Abstract:
PT. XYZ is a manufacturing company that produces small plastic parts for
motorcycles. Since it has tight production schedule, the company has to ensure that the inventory is sufficient for production activity. Its main customers are big automotive companies. The management for raw materials should ensure that the materials purchased in the best price, received properly, and managed properly by warehouse. To fulfill the customers’ expectations, the company needs an appropriate internal control system on the inventory management to prevent problems occur in the process. This research is focused on the internal control of inventory management on raw materials especially in control activities. Researcher uses qualitative method and in order to gather and process the data, researcher uses literature review and field research. Meanwhile, in the field research method, researcher uses 3 types of instrument such as documentation, observation, and interview.
As the result of the evaluation, researcher found that there are several best
practices done by the company. First, the company has written organization structure and job descriptions. Second, the company has written Standard Operating Procedures for purchasing and storing the materials. Third, documents used in the company have been printed in pre-numbered. Fourth, the company has a claim form. Fifth, purchase order shows the date of the materials needed. However, there are some weaknesses of inventory management in PT XYZ. First, the Material Control Department does not ask
written quotations from suppliers. Second, only one copy of purchase order is made by Material Control. Third, quantity check in the receiving process is done twice. Fourth, warehouse uses LIFO in taking out materials.
In order to overcome the weaknesses in this inventory management, researcher
proposes some recommendations for the company. The company should ensure that Material Control Department asks written quotations from suppliers. Material Control should create four copies of purchase order and give them to Production Planning Control, Warehouse, and Finance Department
Accounting). The company should create a team to receive incoming materials that consists of Warehouse and Quality Assurance Department. In addition, the company should rearrange the structure of the stacks.
