None of these show up cleanly in a data room. They show up when you walk the floor and ask the people running it the questions the deck doesn't answer.
1. Real capacity, not nameplate capacity
A line can be "installed" and still be months from producing at the volume the model assumes. Nameplate capacity tells you what the equipment was rated for. It doesn't tell you what the line actually produces with today's staffing, changeovers, yields and downtime. I want the actual utilization data, not the spec sheet, and I want to know what long-lead equipment the ramp depends on that hasn't arrived yet.
- Actual output and utilization by line over recent months, not rated capacity
- Yield and scrap trends at current volume
- Any equipment the ramp plan depends on that is still on order, with current confirmed lead times
2. Process validation status, not just existence
Many operations can point to a validation binder. Fewer can show the process is still running within the validated range today, under current operators, across multiple lots of raw material. Validation is a point-in-time result. The question for an investor is whether that result still describes the process that's actually running.
- Process monitoring data against the validated parameters
- Changes made since validation, and how each was assessed
- Performance across raw-material lots and shifts, not just the validation runs
3. CAPA trends, not CAPA counts
A low open-CAPA number can mean a well-run quality system, or a quality system that's stopped catching its own problems. The count alone can't tell you which. I want to see what's closing, how fast, and whether the same root cause keeps reappearing under a different part number.
- CAPAs opened and closed over time, and the age of what's still open
- Recurring root causes across products or lines
- Effectiveness checks, and whether any were extended or skipped
4. Single points of failure in the supply chain
One qualified source for a critical component or a sterilization step is a risk most financial models don't account for. It's usually invisible until it isn't, and requalifying a second source in a regulated product is rarely quick.
- Sole-source and single-source components and services, especially sterilization
- What qualifying an alternate would take, in time and validation work
- Recent supplier performance and any supply interruptions
5. How much of the operation lives in one person's head
The best operations I've seen are boring in the right way: the knowledge is written down, trained, and auditable. The worst ones run beautifully right up until that one engineer takes another job. Key-person dependency rarely appears in a data room, but it's one of the fastest ways for a manufacturing plan to stall after close.
- Who gets called when the line goes down, and how many people that list contains
- Whether critical process knowledge is in controlled procedures and training records
- Retention and succession plans for the people the operation depends on
What's the item on your diligence checklist that financial models never seem to account for?
Chris Steadham is the founder of Truestead Advisors and has spent 30+ years in medical device product development, manufacturing scale-up and general management. Working through a question like this on a deal or a program? Start a conversation.