Operational Due Diligence

Almost every operational thesis rests on a capacity figure, and almost every capacity figure in a data room is nameplate: the theoretical maximum a line could produce under ideal conditions that rarely exist. The number that matters is demonstrated throughput, the output the operation has actually sustained across real shift patterns, changeovers, maintenance windows and the seasonal peaks when the business most needs it. The gap between the two is where value plans quietly die. We rebuild the picture from production logs, downtime records, OEE and shift rosters rather than the summary slide, and we identify the true constraint, the one bottleneck that governs output regardless of what the rest of the plant could do.

That distinction reprices deals. If the growth case assumes volume the operation has never reached, the buyer is funding capex and ramp risk that the model treated as free headroom. We quantify the delta and hand it to the deal team as a specific, evidenced adjustment rather than a vague operational concern, so it can be argued in price or covered in the terms.

Resilience is not an average; it is a worst case. A supply base can look diversified in aggregate and still route a decisive share of revenue through one unqualified supplier, one approved-vendor tool, one port or one logistics lane. Operational diligence maps that dependency explicitly: single-source and sole-source positions, supplier and customer concentration, lead times, qualification timelines for an alternate, and the buffer stock that is really standing between the business and a stop-ship. Procurement sits alongside this, because input-cost exposure and the coverage of supply contracts decide how much of the margin the model relies on is actually contracted versus exposed to commodity and freight movement.

In deals into India this scrutiny is sharper. Import dependency for critical inputs, concentration among a small set of qualified domestic vendors, and logistics fragility across the distribution footprint are frequent and material. We surface them as named, quantified dependencies with the cost and lead time to remediate, not as a generic supply-chain caveat.

Cost and revenue synergies are usually presented as a financial output, but they are an operational assertion first: that two footprints can be consolidated, that procurement can be pooled, that a plant can absorb volume, that headcount can come out without service or quality falling over. Operational due diligence tests each claim against demonstrated capability and physical reality. Can the receiving site actually take the transferred volume within its constraint and quality envelope? Do the contracts, tooling and qualification requirements permit the footprint rationalisation on the assumed timeline? Is the procurement saving real once volume commitments and switching costs are counted?

We rate each synergy line as validated, conditional or unsupported, with the operational preconditions and the realistic phasing attached. This connects directly to the M&A workstream at /services/ma-transaction-advisory, where synergy value drives the price a buyer can justify, and it feeds a credible view of Day-1 operational readiness and the true feasibility of the integration being underwritten.