Addressing the Management Accounting Conflict -Aiming at Implanting the Pull-Production System
Converting the existing push-production to the pull-production is not an easy job as the existing system has its own deeply rooted accounting schema that justifies the mass, make-to-stock, production system. Return to the inventory-negative, cash-focused accounting frame is an imperative for the pull-production system to be implanted. How to address the management accounting conflict decides the feasibility of introducing the pull-production, or Toyota Production System (IPS). Accounting function is necessary for managing business. But, due to its loose structure, accrual based accounting reports can be tampered with, even lawfully. Especially, in the conventional full absorption costing framework, this accounting mechanism tends to induce manufacturers to increase reporting profit by making more goods than are consumed by customers. The management accounting function thus justified the economies of scale, push-production system throughout the 20th century, making all the more difficult to introduce the pull-production system, or TPS. To sustain the implementation of TPS requires companies such as GM or Ford, a framework-breaking effort to redesign the management accounting processes and practices. Toyota is a rare company in which the factorys power is not weaker than the headquarters one and the top management are mostly from car guys. In most companies, however, the headquarters, or the financial department is stronger than the factory. In those companies, the good-old accrual based accounting rules persist, in which the inventory-affirmative schema persists as against the inventory-negative one that underpins the pull-production system. Target of reengineering accounting is focused on the conventional full absorption costing, in which overhead is charged to product proportionately to the volume of direct labor or machine hours so that the more you produce, regardless of sales, the lower the unit cost at each operation becomes. This costing frame has become a serious barrier to implement the pull system. The author indicated that the implication of the pull-production must be strategically understood. Pull-production not only saves money, but positively serves the corporate strategy through visualizing the redundant resources, which also contributes to sustaining the global eco-system. Finally, the author introduced the System Design Flame in the Collective System Design Approach advocated by Cochran to show that, for all the accounting-free or accounting-linked approach, the subliminal, innermost area of Tone and Spirit plays the decisive role in successfully shifting to the pull-production system.
Management Accounting TPS Pull-Production System
Makoto Kawada
Faculty of Business Management, Meijo University, Nagoya, Japan
国际会议
天津
英文
2007-10-20（万方平台首次上网日期，不代表论文的发表时间）