BradyRenner CPAs’ Guide to Overcoming Manufacturing Industry Challenges

Published by BradyRenner CPAs | April 24, 2024

The manufacturing industry is facing many financial challenges which require strategic planning and financial expertise. Businesses need to find solutions to such problems as increasing expenses and supply chain issues persist. The Certified Public Accountants at BradyRenner offer services that benefit the manufacturing industry.

Manufacturing Industry Challenges

Identifying the challenges facing the manufacturing industry is the first step in crafting solutions for your business. In order to solve their problems, manufacturers must recognize the most pressing issues facing their businesses. These include:

Global Competition

An increasing number of domestic and international competitors poses a significant challenge for manufacturing companies. Low-cost overseas producers in particular threaten the profit margins of smaller manufacturers.

Skilled Labor Shortages

When skilled workers are in short supply, manufacturing companies cannot find or retain trained employees, which impacts productivity and growth. Older workers are retiring and younger generations are not attracted to manufacturing careers, leaving companies short-handed.

Regulatory Compliance

Significant administrative effort and resources are required to address complex regulatory requirements, which can cause a strain on resources. An increase in federal, state and industry-specific regulations necessitates significant time and resources be dedicated to compliance.

Automation and Digitization

In order to remain competitive with other businesses through the streamlining of processes, manufacturing companies can expect significant upfront costs related to equipment, software, and training of employees. Additionally, with automation and digitization comes an increase in cybersecurity threats as well as data breaches which can compromise customer trust in addition to disrupting operations.

Rising Costs of Raw Materials

Production costs and profit margins are directly impacted by an increase in raw material prices, especially for smaller manufacturers.

Global Trade Uncertainty

Tariffs and trade tensions disrupt global supply chains, which negatively affects manufacturing through import and export dynamics. Lead times are also increased by trade uncertainty, frustrating customers.

Solutions to Issues Facing Manufacturers

There are several possible solutions for manufacturing companies to explore in order to address these recent challenges.

Advanced Manufacturing Technologies

In order to keep up with their competitors, manufacturers should consider adopting automation, robotics, 3D printing, and the Industrial Internet of Things (IIoT) which improves efficiency and reduces costs while enhancing product quality.

Sustainability Practices

Companies should implement green manufacturing practices and eco-friendly initiatives. Not only will this allow companies to reduce waste and access renewable energy sources, but it may provide a competitive edge by accessing environmentally-conscious markets.

Diversify Supply Chains

Due to recent supply chain disruptions, companies should consider diversifying their sources in order to avoid slow downs in manufacturing. By exploring local sourcing and data analytics, businesses can avoid frustrating their customer base with longer lead times.

Workforce Development Programs

The skilled worker shortage is not going away, so companies need to invest in training and development in order to attract and maintain capable workers. On the job training and other incentives for skilled workers can provide an advantage to manufacturers, making them more attractive to potential employees.

Compliance Management Solutions

Using software and expertise, companies will be able to navigate the complexities of federal, state, and industry-specific regulations. Additionally, this can lead to improved data-driven decision-making and customer service.

Cybersecurity Measures

Robust cybersecurity protocols and data protection strategies need to be implemented in order to prevent cyberattacks and data breaches which can interrupt production while affecting customer trust.

Strategic Procurement

By diversifying suppliers and negotiating contracts with existing suppliers, companies can weather raw material cost fluctuations and supply chain issues.

Customization and Small Batch Productions

Small manufacturers have more flexibility than their larger counterparts, which gives them an advantage when consumer demand for customized products and smaller batch sizes is increasing. They can offer tailored solutions to meet these demands.

How BradyRenner CPAs Help

The CPAs at BradyRenner can help manufacturers overcome these challenges and thrive in an ever-changing environment through several solutions-based services:

Tailored Financial Advice

BradyRenner’s CPAs provide personalized financial guidance to address manufacturing challenges.

Budgeting and Forecasting

Budgeting, forecasting, and financial planning are accomplished with the assistance of BradyRenner in order to optimize performance.

Compliance Support

In an evolving climate of regulations across federal, state, and industry, BradyRenner ensures adherence to tax laws and regulatory requirements so that you can focus on manufacturing.

Capital Management Strategies

BradyRenner offers expertise in funding acquisition and resource allocation.

Customized Financial Solutions

The CPAs at BradyRenner provide clients with comprehensive accounting, reporting, and planning tailored to their manufacturing business.

With the proper strategy and right support, manufacturing companies can succeed in today’s highly competitive environment. It’s essential to partner with a CPA who can provide your manufacturing company with expert financial advice as well as tailored solutions to drive success, and that is how BradyRenner’s Certified Public Accountants operate. 

Manufacturing businesses are facing challenges that require strategic planning and financial expertise. BradyRenner can help address issues such as increasing expenses and evolving tax laws and regulations head on. Contact BradyRenner today in order to benefit from the combined expertise of BradyRenner’s Certified Public Accountants. And make sure to come back soon for the next installment in our series where we will tackle financial challenges in the nonprofit sector.