Thanks to ordeals such as global pandemic and national emergencies such as brexit in UK, the manufacturing industry has faced a number of challenges in the recent years. This is going to have a long term impact as well.
Since the start of coronavirus pandemic, there has been a significant change in the way customers spend and demand. The tremors of Britain exiting the EU would also be felt in the manufacturing industry in UK.
Let’s take a look at the major challenges faced by the manufacturing industry in 2021.
There are still fluctuations going on between national and local lockdowns. This could lead to unpredictable circumstances where businesses might take on delayed tax bills, debt, postponed mortgage payments as well as empty order books. A small delay in tax bills and payments might have huge consequences such as penalty and fine.
Change management and clear communication are huge challenges for businesses.
The world is at the phase of entering new-age era filled with AI, automation and fourth industrial revolution. As of 2020, many British manufacturers have faced the largest skill shortage ever since 1989. With digital-based economy on the go, the manufacturing industry should look for ways where it can reskill and retain all its workers. This would allow businesses to ensure skill building while staying competitive. Ensuring that the employees have the right skill and picking out those who have those skills is a huge responsibility for businesses. Without an HR Management software, it would be hard to track it out.
With industry 4.0, every business would be able to act in a more adaptive, responsive and connected manner. With technologies such as SAP S/4HANA on the rise, every employee is believing that industry 4.0 is vital for their business. In the upcoming days, technology is here to stay. It would inevitably play a crucial role in logistics and production lines. This would serve businesses right in long term as well as short term. Every manufacturer should ensure digital transformation while integrating it with the right supply chain management system. But to integrate, there should be adequate knowledge among the employees. Or else, it becomes a challenge, even if they do not choose the right system integrator.
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In the recent days, you could have witnesses many brick-and-mortar shops being closed. Due to unforeseen circumstances, it is still not very clear on when they will reopen again. Hence businesses have to switch over to direct-to-consumer model. For selling goods such as clothes, electronics, food and drink along with furniture and household appliances, businesses can adapt to this model. Not to be forgotten, while businesses are moving on to the e-commerce pattern, they should keep in mind about different GDPR regulations while safely handling the customer’s data. Financial factors such as maintaining invoice, goods receipt and taxation should be handled carefully.
Ever since 2020 began, many businesses have started thinking about global manufacturing strategies. There is a prediction by the reshoring institute that companies have started participating in the reshoring concept owing to the rise in foreign wages, aluminium and steel tariffs and growing price of electronic components. The ownership concept has to be reconsidered owing to this. This has been a huge challenge while maintaining data and records.
Making sure that you are keeping up with the changing legislation would require a lot of demands. While maintaining industry sanity, you need to focus on factors such as Insurance, SDS, R&D Tax credit, State and Local laws, Insurance and much more.
Every CPA has to handle tax-based issues. While choosing the manufacturing CPA, you have to confirm your industry experience while offering better references. With tax cuts and job act including deductions for businesses, you need to record everything clearly to avoid any future penalty.
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