Confucius realised the importance of carrying out checks when he said “You must check, what people hate; what people love, you must check”.
Typical points to be assessed in an operational due diligence are:
- Are the production costs considered in the business plan realistic?
- Were the past maintenance expenditures sufficient to maintain the functional reliability of the buildings and the equipment?
- Are the maintenance expenditures in the business plan appropriate?
- Is the business model scalable, where are the capacity bottlenecks and are the capital expenditures planned sufficient to achieve the budget?
- Can the production volumes considered in the business plan technically be achieved?
- Are there safety and environment risks in the sector that can jeopardise the entire business model?
- Do the planned operational improvements appear achievable?
- How efficient are the operational processes?
- Are there personnel risks in the operational areas (key-person risk)?
Completence Operational Consulting undertakes operational due diligence in the context of M&A processes.
