Spring/Summer 2015 | BWD 23
Digital defense
1
A protected information technology (IT) infrastructure is paramount for business continuity. Strong computer system
security that safeguards orders and information, and is bolstered by sound business data practices, is mission-critical
for 2015 and beyond. Customers and business partners are rightfully demanding security audits, and we suggest
regular audits that examine systems, people and policies. Conduct such audits at least annually.
Mother Earth’s role
2
The environment plays a huge role in manufacturing — from materials sourcing and availability to ecological
concerns and more. Add to this list natural disasters and the impact they can have on manufacturing. In recent years,
catastrophes such as earthquakes, floods and wildfires have wreaked hundreds of billions of dollars in economic
damage — to say nothing of their tragic personal consequences. Firms must prepare and practice emergency
contingency plans. Similarly, environmental hazards and regulations affect everyone from the plant floor to the
C-suite. Just ask the oil and gas industries how profoundly the environment can influence business.
Credit where credit is due
3
Research and development (R&D) tax credits are designed to lower innovation costs, and this federal incentive tax
credit can equal significant tax savings for manufacturers engaged in qualifying R&D activities. State-level credits
may also be available. Developing new products or manufacturing processes, or developing improved products or
processes, are examples of potentially qualifying R&D credits. There have been several taxpayer-friendly rules issued
recently that may increase a manufacturer’s R&D credit; however, supporting documentation requirements can be
extensive, so be sure to work with experienced professionals who can get your company the credits it deserves.
The deduction you can’t overlook
4
Domestic production activities deduction (DPAD) is a permanent deduction equal to nine percent of the lesser of
a manufacturer’s taxable income or net income earned from qualified production activities. Make no mistake, the
deduction calculation can be complex, but can result in increased cash flow through a reduced effective tax rate. It
applies to companies producing goods, developing software or constructing property domestically. And it doesn’t
matter where end products are sold.
Lean and mean
5
Lean manufacturing certainly creates buzz, but less than 10 percent of companies embrace the methodology as fullybought-in lean enterprises. When lean is fully entrenched, as with lean enterprises, it drives everything from taking
the order, production and collecting payment. We consult with manufacturers to employ lean strategies like Six Sigma,
value stream identification and more, all aimed at increasing productivity and operational efficiency. If you’re “lean
light,” aim to broaden the practices company-wide. When successful, lean can fatten the bottom line.
Bonus Content
Visit rehmann.com/BWD for additional manufacturing insights.