b'26 Partner News Winter 2020Enterprisenumbers of contractors. From that date,supply chain, a review of tax transfer pricing medium and large size manufacturers thatregulations and permanent establishment engage workers operating through anrules for new countries of operations will intermediary are responsible for determiningbe essential, as this may have a large whether or not each worker should beimpact on taxation exposure and liability.treated as a deemed employee (theirThere is a need to improve the sales employment status) - this responsibilityand operations planning processes in currently lies with the intermediary.order to ensure changes in demand are This may be a time for strategic hiresmet or responded to without delays, to strengthen your critical teams, aswith increased attention on order-we move into 2021 and beyond.cycle time and on-time delivery. Strategy and operations Financialsunderstanding managing your business the economic impacts Recession proofing whilst maintainingCost optimisation and financial strengthening a customer focus is a fundamental forwill be key to business resilience. Utilising manufacturing businesses in these times.financial planning and forecasting to model With the latest (October 2020 at thethe outcomes of planned reductions or time of writing) results from Make UKsincreases in investment; revenue impact Manufacturing Monitor showing that 10.2% offorecasting; and cashflow analysis including UK manufacturing firms are operating at fulltax liability planning; are all key tools for operating levels when compared to the startcontrolling the business. The need is to of the year, with almost 60% achieving 51- manage costs in the new normal and 99% of those operating levels, there is a needthis may include a need to rationalise to be focused on immediate strategy. Short-or strengthen your manufacturing term actions will have been and will continuefacilities and capital portfolio.to need to be taken in order to weather the downturn and lessen the financial impact.Regulationsmastering regulation, legislation and complianceA review of the customer base, productAs well as the more normal compliance tasks, mix and product profitability, could providethere is a need to respond to the additional useful insights into improvements. Some willaspects of compliance relating to the be identifying opportunities for competitivepandemic. For example, navigating shifting advantage, perhaps in new markets orguidance on social distancing restrictions, with new products, or to gain marketand the need to modify return to work plans share. The environment for manufacturingin line with government guidance, considering businesses varies depending on sector:legal and liability issues. Manufacturers however, a focus on customer satisfactionwill wish to pay even greater attention and the customer experience will aidto adherence to HSE standards and data retention and loyalty for the long term.privacy; as well as ensuring compliance with the loan requirements set out in Riskmitigating riskstimulus legislation.A timely review of the For manufacturers, the risks around supplycompliance function, to gain efficiencies, chain optimisation are front and centre.reduce the costs of non-compliance and The pandemic has seen global supplyto integrate the compliance function chains disrupted and with many needingmore closely into future planning, will help to seek alternative suppliers, who can bebusinesses realise their future plans. in far flung locations with sub-optimal transparency, so adding risk of a differentHow can BDO help?type. There is a need to update plans basedWe can work with you and your key on shifts in customer demand and to rightstakeholders to review your business size inventories and production capacity.resilience, using our Rethink model to assess the areas of need and workWe can workManufacturers are reconfiguring supplywith you to identify and implementwith you to identify and chains to find cost reductions in logistics,solutions to support your business suppliers and/or inventory levels. Some,resilience into the longer term.implement solutions to depending on industry, are assessingsupport your businessthe cost-benefit of maintaining duplicatePlease get in touch with:facilities or routes on an ongoing basis, toAman Nirwal resilience into the ensure resilience in the event of furtherSenior Consultant longer term.local lockdowns. For those purchasing newaman.nirwal@bdo.co.ukcompanies or facilities to protect their+44 (0)7811 739 791'