Manufacturing Technical Due Diligence
An operator's read on whether a manufacturing capability will run at the rate, cost and yield your model assumes. Performed before you commit capital, by Manufacturing Engineers who have built, bought and backed the capability being assessed. We call the method Operator-Grade Due Diligence.
What does manufacturing technical due diligence cover?
It covers whether the capability actually runs: real cost per good unit at the target rate, not the demo unit cost; yield and rework as they are on the floor rather than on the dashboard; equipment condition and process capability; whether the supply chain and the workforce will absorb the volume the model assumes. It ends in a verdict and a realistic ramp curve.
Commercial diligence checks the market. Financial diligence checks the books. Legal diligence checks the contracts. Each is necessary and none of them can tell you whether the thing gets made at three in the morning on a Tuesday, at the cost the model needs, by the people the target actually employs. That question is answered on the floor or it is not answered at all.
So the work goes to the floor. Read the operating data and the capability claims first, then walk the site: the maintenance engineers, the shift leaders, the quality team. Watch a shift change. Read the rework log rather than the summary of the rework log. Ask the supplier whose lead time has slipped twice this quarter why it slipped.
How is this different from a technology audit?
A technology audit checks architecture, security and design maturity, and is usually run by generalists who have never qualified a process at rate. Manufacturing technical due diligence checks whether the thing can be made repeatably, at cost, by the workforce the target has and on the equipment the target owns. They assess different layers and are not substitutes.
| Exercise | What it establishes | What it cannot see |
|---|---|---|
| Manufacturing technical DD | Whether the capability holds at rate, cost and yield on the floor | — |
| Commercial DD | Market size, growth, deal thesis | Whether the asset can deliver the volume the thesis assumes |
| Financial DD | Books, cash flows, working capital | Whether next quarter's books will resemble last quarter's |
| Legal DD | Liabilities, contracts, IP ownership | Whether the IP is buildable at cost |
| Technology audit | Architecture, security, design maturity | Whether the technology runs at production rate |
The gap in the right-hand column is the same gap in every row, and it is where most acquisitions in advanced manufacturing quietly come apart. Not because the diligence was bad, but because nobody was asked the manufacturing question.
When in the deal should it start?
Early enough to change the price. Running it at letter-of-intent stage lets the capability read inform what you offer. Running it after exclusivity alongside commercial and financial diligence is the common pattern. Running it after signing can only change the integration plan, because the price is already fixed.
Pre-LOI capability read
One to two weeks. Is the capability claim credible, and what would it take to be true? Sized to inform the offer rather than confirm it.
Full technical & operational diligence
Three to five weeks for a single site. Site visits, operating data, supply chain and workforce. Ends in a rate-cost-yield verdict and a ramp curve.
Post-close capability plan
What the integration has to fix first, sequenced and costed. For deals already signed where the capability question was never asked.
Who is it for?
Acquirers signing for an industrial asset. Private equity and venture investors writing cheques into advanced manufacturing and deep tech. Corporate development teams running acquisitions in manufacturing sectors. Boards committing to large capital programmes. Anyone whose downside depends on whether a manufacturing capability actually works.
Kaipability works the buy side only. No transaction mandates, no success fees, no position in whether the deal happens. The read is paid for by the party carrying the downside, which is the only arrangement under which an honest verdict is worth what you paid for it.
What do you get?
An evidence pack with a clear verdict: what is true, what is optimistic, what is missing, and what the realistic ramp to target rate looks like with the capital and time it needs. Written to be acted on by the deal team and defensible to an investment committee, not framed for a slide.
- The verdict, on the first page. Whether the capability supports the thesis, and at what price it would. No hedged consultantspeak.
- Rate, cost and yield, as evidenced. What the asset does today, with the operating data that shows it, separated from what the management case says it will do.
- The ramp curve. Time and capital to reach the modelled rate, with the constraints that set it: equipment, qualification, supplier base, people.
- The gap list, priced. What has to be fixed, in what order, and what each item costs. Usable as a hundred-day plan the morning after close.
- What we could not establish. Named explicitly, because the unknowns you know about are the ones you can price.
Most consultancies cannot perform this read because they were never operators. Most operators cannot frame it for an investment committee because that was never their craft. Kaipability sits in the narrow strip that has done both: built capability at Rolls-Royce, bought capability across three continents at Atlas Copco Group, and backed and stood up innovation centres, supply chains and factories across a range of sectors. We are Manufacturing Engineers and Modern Industrialists, not management consultants. Manufacturing-technology agnostic, independent of vendors.
Send us the target.
Tell us what you are looking at, what the model assumes, and when you need to decide. You will get a scope and a fixed price back, and a straight answer about whether the question is one worth paying us to ask.
Start a conversationOr email info@kaipability.com directly.
Questions
What does manufacturing technical due diligence cover?
It covers whether the capability actually runs: real cost per good unit at the target rate, not the demo unit cost; yield and rework as they are on the floor rather than on the dashboard; equipment condition and process capability; whether the supply chain and the workforce will absorb the volume the model assumes. It ends in a verdict and a realistic ramp curve.
How is this different from a technology audit?
A technology audit checks architecture, security and design maturity, and is usually run by generalists who have never qualified a process at rate. Manufacturing technical due diligence checks whether the thing can be made repeatably, at cost, by the workforce the target has and on the equipment the target owns. They assess different layers and are not substitutes for one another.
How long does a manufacturing due diligence engagement take?
A pre-LOI capability read is typically one to two weeks. Full technical and operational diligence on a single site runs three to five weeks including the site visit, longer for multi-site or multi-country targets. The work is scoped to your deal timetable rather than the other way round.
What do you get at the end?
An evidence pack with a clear verdict: what is true, what is optimistic, what is missing, and what the realistic ramp to target rate looks like with the capital and time it needs. Written to be acted on by the deal team and defensible to an investment committee, not framed for a slide.
Do you assess pre-revenue and deep-tech targets?
Yes, and it is where the gap is widest. A pre-revenue target has no production record to read, so the assessment turns on process evidence: whether the design can be qualified, whether the supplier base for the critical steps exists, and how far the highest technology gate sits ahead of the lowest manufacturing gate the company has actually passed.
Do you work for the buyer or the seller?
The buy side. Kaipability works for acquirers, investors and boards committing capital, and does not hold transaction mandates or take success fees. The read is paid for by the party carrying the downside, which is the only arrangement under which an honest verdict is worth anything.
What does manufacturing due diligence cost?
Fixed price, scoped to brief. Price is set by the question being asked, the number of sites and the deal timetable rather than by hours booked, so the number is known before the work starts. Send the target profile and the decision date and you get a scope and a price.
When in the deal should it start?
Early enough to change the price. Running it at letter-of-intent stage lets the capability read inform what you offer. Running it after exclusivity alongside commercial and financial diligence is the common pattern. Running it after signing can only change the integration plan, because the price is already fixed.