INVENTORY CONTROL AND PLANNING OF RAW MATERIAL BASED ON MANAGEMENT FUNCTION AT PRODUCTION MANAGEMENT OF TIRTAMAS MEGAH LTD. KEDIRI – EAST JAVA (part 4

Chapter 3

REPORT ON THE PROGRAM EXECUTION

3.1.Description of the institution
3.1.1. History of Rusa Satria Wisata

Firstly the owner of Rusa Satria Wisata started the tours and travel service business from passport handling service under the name of Rusa Putih Perkasa on January 11th 1995, he operated the business at the modest stall at Jl. Candi lontar utara IV / 48 as the office, the business skyrocketed, Rusa putih perkasa made the most profit ever that finally the owner decided to expand wider, running the whole services of tours and travel such as transport, reservation, ticketing and tours arrangement service under a new name Rusa Satria Wisata.



With the new name Rusa Satria Wisata on November 24th 1997, the owner turned the business to a better performance ; office, management, also the business scope, started from the only immigration document handling service became all tours and travel services. The new office situated at Jl Manukan Tama AIII no. 27 now named Jl Manukan Tama no. 79.

At the beginning business went quite well, Rusa held many tours package domestically or regionally especially costumers from Singapore and Malaysia, sometimes Rusa organized Muslim pilgrim cooperated with P.T. Giani and P.T. Farfaza.

Unfortunately soon after monetary crisis struck Indonesia, Indonesian economic growth degraded statistically, people had devastated so hardly in very long term as the politic situation had been instable, ruined the economic life from grass root up to elite, and everybody was suffering of the crisis.

Many national business slightly collapsed, unlike neighboring countries Indonesia slowly relieved the pain caused by recession besides, currency fell down too far also people’s capacity were so low as people’s prosperity was fiercely torn .

This phenomena worldwide, as mentioned earlier, Indonesia remained in very long time because of plenty reasons which just made even worse. The crisis swept almost every business, tours and travel business especially where foreign currency extremely increased that made product price also high on the other hand people were mostly incapable so there were almost no income from international tours. It went slow too slow it was a real picture of tours and travel business at the time.

Then lots of tours and travel agents became bankrupt, or stay put. Well at least still to operate the business even though they did not win, some other much worse they just tried to exist in business.

This what had exactly gone through in Rusa Satria Wisata too, however the owner will not give up easily somehow he tried hard to do best he can to revive. As now to combine with Itravel management hand in hand running the business


Crisis management

In abnormal situation where economic was unhealthy, the only way to survive was saving the cost. Well it was clearly seen on the Rusa business which spent a lot of cost was no doubt for salary.

This was the reason why the owner did weird action to survive, well maybe for most it was normal act, however why it was weird. Because the owner decided not only to squeezed the number of employee but to cut the top management from director and secretary and most of person in any department. On the other hand the owner was still optimist to keep running the business by pushing the tours organizing.

The consideration to push the domestic tours organizing was because tours made the most profit among any item available in tours and travel business, while it did not require a lot of men nor a lot of money. The most capital needed to organize tours is brain. Gradually the owner of Rusa kept cutting the number of employee in order to save the operation cost for survive. Eventually the owner still kept only four main personnel, however those stood still were the only very loyal staff, they were two ticketing staff, one operation staff, and one driver.

At the time the owner directly drove the business, there was no longer yet tours division, Rusa just run ticketing and transportation well it did not make much money however it was not that bad idea to stay alive.

Technically at the beginning of crisis the owner tried to lift the business back up by simply selling tickets and offering transport rental as much as possible.

Eventually the owner realized that the only tours organizing allowed Rusa to make a better profit, therefore as written before, the concentration strategy was removed from ticketing sales push to tours sales.

The owner hired one new operation manager to replaced his position for driving the business and recreated the tours division, between the owner and operation manager made a deal, the deal was that operation manager would get some salary from the owner and the owner expected operation manager to pushed the income up by recreating tours division that possibly made a lot of profit from tours package sales.

However the owner could not support a lot of operational cost for survey, or any other kinds of activity like that, what he could give for operation manager in order to operate the business beside salary were;
• Complete office facilities such as computers, printer, telephones, fax machine, catalogs, and previous costumer bank data.
• Few money for simple operation supporting such as brochure supplies, consumption expenses for some presentations.
Operation manager had hard assignment, because the operation manager had to be able of inventing the most brilliant and effective strategy in crisis management.

3.1.2. Human Resources

Earlier the owner hired a professional team consisted of 2 persons, one to created structure of organization, and the other one to recruited the personnel, Rusa had 22 employees and staff, the following detail organization structure with job description will be explained below ;
• Director in charge to directed business globally and be responsible overall to the owner, on this position big responsible laid on his shoulder because the responsibility covered the business life.
• Secretary second right hand of director in charge for director duty assistant, arranged director’s routine business activity such as ; daily, weekly, monthly meeting. Summarized and recorded every meeting result then followed up necessarily, attentive and thorough, mainly required for this position.
• Operation manager third person in the company in charge to broke down whole global direction from director passed it to any personnel of every department, supervise the whole business activity seeing the progress by inspecting and checking every global sales activity report from the head department, summarized these reports bring it to the general meeting and he was the host of the meeting doing presentation, analyzed every single report already summarized from every head department, made improvement proposal if necessary when approved he had got to follow up. He was also the penalty executor for any rule breaker, he had authority to terminated someone who did not deserve to stay for any longer and to recruited a new employee. The operation manager audited every single business activity assisted by accounting department he was also auditing the whole cash flow journal, summarized them all in business report package then passed it to secretary.
5 tours staff consist of ;
• 1 Tour planner in charge to made a plan of tour package, arranged the whole required items to possibly made best tours experience ever, starting from the origin to destination then back to origin or home, here whole service needed from the transport, accommodation, attractions, meals, guide, there must be very specific skill as the organizer to sit on this position. Why organizer ?, because the planner must organize all those stuffs as mentioned above to be one fully integrated package serving the travelers, providing any requested related item in touring. In the tours division he is the boss.
• 2 Tour leader in charge to assisted tour planner in planning tours package, and when the time to held the tours, tour leader had to be able to coordinated every involved technical personnel especially freelance tour leader and guide, everything must be held as how it is planned by tour planner if unexpected things happened somehow it demanded improvisation, he had got to be decisive quickly control the situation however still always coordinated with tour planner.
• 2 Tour guide, basically this position was not urgently needed in most tours and travel agents, because they were very technical, which was easily found at every tourism and hotel school especially those were interested to earn extra money, but for the settle company at the time Rusa wanted permanent guide to stand by at the office to assist the whole tours arrangement and organizing. And when there was nobody at the tours department, these two guides could be information staff for the future costumers who were willing to find information about any interested tours destination before deciding to buy the product. And when the tours had to be held one of these guides got to go to handle the group, in rotation. One of them stayed to stand by at the office. The one handled the group must be able to explain every single important and interesting object of tours destination, to answered every guest question professionally.
6 ticketing staff consists of;
• One Coordinator in charge to be on line with airline for reservation and issuing, managed the ticketing cash flow from / to airline, with costumer and from / to the other agent special for sub ticket, made accounting journal just for whole ticketing sales report and the cash flow attached summarized from all issuing ticketing staff. Then handed it to accounting department, and gave order the operational staff to take ticket from airlines or the other agents to costumer.
• Three issuing ticketing staff, each personal had duty to issued ticket, together with sales report and the cash flow of the transaction done by any one of the issuing ticketing staff.
• Two operational staffs got order from ticketing coordinator to toke ticket from airlines or the other agency those already reserved by or stored for Rusa Satria Wisata, the reserved ticket directly delivered to costumer and the stored ticket delivered to Rusa Satria Wisata for the next costumer.
1 Accounting staff
• Coordinator had big responsibility in tracking any cash in and out reported in accounting journal, covered whole daily cash activity. To explained how exactly company finance condition. And he also had authority to released and kept money, including giving the salary to all employees.
• Journal staff had duty to reported daily cash in and out activity, put it in a accounting journal book, to assisted coordinator in tracking whole cash activity to know exactly how was the real company finance condition.
1 personnel staff
• In charge for filling, to toke care all employees’ files.
5 Drivers
• 1 Coordinator driver broke down duties from the operation manager or tour planner, and then he coordinated all regular drivers to do the assignment duties as per specific description for specific regular driver.
• 4 regular drivers did the assignment from coordinator as each driver had own specific duty from the coordinator
Management was implemented on Rusa Satria Wisata quite effectively, every employee did the duty as assigned on every one of them professionally follow the rule as mentioned on the job description. However economic crisis storm blew almost every business away, struck the business fiercely. The owner of Rusa chose to stand till the last breath.

Organizational chart





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Job Discription
I Travel team
• Mr. Fajar & Mr. Jafar ( Sales and product officer )
In charge fully to make a marketing strategy and marketing plan, policy especially relates to sales and product operation, setting the system to arrange a saleable tours package.
Holding series of some researches of marketing strategy, every single tours package, hotel reservation, plus a pattern of service to be whole evaluated in order to improve continuously for best service.
• Mr. Trisna & Mr. Krisna ( Promotion officer )
In charge to make policy of effective and efficient company promotion.
• Mr. Andi & Mr. Prayit ( operational manager & cost control )
In charge to establish financial policy tight, however also being very attentive and sensitive of profitable investment. Setting the system of accounting report with all necessary forms that is useful for a report of whole business activity in number. Setting finance controlling system effectively and efficiently.
Controlling, supervising all personals in operating the business to be on the way just like how it is all managed in the company management.
The staff
• 1 Person Sales and Tours Coordinator
Be responsible fully to arrange plan to do the business on the management way and achieving profit target, making business activity report periodically then summarized from steps of tours schedule. Doing the promotion policy, marketing manually or telemarketing, creating agent, simultaneously evaluating and collecting all market data to put in relation bank data.
• 2 Persons Sales and tours team
Consist of specific number of team right under the sales and tours coordinator who follow up the business plan from coordinator specifically in selling the product : tours arrangement service
Creating the tours package then sell it or giving the best travel solution for the prospectus costumer.
• 2 Persons Administration plus accounting
Full time staff that is doing the administration, accounting and stand by the office to receive and transfer the information. Helping others in all administration matters which is mostly needed by tour marketing, making schedule of meetings together with evaluation and last is filling all the meeting summary
• 1 Person Ticketing staff
A staff who has a duty to issue ticket, accepting tickets reservation, responsible to make trace of ticketing transaction daily to report to administration.


• 1 Person Operational staff
A staff has a duty like office boy but has a double function to be also a courier.
• 1 Person Passport and Visa Handling
A staff who has a duty to provide visa and passport handling service.
3.1.3. Commodity or service
Rusa satria wisata tours and travel agent is obviously business institution that is running the business in tours and travel field which creates service for the costumer.
As mentioned earlier the service provided by Rusa Satria Wisata is mainly tours arrangement service, can be either the whole service for traveler such as ; travel documentation handling, transportation reservation, meals reserved arrangement, hotel reservation, Tour itinerary, or just part of the whole service for example ; the passport handling or travel documentation only. So Rusa Satria Wisata tours and travel agent is the service business institution that is running business in the tours and travel field.
3.1.4. Facilities and Description location
Rusa Satria Wisata is situated at Jalan Manukan Tama number 79, on west Surabaya, kelurahan Manukan Kulon kecamatan Tandes. Two story building which is seen from outside is like stores, mini market, mart and such a thing. however interior design is perfectly designed in office purpose, the lay out on the first floor fully long vertical desk equipped with two computers, printers, scanners, stationeries, where main staff including ticketing, tours division operate, facing the costumer, right the opposite of the entrance door the manager table lays on and few more space on the aft used for break room, rest room and worship place. On the second floor is mostly a hall, but apart of it, right in the corner there is some space used for meeting room completed with round table suitable for maximum 15 pax capacity.
The location alone is very strategic for business, as very well known that western part of Surabaya is rapid economic developed part in Surabaya. Glamorous real estates all around such as housing complex, apartments, department stores, super market, mini market stimulate the growth of residence’s economic extremely fast.
Manukan is one of the regent located in the western part of Surabaya is automatically affected by the fact, the benefit of the location gives the positive impact in Manukan, nowadays more stores and business office open, following more demands from the costumer.

3.2. Description of the program execution
• How does Rusa Satria Wisata tours and travel agent implement management in running tours and travel business.
Since Rusa run air and ship tickets sales only, and tours were no longer operated. The owner started thinking to open the business for public joint partner.
Then the owner found Itravels management at last. They made a deal to run tours business together in rusa Satria wisata. However here the function of Itravels management is now wider than freelance tour leader and guide’s function was.
Because Itravels is the management setter, including cover the operational cost right after handover, so Itravels have authority to lead rusa in running business. Direction of business way in Rusa lies fully on Itravels’ shoulder while the owner has a function as the facilitator plus supervisor.
In starting this pattern of management, Itravels has to reorganize the structure and the person because it is the new management with the new guideline, then doing the recruitment process from starting to the end, familiarizing them with company tools, transferring program, plan and the strategy to the new men, and finally starting.
The owner settles everything, provides the office including the facilities, paying all the bills back to zero point no outstanding amount as the owner will hand over management professionally to Itravels management.

• Exploring the partnership management run at Rusa Satria Wisata
Since the operational management is in Itravel’s hand so the owner of Rusa handed over the authority of ruling the policy in Rusa management to Itravel fully, the detail description of Itravel’s management through plans, organization, leadership and resources control is gradually explained on the following points below ;

• Vision
• TIC ( Tourism Information Centre )
The goal of this management in running business is not making money from tours and ticketing sales even though in fact we do so however in concept Itravel sets in mind is not that way, the true goal of it is Tourism Information Centre ( TIC ) to provide the best helpful information for tourist financially, safely, and so much fun. Therefore Itravel has a motto “traveler’s best friend”.
• Being a worldwide consultant and management for tours and travel
Itravel wants to be a business partner of any tours and travel agents worldwide in setting management then implementing it on daily business operational or giving advice for the tours and travel agent as a client in doing tours and travel business, it is not necessary to be a physical tours and travel agent such as owning the building. Itravel has a function as the management setter and consultant.
• Extraordinary travel
As mentioned before the goal of Itravel is ( TIC ), so not only selling ticket, tours but also giving advice traveler to get safe and economic trip by assisting tourists to create a tour package suitable with tourist’s taste, and the budget.
Missions :
• Comprehensive and well plan starts from
• Organization structure; Right man on the right place.
• Well job description plan arrangement.
• Providing service for people of all classes.
• Submitting suppliers data such as; hotel, restaurant, tourism spot of all around Indonesia.
• Being a travelers’ best friend.
• Risk management.
There must be a lawful agreement contract for every single tour package which is able of explaining the conditions and facilities for the costumer, consisting the condition of payment, all include and exclude facilities of the package, special notes especially when dealing with airlines where price may increase suddenly without advice. So at very first time once the tour package is still promoted, take example on brochures there should already be following condition written on it, especially on pricing point it must be mentioned that tourists have to be aware that the price is not fixed yet, it is dependable on a lot of things.
The other important thing, once organizing a tour it does not need a stood capital because all funds come from the costumer money, the reason why itravel has a payment term, far before the day the payment must be settled to pay for the suppliers.
About the employee contract has to be clear, as the new comer in tours and travel business, Itravel will not hire men with employee status that takes consequences to provide them benefit when they resign. The status given for them is business partner however Itravels gives them all needed facilities including salary, which is considered not salary but operational supporting fee.
In controlling matter Itravel makes a lot of supervisor lines, on first line is immediate tours and travel coordinator who supervise the daily operational then record it on daily and weekly progress report submit it to right above him that is operational manager and cost control who is in charge to manage the operational system and control the expenses.
The operational manager and cost control is responsible of auditing every single recorded transaction and expenses, on the next line is the main Itravel team.
Marketing Plan
 Product knowledge
Basically the tour product is special; because it is not only ordinary tour package however these tours are;
• Tour request; suitable with desire as per budget plan.
• Tour demand.
• Tour needed.
I travel provides most wanted tours package, containing safe and economic material by dealing with costumer nicely. Following the motto be a travelers’ best friend so it is necessity that anybody on the desk constantly providing very helpful tour information to people whether they will buy a product or not.
At first submitting suppliers data such as; hotel, restaurant, café, tour leader, guide, tourism object, catering, transportation completely, then filling them in the cabinet per index alphabet to be manual and digital data base.
After all, holding product knowledge training and research attended by whole main I travel team and the partners.
 Positioning
Flexible product for general classes of people.
 Segmentation
All classes.
 Penetration.
• Sales ;
1. Direct sales
Lobbying any company, school, institution, foundation, organization and individual.
2. Indirect sales
o Telemarketing
o Mail and or e-mail
o informant ( individual / organization )
• Promotion
1. Brochure
2. Web –site ( pending )
3. banner
4. connection
Marketing strategy and profit sharing calculation
• Making informant ( individual, anybody / organization, any institution )
There is specific commission for any transaction they inform, 2 % for tour package 10 % per voucher sales. Connection and freelance tour leader, guide, recruited student can also be the informant.
• Coordinator, ticketing, administration, tour marketing, operational are considered as sales team get commission 5 % for tour package 30 % per voucher sales, if there is no informant so the profit for sales team will be 40 %.
Here is the detail explanation about the commission;
For tour package there must be break down cost sheet as made below;

 Fixed
Bus Rp. _______
Security Rp. _______
Parking & Toll fee Rp. _______
TL & guide Rp. _______
Miscellaneous Rp. _______
 Variable
Meals@ X Rp = Rp. _______
(+ driver, TL & guide)
Donation @ X Rp= Rp. _______
(+ driver, TL & guide)
Accommodation
@ room X Rp = Rp. _______
(+ driver, TL & guide)
________________ +
Sub total


Profit margin 10% Rp. _______
sales commission 5% Rp. _______
External informant 2% Rp._______
______________+

Total


Divided: number of persons
Price per person = Rp. ________ / Person

If there is no informant, so mark up price only 15 %, 10 % for management, 5 % for sales team, tours schedule and breakdown cost sheet are made following the condition sometimes the break down cost sheet is made earlier than tours schedule the other day is later. Steps to make schedule are ;

First listing all the connections collected from marketing lobby, this data is made daily on the end of the working hours by tour marketing checked by sales and tour coordinator ( 30 minutes before working hours end ).

A. Prospect connection list
Name ( company, ion, foundation, individual ) Address
phone number Connection




Secondly after prospect connection list is made, supervisor hand in hand makes an evaluation with tour marketing to mark those are very potential to be costumer, therefore they again make market potential list to follow up further.
B. Market potential list
Month Name of connection Follow / Up Final Result
Closed



Once the result of lobbying is finally closed on the other word is deal, they would like to buy the tours product. Last step is tours schedule.
C. Tours schedule
NNo MoMonth JaJan FFeb MMar AApr MMay JuJune JJJuly AAug SSept OOct NNov DDes
1.

 Room hotel voucher sales from contract rate, the profit sharing calculation will be divided in two types ;
 For commission type
Percentage commission X publish rate
Example;
Hotel Shangri – La gives contract rate with the pricelist;
Publish rate per room Rp400.000
Commission 20%
So total profit is: 20 % X 400.000 = 80.000
Then profit sharing;
Management profit; 60 % x 80.000 = 48.000
Sales team profit : 30 % x 80.000 = 24.000
Informant profit : 10 % x 80.000 = 8.000
 Different price type
If there is no commission from the hotel, only different price between contract rates to publish rate so Rusa will establish Rp 20.000 cheaper than publish.
Example;
Hotel Radisson gives contract rate with the price list;
Publish rate : Rp 400.000
Contract rate : Rp 320.000
Selling price as established 20.000 cheaper than publish will be Rp 380.000
So total profit is: selling price – contract rate
380.000 – 320.000 = Rp 60.000
Then profit sharing;
Management profit : 60 % X 60.000 = 36.000
Sales team profit : 30 % X 60.000 = 18.000
Informant profit : 10 % X 60.000 = 6.000
If there is no informant in either commission or different price situation, so the profit percentage for sales team is 40 %.
For the sales team profit portion, the profit sharing among them is fully organized by sales and tours coordinator.

 For profit sharing from air ticketing sales, the discount from agent comes into management. The profit will be shared is the different price from publish to selling price (mark up). The profit sharing calculation will be ;
Management : the discount + 30 % X mark up
Sales team : 70 % X mark up
The mark up pricing policy is;
For all promo and cheap classes with book ticket and Garuda Citilink Rp 50.000
• For the more expensive ticket or cheap e- ticket
1 person Rp 25.000
2 persons Rp 20.000
3 persons and up Rp 10.000
• For ship and train ticket
1 person Rp 40.000
2 persons Rp 35.000
3 persons and up Rp 25.000

All revenue gained outside of breakdown cost sheet and voucher sales such as gift shop discount, bonus from restaurant or hotel fully given to sales team to be fairly shared among them by coordinator. The accounting report about revenue and expenses to figure out profit or loss made by administration.



How does Rusa Satria Wisata evaluate, improve and keep the management up to standard.
Evaluating the tours business in Rusa is very complex activity, there a lot of supervisors, first line supervisor is definitely the owner of Rusa however here the function of supervising is only advising. Because directing, ruling are in Itravel’s hand.
And Itravel has supervising system by making a lot of supervisor lines, for the first line is done by immediate supervisor or sales and tours coordinator, by collecting all the activity and transaction form, summarizing all these forms in one daily and weekly progress report to give to operational manager and cost control.
Operational manger and cost control audits daily and weekly progress report then checking the accounting journal report including monthly loss and profit report. After all making conclusion to a new direction for a better direction in order to keep the management up to standard.
3.3. Description of involvement
3.3.1. Job description
As the writer had done training as part of a sales and tours team, the job description of sales and tours team ;
Follow up the business plan from coordinator specifically in selling the product : tours arrangement service
Creating the tours package then sell it or giving the best travel solution for the prospectus costumer.
3.3.2. Actual jobs
In sales and tours team the writer had done ;
1. Located the segmented market and penetrated it by lobbying the prospectus costumer.
2. Listing the prospectus costumer
3. Follow up and make a deal
4. Planning the tours package as per demand or initiative package
5. Assisting the sales and tours coordinator to make a break down cost sheet