Innovation In Your Irish Manufacturing Business: 5 Key Areas To Focus On
It’s no secret that the manufacturing sector must evolve and innovate in order the meet the challenges of an ever-changing world. But where does the future of manufacturing lie and what opportunities for survival and growth are out there?
In this article we take a look at how Irish manufacturing companies can improve and adapt through innovation and lay the foundation for successful growth going forward.
1. Increase productivity
Increasing productivity could involve anything from implementing new auditing technology or introducing employee incentives to designing a better warehouse management system or tackling inefficiencies in your transportation and logistics. There’s a huge amount of scope for improved productivity in manufacturing, and getting it right can mean minimising costs and increasing operational stability.
In production, it’s also important that manufacturers implement programs to improve labour and capital productivity through streamlining their operations. Manufacturers should also look to reduce the use of non-renewable materials as well as those which are expensive, hazardous or difficult to source. Money can be clawed back by companies reusing and recycling materials which would otherwise be discarded as waste. This in itself could provide an excellent opportunity for research and development (R&D) which will only bolster the company’s innovation efforts.
2. Aim for continuous improvement
“Kaizen” or “Continuous Improvement” is a Japanese term that many manufacturing companies are well familiar with. It’s all about reducing operating costs, increasing efficiency and always striving for improvement, particularly with regard to systems and processes. By getting every member of staff engaged with the company’s plans going forward they are then invested in its success.
3. Foster a culture of innovation
How do manufacturing companies turn “ordinary” staff into fantastic innovators? How can managers and executives put innovation at the core of everything? The answer is by building and sustaining an innovation infrastructure, and a company-wide, ingrained capability for innovation. Employees should be able to quickly and easily obtain the management support and resources they need to bring their innovative ideas to life. Manufacturing companies should then look to monetise the imagination of customers, employees and business partners however and whenever they come about.
The Irish government itself has for many years recognised the importance of company growth and innovation through its introduction of R&D Tax Credits. Essentially, Irish companies can receive a portion of the Corporation Tax back, either as a credit or as a lump sum payment, to help towards the costs incurred during its R&D projects. The application criteria and what costs can be claimed for is very specific, although the scope for innovation is very broad and any company in any sector can apply.
The relief is generous, with qualifying R&D expenditure generating a 25% tax credit to be used against Corporation Tax, as well as a tax deduction at 12.5%. This essentially means that companies undertaking eligible R&D can receive a refund from the Revenue of €37.50 for every €100 spent on innovative projects. So, effectively, the R&D tax credit reduces the real cost of R&D by up to 37.5%.
Find out more about R&D Tax Credits on the Myriad Associates website.
4. Develop employee skills and talent
Whilst a manufacturing business is working on creating a culture of innovation, it’s also essential to focus on the development of skills and talent that existing employees bring to the table. Such talent can be a real opportunity to come up with innovative ideas and implement them.
A particular challenge can come when certain members of staff have been working for a company over many years. When someone’s been there a long time, it’s likely they’re rather set in their ways and it could be time for a shake-up. As part of a robust employee development plan, it’s well worth helping them broaden their perspective and see both their job and the company in a new light. An effective way of doing this is by exposing them to other people and other roles within other departments. Mixing employees together on a range of cross-functional roles mean they get the chance to tackle a new challenge. This could be solving a branding issue, a customer complaint or a supply chain failure for example. When you take employees out of their comfort zone and away from their usual surroundings, it provides the perfect opportunity to grow. They’ll gain new skills and experiences as well as the chance to network with others; this can then drive innovation and new ideas.
To encourage innovation, manufacturing companies need to seriously consider collaboration with other companies and third party organisations. After all, innovation very rarely happens in isolation. However, many managers and employees have traditionally found this difficult, not least because it conjures up (usually unfounded) images of uncertainty and job loss. Additionally, many peoples’ training and skill sets are attuned to what they’re used to, with many finding it difficult to adapt to the ideas and working practices of outside organisations. There are a few main skills that employees need to work on in order to have the best chance of collaboration success. These include:
- Time management and facilitation skills so that meetings are always effective and efficient
- The ability to trust that the employees they will be working with will share information, not hoard it. This is important because they will often need to engage in collaborative arrangements with customers, contractors and suppliers
- Conflict management skills to allow two-way, open feedback even when employees across the collaborating organisations disagree. This also applies to the various levels of management.
Talk to the experts at Tax Cloud
When it comes to company innovation and development, it’s important to understand all aspects, particularly financially. This is where we come in.
Developed by our professional team of consultants, accountants and specialists at Myriad Associates, the Tax Cloud platform can assist Irish businesses and accountants in wmaximising thier R&D Tax Credits applications easily and simply.
If you have any questions or would like to discuss R&D Tax Credits - or your company’s plans for innovation - call our team today on +353 1 556 2001 or use our contact page.
- Submitting R&D tax claims since 2017
- Strong track record delivering R&D tax credit claims
- Over €10m claimed and counting
- Industry leading specialists
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- Confident of delivering value to our clients, we offer our R&D tax services on a success fee-only basis.
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