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Rationale of the Study
In the dictionary, the word inventory means, as an itemized list of goods, property or a list of things what a person owns. Everyone does inventory and it can be done anywhere, to maintain the availability of something that is useful to someone. So, every person undertakes inventory, which can be considered as a natural occupation by an individual. It’s a need for an entrepreneur to do an inventory, for the business to work with the inconsistent changes in relation to the supply chain.
Every inventory of the business tried to strike a balance either of what is needed and what is demanded, considering reduction or cutting is the major factor of cost and it is called inventory management or inventory control. Assets are basically an inventory which are stocks in business. An entrepreneur purchases raw materials for the purpose of reselling it to the customers. In situations where purchasing or manufacturing of the items is not able to satisfy the demand, inventory enables a company to support the customer service, logistical or manufacturing activities. For a business to have a successful inventory management enfold simultaneously endeavor to balance the costs of inventory for the benefit not only to the business but also to the consumer itself. It is necessary for a business to keep records specifically inventory records in order to provide an information that can be useful to make decisions on inventory management.
A lot of planning and hard work is required to have a successful business. It is like sailing; you can avoid storms with an accurate navigation, but the moment you lower your guard, any time the storm can capsize your ship. Business is a matter of analytical decisions, weighing things down and taking into account the experiences you’ve encountered to formulate strategies to ensure the success and the eagerness to achieve the desired results of doing such activity.
The study seeks to enhance the practices of the carenderias in managing their inventories by incorporating the practices of the selected restaurants in Cebu City that have been operating for years and have achieved the right way on how to manage the availability of their inventories.
In a long rectangular table, it is a habit among Filipinos to join together during meal time, whether home-cooked or at one of the many eateries in the country, considering it to be an important time to socialize, or to at least communicate with someone. Some businesses started as a hobby, skills or talents by an individual to make profits. In which today’s generation, some Filipinos engage in food business. The concept of selling foods for profits has been way of the Filipinos’ livelihood, and it can be seen everywhere. One good example is the Carenderias also called as turo-turo, in which customers will point toward the food they want to eat from the displayed dishes. Carenderias are known as a quick service type eatery, foods are already cooked and to be served anytime. Also, they serve foods in which it is popular to the taste of Filipinos. Carenderias are easy to build on; all you need to have is a capital, location, the skills in cooking and the word of mouth advertising. Carenderias are a small type of food business that some Filipinos are engaging, in order to sustain the needs of their family. Carenderias are independently owned by an individual, in which all the cases that the business is facing can only be solved by the entrepreneur with the help of the appropriate decision made by an individual.
Many entrepreneurs, from ignorance or overconfidence have a difficulty in achieving business growth and development. Perhaps the most usual mistake of entrepreneurs is related to the management of the business. To start a business is not a sufficient skill for an entrepreneur. As the business continues to grow, the entrepreneur must develop a certain strategy to foster a continuous growth for the business. Nevertheless, if the entrepreneur does not advert to this need, He may not be able to manage the resources available properly and thereby record a decrease in profitability or even bankruptcy. This mistake often occurs when the business has reached a certain level of growth. Entrepreneurs should realize that when a business has reached a certain level of growth, business requires a certain expertise in the management that is practiced by people with knowledge and experience. In other words, entrepreneurs should have enough skills to manage a larger scale of business. (Burdus, 2010)
Every entrepreneur wants to grow their business and know what factors that affect the continuous development. Perhaps the lack of survival strategy, especially on ways of achieving competitive advantage discontinue the progress of the business. Having a clear strategy, entrepreneurs can determine their target goal and how they can achieve them. (Ibid)
One of the most important aspects in running a business is Inventory management; Entrepreneurs should have the basic knowledge and fundamental skills of inventory management. Having these skills, entrepreneurs can properly manage the resources, in a way that he can maximize the business’ profits. It is important that an entrepreneur can control the items or goods that are needed for the business, to determine whether the business has enough supply to use. The turnover of inventory represents one of the primary sources of the revenue generated and the earnings for the company. Therefore, inventories are company’s investments that are to be realized in the business’ operating cycle that would eventually generate a profit for the business. Also, inventories are the heart and soul of sales and production. Inventories are components that are used for production of goods or services that are sold in the business’ daily operating cycle. It is categorized based on how they are being used during the production process. These include raw materials, work in process goods and finished products. Business always needs to keep inventories available in order to maintain the production cycle without affecting the daily operation process of the business.
It is important for the managers to properly manage their inventory efficiently and effectively in order not to have too much or too less resources available for the production of the business. Proper management of inventory also includes knowing what resources that should be stored and when will be the next purchase of the resources be needed. Also, it is very important for managers to know how much resources that should be stored and control the level of inventory to avoid the possibility of slowing the production of the business due to lack of resources available and to avoid the risk of having excess inventories not being sold. Therefore the efficient and effective management of inventory helps in achieving better operational results and has significant impact on a business’ profitability.
In achieving the business’ success, one factor that could really help is motivation in which it has a direct impact on individuals working in the business. Perhaps in business, what motivates managers and employees to do their job is the need to achieve the goals of the business, because when the business becomes successful, managers are rewarded for the effort they have made. The reward that was granted to managers gave them the self-esteem and got even more motivated; in fact Maslow’s (1943) Hierarchy of needs explains that the self-esteem gives a person a sense of value and that sense gives motivation to the managers. It is not only the managers who need motivation, but as well as those people in the business (e.g. Employees). Motivated employees tend to be more productive, and that productivity makes the company profitable and gives the company's ability to achieve their goals.
In every business, there’s always a goal that an entrepreneur need to set out in order to know what the entrepreneur want to achieve for the business. Setting goals is an essential part in achieving success. In fact, Locke and Latham’s goal setting theory (1990) cited by Sarah Pavey explained that, having clarity in setting a goal is one of the principles that can improve the chances of success. Setting goals must be clearly stated and certain, to be able to have the exact path of what an entrepreneur wants to achieve. In addition, having that certain goal needs commitment to that particular goal to achieve what you really want to achieve and believe that you can achieve that goal. The entrepreneur should dedicate more time and work on improving the ability of the business to achieve goals and learn what are necessary for the business to succeed. An entrepreneur is often motivated in achieving challenging goals for them to enhance feelings of achievement and encourages them to work harder to achieve them. In selecting the right goal, entrepreneurs should also listen to the feedbacks of other people to identify how well a business is progressing. Gaining feedbacks also helps you know if you can meet the goal you want to achieve. It is not necessary that the feedbacks come from the other people; an entrepreneur can also check by simply looking at the accomplishments such as financial statements and analyzing how well a business is progressing.
Every business has their goals, and by this, we refer to what the business intends to become and achieve at some point and how this business aims to reach their goals. Aristotle explained in one of his four causes, the final causality that a certain purpose or aim can cause an individual to do an action to achieve its aims. The desire of the entrepreneur to achieve that certain goal depends on how motivated he is. As cited by Elizabeth Eyre, McClelland’s Theory (1961) which explains that each individual has their own way to be motivated. There are individuals who are motivated in achieving goals, others are motivated when working with other people, and some are motivated when they influence other people. Individuals develop them through their cultures and life experiences. An entrepreneur needs to be motivated in order to be persistent in achieving a certain goal. To sustain a business goal is, therefore, a condition where a business has to achieve consistently what is set out to achieve so as to succeed and remain in business. Also, setting things incrementally with short-term plans that take it as a stepping stone to larger plans the entrepreneur wants to achieve. Setting goals is an essential part in achieving success.
There are several factors that could affect the business in achieving its goals; in fact, these factors can be measured using S.W.O.T. Analysis. As cited by Morrison (2014), Humprey has developed this tool to evaluate the strategic plans of the business. This tool is used to understand the strengths of the business that gives them an advantage over others. The strengths of the companies give them more opportunities. The tool is also used to determine the weaknesses of the business that gives them a disadvantage for others and the threats that could cause those troubles.
Using S.W.O.T analysis, business can determine what are the internal factors and external factors that the business has to deal with in order to recognize what hinders the business from achieving its goals and what does not. When managers can determine these factors, the management then decides and plans an action in accordance to achieving their goals. Managers are always faced with numerous situations where they have to make several decisions that should give a positive effect on the business. Thus, Atkinson’s (1980) expectancy-value theory explains that the decisions made by managers are influenced by what they are expecting to achieve when making such decisions. Atkinson defined expectancy as what an individual believes the outcome will be and defined value as how important the outcome it is to the individual. Making a precise decisions determine how a business should be managed because this decisions are ways on how the business can achieve its goals.
The success of the business depends on how well the inventories are being managed. However, the management of the inventories depends on how the managers achieve their desired goals. Also, the desire of the managers to achieve a certain goal depends on how motivated they are to do their work. Goal setting theory explains how efficient and effective business should make their goals. The goals set by the entrepreneur are the aim they want to achieve. Thus, final causality gives the idea that the goal of the business causes the managers to do such thing in order to achieve its goals. This cause is the primary reason that makes the managers be motivated. The motivational need theory explains that achieving certain goals makes an individual motivated. Achieving goals give managers confidence to do more on their job, in fact Maslow’s (1943) Hierarchy of needs as cited by Chapman explains that self-esteem gives a person a sense of value and that sense gives motivation to the managers. It is not only the managers who need motivation, but as well as those people who are directly affected by the business. Motivation helps managers in making better decisions. The Expected Value Theory explains that the decisions made are weighed based on the desired outcome they want. After achieving the desired result, this gives managers a job satisfaction. This satisfaction gives motivation to entrepreneur and makes him more productive and the management of the business goes well. A better management of the business leads the business into success and the business becomes more profitable.