Standard diligence covers financials, legal, and commercial questions, and often technology. Operations usually gets a plant tour and a management presentation. That leaves both the value and the risk inside the operation unquantified.
What gets missed
- Utilization. At one precision manufacturer, saw cutting ran at 23% machine utilization, with three people covering what observation showed was 1.6 FTE of work.
- Supervisory structure. Layers and spans of control grow with the business and are rarely tested against workload.
- Quality and rework. The same plant had 14 inspectors, constant rework interruptions, and no KPIs to measure either.
- Reporting. Whether managers can see performance daily, or only after month-end.
Why a tour doesn't find it
Averages hide the gaps. A plant can look busy on a walk-through and still be running a fraction of the work its crews are sized for. Finding it takes direct observation: 10 to 20 observations per activity over several weeks, with reasonable expectations set from observed best practice, then compared with how the work is actually crewed.
What operational diligence delivers
- The opportunity sized in headcount and dollars, area by area.
- The operating risks, such as dependence on a few people, no KPIs, and no daily management cadence.
- A starting point for the 100-day plan, so work begins the week the deal closes.
What it can lead to
At the manufacturer above, crewing was right-sized across eight areas, for example Deburr from 13 to 10, Makino from 37 to 31, and Quality from 14 to 11, with KPIs installed in every department. The improvements came from scheduling, crewing, and process changes and required no capital spending.