities at PT. Umbul Rasaki does not have the
fix schedule ............................................................................ 49
IV.2.3.2 Inventory Turnover at PT. Umbul Rasaki ............................. 51
xi
IV.2.3.3 Receivable and Cash Conversion Cycle at PT. Umbul Rasaki
................................................................................................ 52
IV.2.3.4 The time of Collection of Receivable does match with The
Time to Purchase the Raw Material ....................................... 54
IV.2.4 Analysis the Effect of Inventory towards The management of Cash in
and Cash out ............................................................................................ 55
IV.2.4.1 Inventory Process of Raw material for Production process at
PT. Umbul Rasaki Influence the Cash Out ............................ 55
IV.2.4.2 Purchasing Time of Raw Material Affects The Using Of Cash
or Fund of PT.Umbul Rasaki ................................................. 56
CHAPTER V CONCLUSION AND RECOMMENDATION ........................................... 58
V.1 Conclusion ............................................................................................................ 58
V.2 Recommendation .................................................................................................. 62
BIBLIOGRAPHY
APPENDICES
xii
LIST OF FIGURES
Figure 1 operation cycle ........................................................................................ 18
Figure 2 Cash conversion Cycle ........................................................................... 22
Figure 3 Logo of PT. UMBUL RASAKI.............................................................. 28
Figure 4 Organization Chart.................................................................................. 30
Figure 5 Sketch of Pools/Basin ............................................................................. 31
Figure 6 Moa (eel) (Sidat or Unagi) ...................................................................... 32
Figure 7 Pools or Basin ......................................................................................... 33
Figure 8 the Product “Unagi Kabayaki” ............................................................... 34
Figure 9 Purchasing Process ................................................................................. 34
Figure 10 schema of purchasing process .............................................................. 43
Figure 11 Production process ................................................................................ 44
Figure 12 Operation Flows PT Umbul Rasaki ...................................................... 48
xiii
LIST OF TABLES
Table 1 Summary of purchasing for one month.................................................... 50
Table 2 Summary of Sales in One Month ............................................................. 51
Table 3 Inventory Turnover in six Months ........................................................... 52
Table 4 Summary of receivable for one month ..................................................... 53
Table 5 Receivable Turnover ................................................................................ 54
1
CHAPTER I
INTRODUCTION
I.1 Research Background
Nowadays, business economic development in Indonesia growth rapidly
so, businessman must be work efficiently to compete with others to make their
business can survives. The continuance of the production process in certain
company will influenced by several factors such are: capital, Technology, raw-
materials inventory, finished goods inventory, and labor. Inventory is one element
of working capital which is a current asset that always in cycle and more liquid
than others element like cash, account receivables, and marketable securities.
Developing and implementing an effective inventory management system will
lead to improved cash flows, higher business valuation, and ultimately a more
profitable business.
Rob Reider defined that efficiency (or methods of operation). The
organization is carrying out its responsibilities with the minimum expenditure of
effort. And effectiveness (or result of operation), the organization is achieving
results or benefits based on stated goals and objectives or some other measurable
criteria. (Reider, 2002)
Inventory is an asset that is owned by a business that has the express
purpose of being sold to the customer. This includes items sold to end customers
or distributors. It includes raw materials, work in process, and finished goods.
2
The management of inventory is a key concern of all businesses. If a company's
inventory level is too low, it risks delays in fulfilling its customer’s orders. It also
the current asset who’s ending balance should report the cost of a merchandiser’s
products waiting to be sold. The inventory of a manufacturer should report the
cost of its raw materials, work in process, and finished goods. Managing the
inventory level is not the most exciting activity but is nonetheless critical in
maintaining the good cash flows. It is critical because the amount of the stock
represent the money that is tied up and cannot be used to pay the bills or re-invest
in business.
Thus, inventory levels that are too high or too low can have a significant
impact on company ability to manage the incomings and outgoings. In order to
generate cash for supporting the operation, we must efficiently and effectively
manage the activities that provide cash. These activities include billing customers
as quickly as possible, disbursing payments only when they come due, collecting
cash on overdue accounts, and investing idle cash. Therefore, managing cash
flow involves several objectives: accelerating cash inflows wherever possible,
delaying cash outflows until they come due, investing surplus cash to earn a rate
of return, borrowing cash at the best possible terms, maintaining an optimal level
of cash that is neither excessive nor deficient.
In organizing the flow of cash, company must be able to achieve the
optimum point where the amount of inflow bigger than outflow. In improving the
cash inflow related to company ability in decided to make investment for profit
and managing the cash outflow related to company ability in working efficiently.
3
The inventory cycle has relation to management cash flow of the company,
because it will effect on operating activities of the business.
Based on the description above, the researcher interested to choosing the
analyzing the inventory towards the management cash flow of the company,
because it is as window for company to know how the company manages their
money during company’s activities related to inventory and to know the
perspective of gaining the profit. So, the researcher composes this thesis with
title “Analyzing the inventory affects the management of cash flows (Case
Management Study in PT. Umbul Rasaki)”.
I.2 Problem Identification and Statement
Based on the research investigation, there are several common problems or
weakness incurred in PT. Umbul Rasaki. First of all, the researcher tries to
formulate problem as follows:
1. Is the management of cash flow of PT. Umbul Rasaki already running
efficiently and effectively?
2. How does PT. Umbul Rasaki can maintain and minimize the inventory
problem?
3. What factors of inventory cycle can effects on cash flow of PT Umbul
Rasaki?
4. How can inventory cycle effects on the cash flow of PT Umbul Rasaki?
4
I.3 Research Scope and Limitation
The research is limited in investigating the inventory effects the
management of cash flows of the company, investigating the inventory cycle
activities; control activates investigation, control environment of the inventory,
and information and communication investigation but not all criteria in control
activates, control environment, and information and communication that
investigated by the researcher, in other words only applicable criteria.
And the analyzing the effect of inventory cycle problems toward the cash
flow of PT. Umbul Rasaki as an Object of investigation. This research will be
focus on how the operating activities about the raw materials for inventory,
planning, and its effect on cash flow. Analyzing the effect of inventory cycle
problem on management cash flow to determine, whether the result of activities is
supported by regularities or standard, and thus will be implemented effectively.
I.4 Research Objective
Based on the background research in PT. Umbul Rasaki to analyzing the
effects of inventory in management cash flow, the objectives are as follows:
1. To analyze how the effect of inventory cycle on the management cash
flows of PT. Umbul Rasaki
2. To identify the factors that caused inventory cycle problem of PT. Umbul
Rasaki that will affect the management cash flow
3. To identify how to minimize the problem in the inventory cycle and get
the alternative solution.
5
I.5 Research Benefit
a. For Company
As consideration and suggestion for PT. Umbul Rasaki in improves their
operation activities related to inventory and its management cash flow. And give
the suggestion to solve for the inventory cycle problem as one factor in production
activities to produce the product as its inventory.
b. For researcher
It will be as enhancement of knowledge to understanding more deep about
the cash flow, what the factor that effect on it, the essential of inventory for
company practically, and enrich to analysis them and find the way to minimize or
solve the problem. Especially how the effects inventory on management cash flow
more deep and detail.
c. For reader
This thesis is expected to add insight and knowledge of the readers in the
field of management cash flow and the essential of inventory, the relationship
between inventory and management cash flow in practically and especially how
the effect of inventory on management cash flow of the company.
I.6 Research Method
a. Literature Review
In supporting data and information this thesis the researcher does
literature reviews and read other data sources related to the issues discussed to
6
enhance and complement the topic discussion. The aim is to obtain secondary data
that can be used as the basis for the researcher in preparing thesis.
b. Field Research
During the time of research that conducted survey to PT. Umbul Rasaki
to get the necessary data and to identify the actual company circumstances. There
are several methods that can be conducts during the research such are physical
examination, confirmation, documentation, inquiry of the client, analytical
procedure, Reperformance, and observation. In here, it is done by:
Inquiries of the client
The collecting data and information is conducted by inquiries with
the company management that relate to inventory and cash flow as
the research objects.
Observation
The researcher conducted review and direct observation to PT
Umbul Rasaki to get an overview of company circumstances
regarding to the inventory and management of cash flow.
Documentation
Researcher learns and do research company documents relating to
the cash flow, inventory, and related transaction.
7
CHAPTER II
LITERATURE REVIEW
II.1 Definition of Cash Flow
Cash flow is incomings and outgoings of cash, representing the operating
activities of an organization. In accounting, cash flow is the difference in amount
of cash available at the beginning of period (opening balance) and the amount at
the end of period (closing balance). It is called positive if closing balance is higher
than the opening balance, otherwise called negative. Cash flow is increased by
selling more goods or services, selling an asset, reducing the costs, increasing the
selling price, collecting faster, paying slower, bringing in more equity, or taking
loan. The level of cash flow is not necessarily a good measure of performance,
and vice versa.
Campbell stated that there is an old adage about business that "cash is
king" and, if that is so, then cash flow is the blood that keeps the heart of the
kingdom pumping. Cash flow is one of the most critical components of success
for a small or mid-sized business. Without cash, profits are meaningless. Many a
profitable business on paper has ended up in bankruptcy because the amount of
cash coming in does not compare with the amount of cash going out. Firms that
don't exercise good cash management may not be able to make the investments
needed to compete, or they may have to pay more to borrow money to function.
"Despite the fact that cash is the lifeblood of a business as the fuel that keeps the
8
engine running most business owners don't truly have a handle on their cash flow,
"Poor cash-flow management is causing more business failures today than ever
before." (Campbell, 2004)
Reeve, Warren, and Duchac stated that the statement cash flows is used by
managers in evaluating past operation and in planning future investing and
financing activities. It is also used by external users such as investors and
creditors to assess a company’s profit potential and ability to pay its debt and pay
dividends.
The statement of cash flows reports three type of cash flows activities as
follows:
1. Cash flows for m operating activities are cash flows from transactions
that affect the net income of the company. Example: purchase and sale
of merchandise by a retailer
2. Cash flows from investing activities are cash flows from transaction
that affect investments in noncurrent assets of the company. Example:
sale and purchase of fixed assets, such as equipment and building.
3. Cash flows from financing activities are cash flows from transactions
that affect the debt and equity of the company. Example: issuing or
retiring equity and debt securities.
The ending cash on the statement of cash flows equals the cash reported
on the company’s balance sheet (Reeve, Warren, & Duchac, 2009)
Analysis of cash flow primarily used as tool to evaluate the sources and
uses of fund. It is provides insight into how a company is obtaining its financing
9
and deploying its resources. It also is used in cash flow forecasting and as part of
liquidity. Many users analyze the cash flow to answer many similar questions.
The statement of cash flow is keys to the construction of many transactions, which
is important part of analysis.
Cash flow described as a cycle where the company uses cash to acquire
the resources that they needed for operation or production process to make the
inventory then to be sold. On the other words, the resources are put to work and
goods and services produced. Then, these are sold to customer. Company can
collect and so the cycle repeats. But what the crucially important is that the
company actively manages and controls these cash inflows and outflows. it is the
timing of these money flows which can be vital to the success, or otherwise of
business life.
II.1.1 Cash Inflows
Inflow covers all the ways the business brings in cash or gets paid. For
example, cash, sales, collection of payments due and return on investment make
up cash inflow. It is extremely rare that a small business is resting on substantial
cash reserves; therefore, focusing on how to constantly bring more cash in the
door should be a top priority for any small business owner. ((CIMA), 2001)
Inflows are the movement of money into business. Inflows are most likely
from the:
• receipt of money from the sale of goods/services to customers;
• receipt of money on customer accounts outstanding;
• proceeds from a bank loan;
10
• interest received on investments;
• investment by shareholders in the company.
II.1.2 Cash Outflow
Outflow covers all the ways the business spends cash. This includes
everything from buying inventory and office equipment to paying employees and
taxes. When the company consider all the ways cash can leave the business, it
seems daunting to try to keep the costs down. The important thing to keep in mind
is that, for business to be successful, cash in must always exceed cash out.
((CIMA), 2001)
Outflows are the movement of money out of business. Outflows are most
likely from:
• purchasing finished goods for re-sale;
• purchasing raw materials and other components needed for the
manufacturing of the final product;
• paying salaries and wages and other operating expenses;
• purchasing fixed assets;
• paying principal and interest on loans;
• paying taxes.
II.2 Cash Flow Management
Cash flow management is vital to the health of business. Hopefully, each
time through the cycle, a little more money is put back into the business than
flows out. But not necessarily, and if the company do not carefully monitor of
11
cash flow, and take corrective action when necessary, company business may find
itself sinking into trouble. Cash outflows and cash inflows seldom seem to occur
together. More often than not, cash inflows seem to lag behind cash outflows,
leaving the business short. ((CIMA), 2001)
This money shortage is company cash flow gap. Managing company’s
cash flow allows the company to narrow or completely close the cash-flow gap
and the company do this by examining the different items that affect the cash flow
of the company business.
The most important aspect of cash flow management is avoiding extended
cash shortages, caused by having too great gap between cash inflows and
outflows. The cash flow management is to develop and use strategies that will
maintain an adequate cash flow for company business. One of the most useful
strategies is to shorten cash flow conversion period so that the business can bring
in money faster.
II.3 Definition of Inventory
Definition of inventory according to some well-known figures:
a. Donald W. Fogart, John H.Blackstone, and Thomas R. Hoffman
(1991) Write, “inventory includes all those goods and materials that
are used in the production and distribution processes,” ( p-156)
b. Lyman A. Keith (1980) defined inventory as follows, “inventory is
stagnant investment until sold and every firm should attempt to
12
minimize its inventory investment in such a way that relations with
customer are not impaired”. (p-377)
c. Holy Icun Yunarto and Martinus Getty Santika ( 2005) Defined
inventory as follows, “Inventory adalah item atau materials yang
dipakai oleh suatu organisasi atau perusahaan untuk menjalankan
bisnisnya”. (p-1)
The Term Inventories is used to designate (1) merchandise held for sale in
the normal course of business, and (2) materials in the process of production or
held for such use (Warren & Fess, 1986).
Inventories are assets which are held for sale in the ordinary course of
business, in the process of production for such sale or in the form of materials or
supplies to be consumed in the production process or in the rendering of services
or the stock of any item or resource used in an organization. An inventory system
is the set of policies and controls that monitor levels of inventory and determine
what level should be maintained, when stock is replenished, and how large order
should be. Inventory consist of the raw materials, work-in-process goods and
completely finished goods that are considered to be the portion of a business's
asset those are ready or will be ready for sale.
Ryerson stated that Inventory describes the extra merchandise or supplies
business keeps on hand meeting the demands of customers. An excessive amount
of inventory hurts cash flow by using up money that could be used for other cash
outflows. Inventory management forecasts and strategies, such as a just-in-time
inventory system, can help minimize inventory costs because goods are created or
13
received as inventory only when needed. Inventories typically represent the
largest current asset of manufacturing and retail firms. Inventory should be
considered a high-risk asset. (Ryerson, 1998).
II.4 Inventory Management
II.4.1 Definition of Inventory management
Inventory is all the items or resources that are used in the company’s
business processes. Inventory is an important asset for the company to run its
operations. Inventories may include raw materials, auxiliary materials, goods in
process, finished goods, or spare parts. In general, there are no companies that
operate without inventories. Therefore, company needs an appropriate inventory
management to manage its inventory.
Inventory management is concerned with managing inventory costs. Three
types of inventory costs can be readily identified with inventory: (1) the costs of
acquiring inventory (other than the costs of the good itself, (2) the costs of holding
inventory, and (3) the cost of not having inventory on hand when needed (Guan,
Hansen, & Mowen, 2009).
For a business enterprise that needs large quantities of inventory to meet
sales order or production requirements, inventory is one of its most important
assets. The lack of sufficient inventory can result in lost sales, idle production
facilities, production bottleneck, and additional purchasing costs due to placing
special orders or rush orders (Warren & Fess, 1986).
14
Inventory management is the process of tracking the size and scope of
products. In everyday terms, it’s the thinking and organization surrounding how
much inventory and where it is. The overseeing and controlling of the ordering,
storage and use of components that a company will use in the production of the
items it will sell as well as the overseeing and controlling of quantities of finished
products for sale. A business's inventory is one of its major assets and represents
an investment that is tied up until the item is sold or used in the production of an
item that is sold. It also costs money to store, track and insure inventory.
Inventories that are mismanaged can create significant financial problems for a
business, whether the mismanagement results in an inventory glut or an inventory
shortage.
II.4.1.1 Economic Order Quantity
The optimum quantity of inventory to be ordered at one time is termed the
Economic Order Quantity (EOQ). Important factor to be considered in
determining the optimum quantity are the cost involved in processing an order for
the materials and the cost involved in storing the materials. (Warren & Fess,
1986).
The annual cost of processing orders for a specified material (cost of
placing orders, verifying invoices, processing payment, etc) increase the number
of orders placed increases. On the other hand, the annual cost of storing of the
materials (taxes, insurance, occupancy of storage space, etc) decreases the number
of orders placed increases. The economic order quantity is therefore that quantity
that will minimize the combined annual costs of ordering and storing materials.
15
The different formulas have been developed for the calculation of
economic order quantity (EOQ). The following formula is usually used for the
calculation of EOQ.
EOQ = �2 ×𝐴×𝐶𝑝𝐶ℎ
• A = Demand for the Month
• Cp = Cost to place a single order
• Ch = Cost to hold one unit inventory for a Month
In an EOQ model, either fairly constant demand must exist or safety stock
must keep providing for demand variability. The EOQ model uses an estimate of
total annual demand, the setup of order cost, and annual holding cost (Chase,
Jacobs, & Aquilano, 2006).
II.4.1.2 Analysis Inventory Control
Inventory control that runs by a company has certain goals. Inventory
control that carried out by a company usually has goals in order to achieve a
balance between the losses and saving from holding a particular stock levels and
how much it cost to conduct the inventory. Reeve, Warren, Duchac stated two
primary objectives of control over inventory are safeguarding the inventory from
damage or theft, and reporting inventory in the financial statement (Reeve,
Warren, & Duchac, 2009).
16
The details of inventory control purposes can be expressed as an effort to:
1. To keep the company from running out of inventory so that could result a
cessation of production activities
2. To keep forming of the inventory by the company was not too large or
excessive
3. To keep the company from small purchases in order to avoiding the large
fees.
Thereby, it can be concluded that the goal of inventory control is to obtain the
quality and quantity of available materials or goods at the time required ad at
optimal levels, so that production can be run smoothly and inventory costs
become minimal.
II.4.1.3 Reorder Point
Reorder point is inventory control to start the procurement of ordering.
Reorder point model occurs when the amount of inventory that contains in the
stock is always reduced, the company must be determines the minimum level of
inventory that must be considered and there is no deficiency of inventory. The
expected number is calculated during the lead time, it can also be added to the
safety stock which usually refers to the probability of deficiency of stock during
the lead time.
Reorder point also known as the limit or point of amount to be reordered
including demand that is wanted or required during the lead time, such as an
additional or extra stock. Beside the lead time is also other factor that determine
17
reorder point, and the factor is safety stock. Safety stock is inventory backup that
should be available to avoid of the goods, especially when waiting the goods
being ordered. The purpose of safety stock is to determine how much stock
needed during the lead time to fulfill the large demand.
The large amount allocated for safety stock will make the larger costs
needed and vice versa. Therefore, a manager who in charge of the inventory
should be considered carefully and meticulously the costs incurred for storage
comparable with risk of loss caused by the running out the supplies.
II.5 Operating Activities
Operating activities is the activities involved in earning revenues for
example, including marketing and administration. In the statement cash flow the
operating activities section identifies the cash flow involved with these activities
by focusing on net income and the changes in the current assets and current
liabilities.
The duration of time required to complete the following sequence of
events, in case of manufacturing firm, is called the operating cycle:
1. Conversion of cash into raw materials.
2. Conversion of raw materials into work-in-progress.
3. Conversion of work in process into finished goods.
4. Conversion of finished goods into debtors and bills receivables
through sales.
5. Conversion of debtors and bills receivables into cash.
18
The length of cycle will depend on the nature of business. Non manufacturing
concerns, service concerns and financial concerns will not have raw material and
work-in-process so their cycle will be shorter. Financial Concerns have a shortest
operating cycle.
Figure 1 operation cycle
II.6 Working Capital
Krishna G. Palepu and Paul M. Healy stated that working capital is
defined as the difference between a firm’s current assets and current liabilities.
However, this definition does not distinguish between operating components
(such as account receivable, inventory, and account payable) and financing
component (such as cash, marketable securities, and notes payable) (p.5-12).
The working capital plays the same role in the business as the role of heart
in human body. Working capital funds are generated and these funds are
19
circulated in the business. As and when this circulation stops, the business
becomes lifeless. It is because of this reason that the working capital is known as
the circulating capital as it circulates in the business just like blood in the human
body.” (Agarwal)
Numerous factors can influence the size and need of working capital in a
concern. So no set rule or formula can be framed. It is rightly observed that,
“There is no precise way to determine the exact amount of gross or net working
capital for every enterprise. The data and problem of each company should be
analyzed to determine the amount of working capital.
Briefly, the optimum level of current assets depends upon following
determinants.
Nature of business, Trading and industrial concerns require more funds for
working capital. Concerns engaged in public utility services need less working
capital. For example, if a concern is engaged in electric supply, it will need less
current assets, firstly due to cash nature of the transactions and secondly due to
sale of services. However, it will invest more in fixed assets.
In addition to it, the investment varies concern to concern, depending upon
the size of business, the nature of the product, and the production technique.
Conditions of supply, if the supply of inventory is prompt and adequate, less
funds will be needed. But, if the supply is seasonal or unpredictable, more funds
will be invested in inventory. Investment in working capital will fluctuate in case
of seasonal nature of supply of raw materials, spare parts and stores.
Production policy, in case of seasonal fluctuations in sales, production will
fluctuate accordingly and ultimately requirement of working capital will also
20
fluctuate. However, sales division may follow a policy of off-season discount, so
that sales and production can be distributed smoothly throughout the year and
sharp, variation working capital requirement are avoided.
Seasonal Operations, it is not always possible to shift the burden of
production and sales to slack period. For smooth running an enterprise, adequate
amount of working capital is very essential. Efficiency in this area can help, to
utilize fixed assets gainfully, to assure the firm’s long-term success and to achieve
the overall goal of maximization fund. Shortage or bad management of cash may
result in loss of cash discount and loss of reputation due to non-payment of
obligation on due dates. Insufficient inventories may be the main cause of
production held up and it may compel the enterprises to purchase raw materials at
unfavourable rates.
Funds are needed in every business for carrying on day-to-day operations.
Working capital funds are regarded as the life blood of a business firm. A firm can
exist and survive without making profit but cannot survive without working
capital funds. If a firm is not earning profit it may be termed as ‘sick’, but, not
having working capital may cause its bankruptcy working capital in order to
survive. The alternatives are not pleasant. Bankruptcy is one alternative. Being
acquired on unfavourable term as another. Thus, each firm must decide how to
balance the amount of working capital it holds, against the risk of failure.
II.7 Inventory Turnover
The relationship between the volume of goods sold and inventory may be
stated as inventory turnover. It is computed by dividing the cost of goods sold by
the average inventory. If monthly data are not available, it is necessary to use the
21
average of the inventories at the beginning and the end of the year (Warren &
Fess, 1986). The improvement in the turnover resulted from an increase in the
cost of goods sold, combined with a decrease in average inventory.
Inventory turnover measures the number of times on average the inventory
is sold during the period. Its purpose is to measure the liquidity of the inventory.
The inventory turnover is computed by dividing cost of goods sold by the average
inventory during the period. Unless seasonal factors are significant, average
inventory can be computed from the beginning and inventory balances.
To create a more meaningful ratio it is advised to create the ratio based on
inventory type. Also this ratio represents an average of all inventories and does
not reflect the turnover rate for individual items. The value of this ratio will
significantly change based on the industry so only comparisons by like companies
will have any meaning. To calculate inventory turnover:
Inventory turnover = cost of goods sold /average inventory
Some computational side notes:
This ratio can be influenced based on the inventory costing method used
by the company. This will influence the comparison even to like type companies
if the companies being compared are using different inventory costing method.
II. 8 Cash Conversion Cycle
The flow of cash is vital to all companies and maximizing inflows while
minimizing outflows can increase overall operating efficiency, and ultimately
increase profitability. The elapsed time between the purchase of inventory items
22
and the collection of cash resulting from its sale is known as the cash conversion
cycle. When decision is made to purchase inventory, cash outlays are required to
pay for the request items.
Figure 2 Cash conversion Cycle
From figure 2 in conversion the purchases into revenue collection need
some steps. From this can see that there several consideration like days of sales,
payable, and inventory itself in outstanding term. Once the inventory is received,
it is placed on the shelves until it is needed for prescription orders, which
represents a use of cash. The cash conversion is completed when the cash
payment is received by the company.
The matching of inflows and outflows with regard to inventory and
accounts receivable is vital to all companies, because the cash needs of the
company resulting from the differences between these two processes must be
funded from other sources. If additional borrowing is required by the company,
the associated finance costs will reduce the profitability of the company.
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II.9 Receivable
The term receivables include all money claims against people,
organizations, or other debtors. Receivable are acquired by business enterprise in
various kind of transactions, the most common being the sale of merchandise or
service on a credit basis (Warren & Fess, 1986). The term receivable refers to
amount due from individuals and other companies. Receivables are claims that are
expected to be collected in cash. They are frequently classified as (1) account
receivable, (2) notes receivable, and (3) other receivables (Weygandt, Kimmel, &
Kieso, 2011).
Account receivables are amount owed by customer on account. They
result from the sale of goods and services. Companies generally expect to collect
these receivables within 30 to 60 days. Account receivables are the most
significant claim held by a company. Notes receivables are claim for which formal
instrument of credit are issued as proof of debts. A note receivable normally
extends for time period of 60-90 days or longer and requires the debtor to pay
interest. Notes and account receivable that result from sales transaction are often
called trade receivables. Other receivables include non-trade receivables.
Examples are interest receivable, loans to company officers, advances to
employees, and income taxes refundable. These do not generally result from
operations of business. Therefore companies generally classify and report them as
separate items in the statement of financial position.
24
CHAPTER III
DATA PROCESSING METHOD
AND COMPANY’S EXISTING CONDITION
III.1 Data Collecting and Processing
Basically, to get the data of the company’s business processes according to
their inventory cycle, management of inventory towards the management of cash
flow, the reseacher use some methods which are inquiry of the client, observation,
and documentation of data of company’s business.
The researcher will use qualitative research for preparing the thesis.
Qualitative research is a descriptive research and likely to use inductive analysis
approach. The research findings that obtained from variety of data collected. The
researcher will obtain and collect the data from literature review and field
research.
Data source that used in this thesis were obtained from two sources, as
follows:
1. Primary data, i.e. data obtained directly from the object of research, by
doing inquiries the company.
2. Secondary data, i.e. data obtained from various sources, both from the
documents and literature review that support the research. The documents
that the researcher use for this research using the monthly report of
25
operation process, lists of receivables, vouchers, purchase order, monthly
income statement, and report of production result.
III.1.1 Literature Review
In preparing this thesis the researcher does literature reviews and read
other data sources related to the issues discussed to enhance and complement the
topic discussion. The aim is to obtain secondary data that can be used as the basis
in preparing thesis, and to give more reference and theory for this research.
III.1.2 Field Research
In preparing the thesis, the researcher also conducted survey and direct
research to the company to get the necessary data and to identify the actual
condition and company circumstances. All data of field research is collected and
processed through some procedures such are as follows:
III.1.2.1 Inquiry of the client
Inquiry is to seek information from knowledge person, either verbally, or
in writing. It is far more efficient to obtain explanations through inquiry and then
seek to validate these explanations than to try to find explanations by sifting
through large quantities of detail evidence. Researcher inquires the company’s
personnel through oral questions.
Mostly, to get all data of the company’s business regarding the research of
all aspect of inventory of the company affecting the management of cash flow
generally. The researcher do interview and discussion with process owner, the
person who understanding about the business process of the company. all
26
information and data that the researcher got during the interview will be
documented in to a minutes of meeting that will be reconfirmed to the process
owner to make sure that the business process stated in the minutes of meeting is
the current one.
The process inquiry in the company is conducting the interview with some
of company person who directly involve in inventory process and management of
cash inflows and outflows in the company. The person Such as the owner of
company who well-known about the nature of company, interviewing several staff
and labor that doing the operation process.
III.1.2.2 Observation
Observation consists of looking for at a process or procedure being
performed by others in order to understand: who performs the process, when there
is tangible audit trail. This method has some weaknesses, for example people tend
to behave differently when they know that they are being observed. The
researcher conducted review the document of the company related the objective of
research and direct observed to the company to get the overview of production
process of inventory or inventory process which is still in process or ready to sale,
and also regarding the management process of inventory or product of the
company.
III.1.2.3 Documentation
Documentation is the process of tracking down the evidences either internal
or external evidences of transaction or activities being research. The researcher
27
read through company’s organization structure, documents related to management
and cycle of inventory that effects on the management cash flow of the business
of the company.
The researcher is using several of document of company such are voucher
of cash out to know what for the cash is using, monthly operational report that
reports about the summary purchasing of raw material and the amount of sales of
product, report of production that give information about the amount of product
that ready to deliver to customers, and summary of receivable in every month of
the company to know how much the receivable is collecting. To knowing process
of production, the recording process of employee attendance, storage condition,
application of certain procedure, and organization or working environment. The
researcher learns and do research the company’s documents relating the inventory
management and cash flows management of company to obtain the data needed to
prepare this thesis.
III.2 Company’s Existing Condition
The company being researched located in Bogor, West Java. This
company is running for the fourth year since 2010. The company existing
condition will brief are as follows:
III.2.1 Company’s Profile
PT Umbul Rasaki was building in 2010 with the central of business in
Cikarang Bekasi, West Java. This company has been legally build based on the
Keputusan Menteri Hukum dan Hak Azasi Manusia Republik Indonesia No:
AHU-27232.AH.01.01.Tahun 2010, since 30 March 2010. The form of company
28
is entrepreneurship or private company (Home Industry). And this company also
already registered in Indonesia Tax Officer No: PEM-
00932/WPJ.22/KP.0203/2010. And this company has branch in Bogor, West Java
in continuing the production. This branch of company as production area of
product is located in Kampung Jero Rante No.04 RT.04 RW.04 Desa Bendungan
Kecamatan Ciawi Bogor, West Java-Indonesia.
Figure 3 Logo of PT. UMBUL RASAKI
PT. Umbul Rasaki is middle size company which running the business in
supplying the food product (Home Industry). This company has been running as
private company for three years, since it was building in 2010. PT. Umbul Rasaki
was formed as entrepreneurship form. And Now transformed as PT. Umbul
Rasaki as food Producer and Supplier for Japanese Restaurant. PT. Umbul Rasaki
sells the product for domestic customer. The founder of PT. Umbul Rasaki starts
this business from beginning until now by himself with his own capital.
29
Nowadays, in Indonesia especially Jakarta area can easily to find so many
Japanese Restaurant. The founder look at the opportunities for this business is big
enough because the demand of this kind of product especially for restaurant which
serves Japanese Food. And the founder making relationship with owner of
Japanese Restaurant and promotes the product shop to marketing and selling its
product.
PT. Umbul Rasaki producing the product from the raw material and sells
the product by itself. This company also doing production and packaging before
the product sells to the customer. The product that produced by PT. Umbul Rasaki
just one type of product that is called “Unagi kabayaki”, that producing from
“Moa (eel)” or in Japanese language it’s called “Unagi”. This kind of food has big
marketing opportunity in selling to Japanese Restaurant. But PT. Umbul Rasaki
also sells the fish that still alive to customer who wants fresh Unagi.
Production process of PT. Umbul Rasaki is located in Ciawi, Bogor West
Java. The fresh fish or the raw materials are getting from fish farmer from local
area such as Cilacap, Central Java or outside of Java Island such are Sulawesi
Island and Bengkulu (Sumatera Island). In fulfilling the stock of raw material or
Unagi Fish for production process the PT. Umbul Rasaki get it from the Fish
Collectors. The fish collector is the person who collects the Unagi fish from small
fisherman.
Because of the demand of kabayaki was increase at the first selling time
from the customer, PT. Umbul Rasaki confident to increase the production and
make more customers. Almost the customers of PT. Umbul Rasaki buy the
30
product in finish goods rather that the fresh fish. Because almost of them is
Japanese restaurant fast foods. PT Umbul Rasaki already has some permanent
customer from Jakarta who always order Unagi Kabayaki product in big amount.
Because of PT. Umbul Rasaki still in middle size company, it is just supplying the
product in Jakarta area. And PT. Umbul Rasaki also has next target to make
export to abroad such as Japan. But now PT. Umbul Rasaki just focus in spread it
marketing in domestic area.
a. Organization Structure
PT. Umbul Rasaki has been formed for three years ago. It already has
organization structure even it is still in simple one format. PT. Umbul Rasaki as
middle size company or home industry legally formed since 2010. The
organization of PT. Umbul Rasaki as follows:
Organization Chart of PT. UMBUL RASAKI
Figure 4 Organization Chart
31
PT. Umbul Rasaki has fourteen staffs, consist of manager, accounting staff,
administration staff, marketing staff, machine operators, and labor. Manager has
directly controlling and handling the operation that conducted by all staff of PT.
Umbul Rasaki on the operation day. Manager is also directly controlling the
administration and accounting process. The accounting staff reports all
transactions and processes of company into accounting language. Administration
staff records the administrative transaction and marketing staff not only promotes
the product together with the owner but also marketing staff is also the person
who is delivering the product to customers.
The last is production team that consists of several laborers and machine
operator who cooperate when doing the production process. The production team
is the big part of this business because this team producing the product that will
sells to the customers. Before the laborers can do the production team they getting
directly trained by the owner how to do the production process of product and the
work instruction steps. In supporting the operation and production process, as
home industry PT. Umbul Rasaki has six pools to stock the raw materials for
production, one freezer, one vacuum machine, weight scales, and production
equipment (cutting equipment).
Figure 5 Sketch of Pools/Basin
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III.2.2 Inventory Existence
The existence of inventory for company is one of the crucial factors to
continuing the business life. In running the business life, the company must be
concern towards its inventory. Because of the product of PT. Umbul Rasaki has
non-stock inventory, so PT. Umbul Rasaki has production line that it is called
one-time cycle of production. Because inventory must be moving from receiving
raw material, directly going into production process and the last arrived in
customer hands. For the brief that involve in company operation of PT. Umbul
Rasaki that related to existence of inventory, are as follows:
The raw material of product is Moa Fish, Unagi (Japanese), Sidat (Bahasa).
Moa (eel) is anguillidae Familly, Ordo Apodes Species. Nowadays, in Indonesia
water areas have at least five types of Sidat , such are: angillidae Encentralis, S.
Bicolor bicolor, A. Borneosis, A. Sidat or Unagi is carnivore, because it eats
several kind of small animals especially larva organism such are crustacean
(shrimp and crab), polichaeta (worm).
Figure 6 Moa (eel) (Sidat or Unagi)
33
Bicolor Pacifika, and A. Celebensis. Sidat or Unagi live in insipid water
(river and lake) until become adult fish. Then it is going to deeper sea to
reproduction, and the seeds of fish (Glass Eel) will take along to river. Sidat or
Unagi has been cultivated intensively In European especially in Norwegian,
Germany, and Netherland. And also in Asia such are Japan, Taiwan, and China. In
Indonesia still depend on the fishermen who harvested it from river or lake.
Because of the Indonesian weather is constant Sidat or Unagi fish can cultivates
indoor or outdoor.
Figure 7 Pools or Basin
PT. Umbul Rasaki has pools for temporary collecting place for the fish before
continuing into production process. Kabayaki is kind of Japanese food as the main
inventory of PT Umbul Rasaki. It is sells to Japanese Restaurant in Jakarta. There
are three sizes of product that produce by PT. Umbul Rasaki such are less than
100 gram, 100 - 200 gram, 200 - up gram. The sizes of product depend on
customer order. Unagi Kabayaki is one of the kinds of ready to consume.
34
Figure 8 the Product “Unagi Kabayaki”
The purchasing process of PT. Umbul Rasaki is the first step of its operation
process in producing the product. The purchasing flow of PT Umbul Rasaki is
having the permanent supplier of raw material for production the product. PT.
Umbul Rasaki always get the raw material from fish collector who collecting fish
from fishermen.
Figure 9 Purchasing process
35
Fishermen sells the fish to the collector by the collective amount of fish, then
the small collector sells them to the Big fish collector hand and finally fish arrives
in PT. Umbul Rasaki. The size of fish that needs for production is 200 gram – up.
Because the inventory of this kind of food business has expired date able to
consume by customers and risk of dead fish for raw material, receiving from the
supplier the raw material of inventory directly sends to production team to
processing the inventory. Receiving process is through the simple process like the
inventory send by supplier to PT. Umbul Rasaki or directly take from supplier
place. After the inventory receives from supplier, the fish will placed in temporary
pools. Before the fish send to production the inventory must be separates based
the size of fish.
In PT. Umbul Rasaki storage process is in simple way, after the production
process finish the inventory of kabayaki directly put in freezer. The inventory in
freezer just for several days, because the inventory that already ordered by the
customer. The storage of inventory in PT. Umbul Rasaki not for a long time it
must be sells as soon as possible. The storage process of kabayaki just in simple
way, the finish product from production directly put in freezer before send it to
customer hands. In ordering the inventory for production PT. Umbul Rasaki often
gets supply the raw material from its supplier in Cilacap, West Java.
PT. Umbul Rasaki selling process of inventory based on the customer order.
Some of customer of PT. Umbul Rasaki has been order in advance, the customer
order the product for certain amount in one month. PT. Umbul Rasaki will
producing the Unagi Kabayaki to fulfill the amount that already orders by
customer for example the customer order for 200 kg Unagi kabayaki for one
36
month. PT. Umbul Rasaki will send the product to customer in several times until
the amount of customer order. This company sells the product directly to its
customer by itself and make sure the product arrives in customer hand. The next
target market of PT. Umbul Rasaki is to export its product to overseas market,
especially export to Japan.
37
CHAPTER IV
ANALYSIS AND EVALUATION
This chapter will discuss about the analysis and evaluate the management
and performance of inventory process at PT. Umbul Rasaki that effects the
management of cash flows. The inventory ready to sale is one of the important
components of company in continuing the business life. In home industry
especially food product, the company consider the time in converting inventory
into cash is very important. The management has responsibility to plan, buy and
maximize the flow of cash to fulfilling the inventory needed for production. It is
necessary because the fund of raw materials for produces inventory in company
does not always match the timing of cash receive from customer.
And the discussion about the inventory process, management of cash
flows, and the effects of inventory to the management of inflows and outflows of
cash at PT. Umbul Rasaki, by the following steps are as follows:
IV.1 The objectives and the scope of analysis
VI.2 Conducting the analysis and evaluation
VI.2.1 Preliminary Survey
VI.2.2 Testing and evaluation on management of inventory
VI.2.3 Testing and Evaluation on management of cash flows
VI.2.4 Analysis the effect of inventory towards the cash in and cash out
38
IV.1 The Objectives and scope of the evaluation
Before the analysis and evaluation inventory management at PT. Umbul
Rasaki, the researcher determines the objectives to be achieved. After the
objectives are set, then the researcher makes the analysis and evaluation process
procedures in order to achieve those objectives.
The objectives that the researcher wants to achieve from this thesis are:
1. To analyze how the effect of inventory cycle on the management cash
flow of PT. Umbul Rasaki
2. To identify the factors that caused inventory cycle problem of PT. umbul
Rasaki that will affect the management cash flows
3. To identify how to minimize the problem in the inventory cycle and get
the alternative solution.
The scope of analysis and evaluation is the affects of the inventory toward the
management cash flows at PT. Umbul Rasaki. Observation of cycle inventory
management at PT. Umbul Rasaki will focus on the inventory planning of raw
materials, movement of inventory from supplier, and timing in selling out the
Product. And management flow of cash will focus timing in converting the
inventory (Product) into cash, and inflows and outflows of cash in supplying the
inventory (raw material) for operation process.
The analysis of inventory affects towards the management inventory will
focus on aspects of movement of inventory that involve cash, the planning of
inventory supply, cash inflows and cash outflows in getting the inventory. The
analysis of inventory affects on management cash flow is conducted to know and
determine whether the result of activities undertaken by company is supported by
39
a reasonable standard, thus ensuring the management process of company will
continuing and improving the business of the company.
IV.2 Conducting the analysis and evaluation
IV.2.1 Preliminary Survey
Preliminary survey that conducted by the researcher consists of:
a. Inquiries of the client
Conducting interviews with management personnel and staff of
the company who involved with the inventory management process
and management of cash inflows and cash outflows of the company,
such as the owner of the company, accounting staff, and production
staff by random interviews.
b. Observation
The researcher also observed directly in PT. Umbul Rasaki.
Observing the process production activities and over viewing of
company circumstances regarding to the inventory process affects on
management of cash inflows and cash outflows.
c. Documentation
The researcher learns some documents related to the inventory
management of Unagi Kabayaki (product), such lists of purchase
order of product from customers, stock card of inventory, voucher of
cash out, invoices, and etc.
40
The planning and management of inventory at PT. Umbul Rasaki run and
directly handled by the owner of PT. Umbul Rasaki. Because of PT. Umbul
Rasaki is a home Industry business, the process of inventory movement is directly
process starts from purchase the raw material, placement of raw materials,
conduct the production process, and sells the product (Unagi Kabayaki) to the
customer. All processes are conduct in one time process, except the selling and
product shipment to the customer. The divisions who involves in this process are
the owner of PT. Umbul Rasaki and production team.
VI.2.2 Testing and Evaluation on management of inventory
From the preliminary survey at PT. Umbul Rasaki, the researcher gets
information about the process of supplying the raw materials for inventory
process, production process, and flow of inventory from one team to another
team.
For the general information about management of inventory at PT. Umbul
Rasaki the researcher obtains the following information about ordering and
supplying the raw materials of product. The operation of the company is
production process started from purchasing the raw materials of products,
production process, packaging, storage, until selling the product PT. Umbul
Rasaki directly conducting and controlling by the owner. Because of PT. Umbul
Rasaki still middle size company, the purchasing of raw materials, offering to new
customer, and selling the product still doing by the owner. And production
process handling by staff and labor.
41
The production process is still directly monitoring by the owner for every
production process. There is no person in charge for monitoring the production
process so, for supplying process of inventory at PT. Umbul Rasaki starts from
ordering process of raw materials for continuing to the next operation process. PT.
Umbul Rasaki is home industry, the operation of production process already
conducts with work instruction has been checking by the BPOM Healthy
department of Indonesia. This product is made without foods preservatives. So, it
is a good and health foods with many nutrients content. The flowing of inventory
at PT. Umbul Rasaki starts from raw materials until finish goods is follows:
a. Raw Material Ordering Process
Ordering process is process of order to procure the raw material that will use
in production process. This process is transaction to purchase something that
involves two or more parties.
b. Production
Production is the action of making or manufacturing from component of raw
materials, or the process of being so manufactured. Or the processes and method
used to transform tangible inputs (raw materials, semi-finished goods,
subassemblies) and intangible inputs (ideas, information, knowledge) into goods
or products.
c. Storage
Storage is a process that held the inventory or product for a several times
before the sending the product to customer. It is to keep the product in good
condition and still good to consume by the customer.
42
d. Delivery process
Delivery is a sending process of the products to the customer. Where the
product is move from the seller to the buyer.
IV.2.2.1 Raw Material Ordering process at PT. Umbul Rasaki
Ordering process of raw material at PT. Umbul Rasaki is processing when the
fish collector give information there is stock of fresh Sidat or Unagi. The PT.
Umbul Rasaki makes order of raw material for production process. PT. Umbul
Rasaki just want to buy sidat or Unagi with the size 200 gram to up. And if the
both of party are deal with price, the supplier will deliver Sidat or Unagi to PT.
Umbul Rasaki.
The finding regarding the management of inventory as follow:
In PT. Umbul Rasaki case, it is not really the right method to manage its
inventory because the inventory or product of PT. Umbul Rasaki has several
factors they are Unagi Kabayaki is food product, it has expired date because it is
not use the food preservative, there is a product damage risk, if the product is not
sell the company will get loss. So, PT. Umbul Rasaki does the purchase and
production to fulfill the order lists from customer in every month. If the inventory
cannot fulfill the amount of customer order, PT. Umbul Rasaki will order more
raw materials from other supplier. In one month PT. Umbul Rasaki can conducts
Unagi kabayaki for 4-5 times production. If after the production is finish and the
amount still not enough for order lists, PT. Umbul Rasaki will purchase the raw
material from the supplier. Sometime the supplier offers the Sidat or Unagi to PT.
Umbul Rasaki, it will consider under two conditions. First, If PT. Umbul Rasaki
thinks still needed for production process; it will buy the raw material, second if it
43
is not PT. Umbul Rasaki will postpone to purchases the raw material for a short
period of time or until the current production is finish.
Figure 10 schema of purchasing process
From the schema, the researcher gets information where the raw material
comes from. PT. Umbul Rasaki directly get the raw materials from the fish
collectors. From this information can give information that PT. Umbul Rasaki
does not make its own cultivation place yet. It is still depends on the result of
harvest time by the fishermen.
The weakness of the inventory process or providing the raw material at PT.
Umbul Rasaki does not use the reorder point method. And PT. Umbul Rasaki
does not keep so many amounts of products because of the risks of loss. And PT.
Umbul Rasaki will order again if the production do not catch up the amount in
customer order lists. It is not considered as reorder point. And PT. Umbul Rasaki
does not use the Economic Order Quantity as a method in inventory process,
because of the reason above that the condition of foods. But in purchasing process
44
also it does not use because of the random purchasing based on the harvest time of
Sidat. In PT. Umbul Rasaki there is no what it is called as safety stock that
considered in Economic Order Quantity Method and Reorder Point to minimize
the costs.
IV.2.2.2 Production Process at PT. Umbul Rasaki
The production process of product at PT. Umbul Rasaki doing by
production team is follow:
Figure 11 Production process
In production process there are several duties that held by production
team, such are proses pemotongan dan pembersihan Sidat (Unagi), proses
pemanggangan, proses pengolesan saus, proses pengemasan produk dan
45
pemberian label. Production people divided into several teams that held each
activity in production process. Proses pemotongan dan pembersihan sidat (Unagi)
is process cutting and cleaning held by 2-3 people their duty is cutting sidat’s head
and separate the bone from meat, and cleaning Sidat meat before go to roasting
process. Proses pemanggangan is held by 2 (two) people who handle the roasting
process and it roasts for 10-15 minutes. Proses Pengolesan saus is held by 2 (two)
people, the meat has cooked directly send to this people to saucing. Before
saucing process cleaning process of the smooth bone from cooked meat must be
done, then saucing is processing. Proses Pengemasan produk dan pemberian
label is held by two people sometime this process also done by the people in
saucing process. This process is putting process the meat into plastic, weighted the
meat, and separate it based on the weight of product, vacuums the products, then
labeling the products. After all process is done, then the products storage in
freezer before sends it to customers.
In operation inventory process at PT. Umbul Rasaki, there are several
activities that must be done to produces the product. All activities are the steps at
PT. Umbul Rasaki processing all in row. Start from orders the raw material to
supplier (Sidat or Unagi) until packaging the product. Generally information
regarding the supplying of inventory management at PT. Umbul rasaki, the
researcher obtains the following the information:
Process of inventory at PT. Umbul Rasaki is through the production process
of kabayaki. Because of PT. Umbul Rasaki is home industry which is producing
the food product that has expired date to consume and kabayaki do not use the
46
food preservative. So, kabayaki has limited time to consumes, and PT. Umbul
Rasaki tries to sell all inventories or product in the storage.
In one month PT. Umbul Rasaki can produces 300 kg-500 kg of kabayaki,
which has been order by the customers (in harvest time for September until
March). For the permanent customer who order every month, PT. Umbul Rasaki
must be fill up the amount of kabayaki for 400 kg of order lists and also the rest
for other customers. The customer of PT. Umbul Rasaki is food supplier in large
party. PT. Umbul Rasaki in getting the raw material based on Sidat or Unagi
seasonal harvest time, so there are some of month in a year not harvest time. In
the unseasonal harvest of sidat or Unagi, PT. Umbul Rasaki just can produce an
half of harvest time.
The net weight of result from production is 58% - 59% (standard) from
weight of Sidat. Because there are several factor that reduce the weight of Sidat
such are cutting the sidat’s head, separate the bone from the meat, and reduce
from roasting process. So, for example: when PT. Umbul Rasaki buys the raw
material for 132 kg for one time production process and the result from
production is 77.88 kg net. This of Unagi kabayaki weight is after packaging
process is finish. The Unagi Kabayaki (product) is result from production process
directly go to storing process.
The finding regarding production activities as follow:
During the production some of labor did not wear the complete uniform that
must be wears all the time of production processing.
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IV.2.2.3 Storage Process at PT. Umbul Rasaki
Process of storing at PT. Umbul Rasaki is the simplest process of all process
because it just keeping the product in storage for a short time before it sends or
delivers to customers based the amount of in purchase order by the customer. The
process of storing of the product is held by the person in charge for storing who
has duty to make group of product based on the weight. The groups of product
are small size for weight under 120 grams, and big size for weight 145 grams to
up. After grouping process the product put in the freezer to keep the product in
good condition. The freezer can keep the amount of Unagi Kabayaki until 500 kg
capacity. This capacity is still enough for three times production. One day after
production finish, the controlling the storage is important to tidying the sauce of
product and change the position of Unagi Kabayaki upper side become under
side. It is in order to the sauce does not mess up. This Unagi Kabayaki keeps in
the freezer until delivery time to the customer. It does not take the time more than
two weeks. In selling process PT. Umbul Rasaki not selling the product to the
restaurant any more, But PT. Umbul Rasaki just sells its product to the Food
supplier (Food Distributor). The reason why PT. Umbul Rasaki not always sells
product directly to restaurant is to cut and minimize the costs in operation during
delivery time, it is just occasionally happens. If sells to the restaurant PT. Umbul
Rasaki must deliver the product in several time and the amount of order is not big
and they not always order the product it is make spend more costs than its profit.
So PT. Umbul Rasaki changes the strategy in selling its product directly to
distributor who buys in big amount in one order time. And delivery is just once or
twice in one order time.
48
Figure 12 Operation Flows PT Umbul Rasaki
49
VI.2.3 Testing and Evaluation on the management of cash flow
From preliminary survey, observation and documentation that has
conducted at PT. Umbul Rasaki. The research gets some data that show up how
PT. Umbul Rasaki manages their cash inflow from customers and cash outflow
for getting the raw material during the operation.
For the generally information about the management of cash inflows and
cash outflows that the researcher obtains the following information in which
happens during the operation at PT. Umbul Rasaki. The management of inflows
and outflows of cash during the operation especially fund or cash for supplying
the inventory for production process. During the operation at PT. Umbul Rasaki
there are some involving the cash inflows and outflows are purchasing the raw
material at PT. Umbul Rasaki, inventory turnover, receivable, working capital,
cash conversion cycle, and operating activities of PT. Umbul Rasaki.
The finding regarding management cash` flow at PT. Umbul Rasaki as
follows:
IV.2.3.1 Purchasing activity at PT. Umbul Rasaki does not have the fix
schedule.
PT. Umbul Rasaki does make the purchasing activities 4-5 times in one
month. This purchasing activity is in a random time depends on production need
and offering from the suppliers. From PT. Umbul Rasaki side will ask the supplier
for stock of Sidat that they have, and will purchase for the amount of raw
materials (Sidat) based on the amount of production needed.
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The supplier will send the Sidat in several times for example supplier will
send the Sidat in two or more delivery times. But also if there is offering the raw
material from supplier first, PT. Umbul Rasaki will take it with the limit amount.
Table 1 Summary of purchasing for one month
Because of this random schedule purchasing activity causes PT. Umbul
Rasaki must be manage carefully the cash or fund for purchasing the raw material.
This is one of the summaries of purchasing the raw material by PT. Umbul Rasaki
for one month in 2012. From this table give the information about how the
purchasing activities are happens at PT. Umbul Rasaki in 2012.
The weakness of random purchasing at PT. Umbul Rasaki is cannot make
exactly prediction when the purchasing time. This random purchasing time cause
by the amount of production needed, the capacity of production, stock of Sidat in
supplier place because of the harvest period. So, PT. Umbul Rasaki always take a
look of its cash and make prediction about the cash that will uses to purchasing
51
the raw material or Sidat. And the other one is the supplier must be paying the
supplier in cash because of the supplier get the raw materials from fishermen that
who just need in cash. So, every times PT. Umbul Rasaki buys or purchases the
raw materials (Sidat) PT. Umbul Rasaki just transfers the amount of money to the
supplier as much as the price.
IV.2.3.2 Inventory turnover of PT. Umbul Rasaki
Inventory of PT. Umbul Rasaki is in and out every month. Because they are
always produce the product to fulfill the customer order lists that already has.
Every month PT. Umbul Rasaki can produce 300 kg - 500 kg Unagi kabayaki for
its customers. In monthly report of the operation at PT. Umbul Rasaki reported
how many kilogram of Unagi Kabayaki they can produce. In average the selling
of products sold out in every month. The researcher uses the monthly report of
PT. Umbul Rasaki to calculate the inventory turnover every month. One of the
monthly income statement that reported by PT. Umbul Rasaki. Because of PT.
Umbul Rasaki is food home industry and still in middle size company, so the
inventory must be sold out during one month period. And the goods sold is
realized in every month, the cycle of inventory movement can see in every month
sale and cost of goods sold compare with the cost of inventory use in one month
operation.
Table 2 Summary of Sales in One Month
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Table 3 Inventory Turnover in six Months
INVENTORY TURNOVER = COGS/AVERAGE INVENTORY
Inventory Turnover in 6 Month =
389,385,000
51,880,000
= 7.505493446
Days in Inventory during 6 Months = 180 days
7.505493446
= 23.98243384 days in 6 Months
IV.2.3.3 Receivable and cash conversion cycle of PT. Umbul Rasaki
The cycle of collection of receivables of PT. Umbul Rasaki is good enough
and can support the next operation of production process. The collection of
receivables is always done at the end of the month and some of the customer use
to the cash payment. From collection of its receivables, the company can manage
the cash or fund for the next month operation especially production process
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Table 4 Summary of receivable for one month
But the problem of this collection is just can collects at the end of the month
while during the month production need to purchase the raw material at the
middle of month.
PT. Umbul Rasaki has cash conversion cycle is during one month operation,
happens every time cycle of operation is running. Cash conversion cycle at PT.
Umbul Rasaki is starts from the receiving the raw material for production process,
until the product is sells to customer. Almost of the product are already ordered by
the customer. Cash conversion cycle of PT. Umbul Rasaki realizes every month
because of the movement of inventory during the production and collection of
receivable from customer until the cash collects.
54
VI.2.3.4 The time of collection of receivable does not match with the time to
purchase the raw material
There is possibility can happens that postpone of time for receivable
collection from customer will delay the purchase the raw materials for the next
productions. There is a time where the collection of receivable does not match
with purchasing time when the supplier offering the raw material (Sidat). With
this situation PT. Umbul Rasaki cannot buy the raw material in large amount and
even postpone the purchasing time until several days. It can make PT. Umbul
Rasaki one chance to get the raw materials and manage its cash out and its fund to
buy the next material for production. The timing does not match because
sometimes PT. Umbul Rasaki does not get payment from customer yet at the
middle of the month or the fund for raw material is exceeding from the budget for
buying the raw material itself. So, PT. Umbul Rasaki buys the raw material with
the amount lower than usual.
Table 5 Receivable Turnover
55
Because of the receivable turn over just collects two times in every month
or we can say that PT. Umbul Rasaki can collecting the receivable in an half
month after the selling activities. This make the time the collecting receivable into
cash does not match with purchasing time which has doing for 4-5 times in one
month.
VI.2.4 Analysis the effect of inventory towards the management
cash in and cash out
This stage is the important stage in which the researcher reveals the result
of the testing and evaluation that has done. Continuing with analysis based on
management practices that should be implemented so that the company can
manage their inventory and cash inflow and outflow during the operation process.
Based on the Analysis and evaluation that conducted by the researcher on
the affects of inventory towards the management of cash inflows and outflows
during the operation at PT. Umbul Rasaki, can be summarized are as follows:
VI.2.4.1 Inventory process of raw material for production process at PT.
Umbul Rasaki influence the cash out during the month.
Based on the observation, documentation and inquiring that held by the
researcher, process stocking the inventory of raw material at PT. Umbul Rasaki
which is use for production does not use any method. The stocking process is
based on the amount of order lists from customer and also the offering the raw
materials (Sidat) from supplier. PT. Umbul Rasaki producing its product to
fulfilling the customer order lists, and will stocking the raw materials (Sidat) in
pools or basin before the production.
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The amount of cash that would be use cannot predict exactly cause of the
amount of raw material will buy from suppliers. It cannot predict how much the
raw material will offers by supplier during in one month period. Because of the
unpredictable can make the cash out during the month of production may excess
than budget. And process stocking of raw material (sidat which is still alive) will
make the cost of maintenance of raw material increase, for now the company use
to one time buy the raw material for one time production. The company just
maintenance the stocking of finish product that already to sale and deliver to the
customers.
VI.2.4.2 Purchasing time the inventory of raw materials affects the using of
cash or fund of PT. Umbul Rasaki
The purchasing time that does not has fixed schedule make company to
work harder in manage the cash in and cash out when the operation is process. PT.
Umbul Rasaki does not make the schedule and estimation of how much the
budget for one month operation and production. It is just estimates the amount of
inventory of product that already order by the customer and if the fund or cash
still enough to buy the raw materials (Sidat) and the uses of cash more than
expected.
This is one of the weaknesses in purchasing the inventory for production at
PT. Umbul Rasaki, because of the company does not have the fixed schedule for
purchasing time the raw material it will make the uses of cash unstable even for
one step of operation for example production process. This make the company has
unstable amount of cash in and out during the month or period. For the next
57
production the company should be make correction about the uses of cash in and
cash out during the operational and make estimation for budget of operation
especially for production because the good production in this company will going
well.
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CHAPTER V
CONCLUSION AND RECOMMENDATION
V.1 Conclusion
From the discussion in the previous chapter regarding the effect of
inventory over the management cash in and cash out in one month period of
operation at PT. Umbul Rasaki as a home industry business, the researcher
conclude that generally, the effects of inventory over the cash inflow and cash
outflows in PT. Umbul Rasaki has significant effect especially for the cash
outflow during the operation time. The management of inventory in PT. Umbul
Rasaki is efficient in operation (production process) and the management how the
use of cash is still needs to manage and make the planning of the use of cash for
the operation. So that, PT. Umbul Rasaki must be more concerns about the how to
managing, planning, and estimation about the cash outflows even the cash
outflows in small amount. PT. Umbul Rasaki should be maintains and make the
planning clearly about the cash inflows and cash outflows management.
Furthermore, the researcher concludes the following points:
1) Purchasing, production, and selling process of inventory at PT. Umbul Rasaki
effects the cash inflows and cash outflows management.
All process that involve regarding the inventory of product at PT.
Umbul Rasaki related to cash inflows and outflows management, where these
all process or activities involves the cash whether it is cash outflows when
59
PT. Umbul Rasaki needs cash during the production to produce the product or
it is called Unagi Kabayaki, or when it is get the cash from selling product
activities in one month. During the operation in one month PT. Umbul Rasaki
use almost of all cash for purchase the raw material. The rests are use for the
supporting items and activities during the production process that called as
operational costs.
The first level in operation at PT. Umbul Rasaki is purchasing the raw
materials. This process of getting the raw material at this company is still
relies on the supplier. PT. Umbul Rasaki does not have ability to build the
pools for cultivates the raw material yet. So, that is way PT. Umbul Rasaki
provides the raw material for production. The next level is process production
of inventory (Product) itself at PT. Umbul Rasaki already has its own
procedures such as SOP for production process. The procedures and result of
production has been check by Healthy Department and registered in BPOM
Indonesia. So, the procedure for the production process at PT. Umbul Rasaki
is processing with the standard base. And at this level the company use the
most of cash outflows to produces the product. The other level is selling and
delivery the product to the customer.
There is no planning budgeting especially for production level
especially for the planning of budgeting that will uses for one month
production. For example in harvest time of raw material PT. Umbul Rasaki
must plan more cash or fund to buy more raw materials, or the seasonal sale
like New Year season usually the customer will order the Unagi kabayaki in
big amount.
60
2) PT. Umbul Rasaki is experiences of the purchasing does not has the fixed
schedule
PT. Umbul Rasaki does not have the fixed schedule for purchasing
activities because of the harvest time and the amount of the order lists from
the customers. The biggest supplier for PT. Umbul Rasaki is supplier from
Cilacap, Central Java. The cycle of purchasing of PT. Umbul Rasaki is quite
similar every month where the supplier offering the raw material to PT.
Umbul Rasaki first, or vice versa. This activity usually happen every month
of operation is processing.
The reason why PT. Umbul Rasaki still relies on its supplier and does
has a fixed purchasing schedule when needs the materials for production is
PT. Umbul Rasaki does not has ability to build the pools for raw material
Cultivation indoor or outdoor yet. Until now PT. Umbul Rasaki still purchase
raw material from its supplier at Cilacap, Central Java or other Supplier from
Bengkulu, Sulawesi, and Lampung. So PT. Umbul Rasaki buys the raw
material based on the production process needed. It is make PT. Umbul
Rasaki does not have fixed schedule for purchasing time.
3) PT. Umbul Rasaki as a home Industry business does not has clearly the flow
of management of cash inflows and cash outflows
As a beginner in home industry (entrepreneurship) PT. Umbul Rasaki
is one of the companies which can survive until now that already has been run
for four years since it is builds. But in operational process it still does has
clearly the flow of management it is can see from the time of receivable
collection time does match with the purchasing time. That is makes PT.
61
Umbul Rasaki experience the fund deficit when the suppliers offerings the
raw materials. For this situation PT. Umbul Rasaki looking for the borrowing
money from other party.
4) Almost all of the activities in PT. Umbul Rasaki directly monitoring and
controlling by the owner during the operational process
Because of PT. Umbul Rasaki is middle size company and as a home
industry in food suppliers, It is still directly monitoring and controlling the
process by the owner. For example the activities that starts from purchasing
the raw materials, until selling and delivery time to customer. In purchasing
activity the owner directly make order and negotiation to the supplier until
raw materials arrived on PT. Umbul Rasaki place. It is also happens when PT.
Umbul Rasaki selling and delivery the product (Unagi Kabayaki) to the
customer. Because of almost of all activities monitoring and controlling by
the owner, it make the management of unclear. And it makes possibility the
cash inflows and outflows that unrecorded transaction. It will make the
management of cash inflows and outflows of the company will mess up.
5) Because of the needs of inventory (product) that must be produce during the
production process, PT. Umbul Rasaki always focus in fulfilling the order
lists that already ordered by the customer. And the product ready to sale to
customer directly send to customer based on the order lists. So the storing
does not take a long time in freezer or storage.
6) PT. Umbul Rasaki change the strategy to minimize the costs during the
operation process
62
The old strategy of selling at PT. Umbul Rasaki is directly selling to
customer such as selling directly to restaurant. It will more costs than PT.
Umbul Rasaki selling the product to the food distributor, it will less costs
because distributor usually buy or order the product in big amount, and
delivery time just once or twice in one order. So, it will decrease the costs of
operational during the selling process. For example of costs is
accommodation or transportation during delivery time. If PT. Umbul Rasaki
directly sells to restaurant more costly because they not order in big size and
order in uncertainty time.
VI.2 Recommendation
Based on the conclusion from the analysis and evaluation above, the
researcher considers some of these suggestions are relevant to complete the results
of the analysis and evaluation:
1.) PT. Umbul Rasaki suggested to managing the inventory during the
production process in produce the product as an inventory of company.
To manage the inventory by manage the product result of production with
estimation of the amount of product balance with the costs will used to
produce the product. The estimation of cash in purchasing the raw
materials whiles the production process.
2.) PT. Umbul Rasaki suggested to manage the using of cash during the
operation by making the planning of budgeting for every division in the
company and also make the estimation not only for the inventory of the
company but also estimation of the how much the cash inflows compare
with the cash outflow for every month production. make the budgeting
63
planning not only for the production as a central operation in PT. Umbul
Rasaki, but also for purchasing and selling activities even it is small
amount of cash. Make budgeting for every month will know clearly the
flow of cash out during the time that related to inventory.
3.) In Purchasing activity by PT. Umbul Rasaki suggested to make the
planning for fixed schedule of purchasing activity, to manage when PT.
Umbul Rasaki buy the raw material before the next production process.
So, there is no empty day that the production not processing. With the
fixed schedule PT. Umbul Rasaki will easily to maintain the need of raw
material for production. And PT. Umbul Rasaki suggested to using the
Economic order Quantity and reorder point for purchasing raw materials
in one month production. And also the company should make the
schedule for purchasing time in order to manage the uses of cash in and
cash out during the time.
4.) PT. Umbul Rasaki suggested to describe clearly flows of cash in and out
during the operation process or not. By making the planning the flow
when the cash is out for and cash is from. With this line of flows of cash
will can see clearly the using of the cash for operational process. With
manage the cash clearly and stick to the flow of cash will cover the fund
for purchasing when the receivable does not collected yet. And because of
the owner involve in almost of the activities especially handling the cash
in and out, PT. Umbul Rasaki Suggested to separate the fund for company
operational with the private use by the owner.
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65
APENDICES
PT. UMBUL RASAKI S,O,P CUTTING DAN CLEANING
1. Sebelum potong ikan masukkan kedalam freezer selama 20 menit. 2. Lalu potong ikan dari leher sampai ekor.di usahakan ikan jangan di
potong. 3. Tulang dan kepala diambil lalu dipisahkan dari daging ikan.
4. Cuci dan Bersihkan darah dari daging 5. Cek dan Cabut tulang halus dari daging
6. Cuci dan bersihkanterlebih dahulu sampai lender ikan hilang
7. Sebelum potong ikan yang ke dua, tempat tatakan ikan harus
dibersihkan dan di cuci terlebih dahulu sampai kelihatan rapi.
Dibuat,18 December 2010
PT. UMBUL RASAKI S,O,P PEMBAKARAN/PANGGANG
1. Sebelum bakar ikan masukkan kedalam tembat pembakaran.
2. Ikan di beri sauce kulit maupun daging 3. Bakar kulit terlebih dahulu sampai kelihatan matang
4. Di beri sauce lagi daging dan kulit 5. Bakar daging sampai kelihatan bewarna kekuningan, jangan
kelihatan daging hangus atau daging bewarna hitam
6. Lalu di beri sauce lagi dan ikan pindahkan kenampan
7. Ikan segera dinginkan di tempat rak pendingin.lalu susun dengan rapi
8 jaga kebersihan tempat kerja terutama lantai, jangan Kelihatan kotor.
Januari, 05 2011
PT. UMBUL RASAKI S,O,P STIMER
1. Sebelum stim ikan terlebih dahulu di beri air secukupnya dan diberi kain kasa satu lapis kedalam stim baik bawah maupun atas
2. Lalu tutup stim dari arah kanan ke kiri searah jarum jam, tutup sampai
bunyi. 3. Stim selama 5,7,10 menit sesuai permintaan customer lalu dipisahkan
hasil stim tadi, jangan sampai tercampur
4. Mulai menghitung menit tombol tengah stim berbunyi. 5. Angkat ikan dari stim ke nampan lalu diberi sauce dan dinginkan di
tempat rak pendingin.
6. Cek kain kasa, apabila kotor terlebih dahulu dibersihkan.
7. Cek debit air, ababila kurang tambahkan air sesuai dengan ukuran. 8 jaga kebersihan kompor,sekeliling kerja,lantai jangan kelihatan kotor Dan berantakan.
Dibuat,18 December 2010
