From Profit to Profit Potential — Redesign the performance indicator to support Toyota Production System

摘要

The 20th century manufacturing management tended to “control” people by management accounting numbers. In order to survive the global competition, the management accounting must raise the precision of its measure so as to help, not control, the knowledge workers tap the reservoir of their tacit knowledge. Admitting the intrinsic effectiveness of ROA as the key performance indicator (KPI), while at the same time indicating the limitation of it for the purpose of measuring operational profitability, this paper proposes the notion of Profit Potential (PP), and offers the actual case of PP analysis regarding Japan''s Big Three, including the after Lehman Brothers shock of the year 2009. The relative superiority of Toyota Production System (TPS) as well as its problem is exposed through the analysis.