5 challenges faced by small manufacturers (and how to overcome them)
Manufacturers in the UK are facing a range of challenges impacting their ability to grow in today's competitive marketplace. From labour shortages to rising costs, there's a number of complex issues that are putting significant pressure on their bottom line. But what are these issues? And what are the best ways to overcome them?
1. Labour shortage
One of the most significant challenges facing small manufacturing businesses in the UK today is a shortage of skilled labour. This shortage is driven by a range of factors, including an aging workforce, low levels of investment in skills and training, and competition from other sectors.
To address this challenge, businesses must focus on attracting and retaining talent through modernised systems, benefits and training opportunities. Furthermore, adopting modern technologies like cloud ERP can help to alleviate some of the pressure on the workforce and improve productivity.
2. Rising costs
Thanks to the rising costs of energy, raw materials, and transport, even more pressure is being put on manufacturing to protect profit margins, making it increasingly difficult for businesses to invest in growth.
To overcome this challenge, a focus must be placed on improving supply chain management and looking for new ways to bring down the overall cost of your raw materials. This willultimately help to reduce costs and improve efficiency, enabling your business to remain competitive in the marketplace.
3. Regulatory compliance
UK manufacturers are subject to a range of regulations and compliance requirements, which can be complex and time-consuming to navigate, putting a strain on resources and impact the ability of businesses to innovate and grow.
To address this challenge, businesses need to stay up to date with regulatory requirements and ensure they have robust compliance systems in place. This can involve investing in technology solutions that can automate compliance processes, freeing up resources for other business-critical tasks.
4. Access to finance
Access to finance is a significant challenge for small manufacturing businesses in the UK, particularly those that are just starting out. Traditional lenders can be hesitant to lend to small businesses, particularly those that do not have a track record of success.
To overcome this challenge, small manufacturing businesses need to explore alternative sources of funding, such as peer-to-peer lending, crowdfunding and government-backed loan schemes. Adopting cloud-based ERP solutions can also help to improve visibility and control over finances, making it easier to secure funding from lenders.
5. Digital transformation
Despite the need for small businesses to fully embrace a digital transformation to remain competitive in today's marketplace, many are struggling to keep up with the pace of technological change, particularly those with limited resources and expertise.
To address this challenge of under-automation, decision-makers need to prioritise digital transformation and invest in modern technologies such as cloud-based ERP solutions. These solutions can help to streamline processes, improve visibility and control, and enable businesses to make data-driven decisions that drive growth and innovation.
Next steps
Whilst all these challenges require careful consideration and strategic planning - with the right solutions in place, your small business can easily overcome. By focusing on attracting and retaining talent, reducing costs, improving compliance, securing funding and embracing digital transformation, your business can overcome the challenges and achieve long-term success in today's marketplace.