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🚨In the News

Well, that didn't take long...

AESC just hit the brakes on their $1.6B BMW battery plant in South Carolina. "Policy and market uncertainty" around EV credits and tariffs apparently spooked them enough to pause construction.

Here's what bugs me: we've got 1,600 good manufacturing jobs sitting in limbo because nobody can figure out if the rules will be the same next quarter, let alone next year.

It sucks for the communities that were counting on these jobs and the supply chain partners already gearing up.

Maybe it's time we start asking: how do we create manufacturing policy that survives political whiplash? Because this won't be the last project to blink.

🏭 Manufacturing Minute

I’ve seen this too many times…

A facility owned by a well-known PE firm.

Beautiful operation.

Modern equipment.

Great safety record.

One problem: they were leaving roughly $2 million annually on the table.

The culprit? Classic silo thinking.

Operations knew about bottlenecks.

Finance saw the cost impacts.

IT had dashboards full of data.

But nobody was connecting the dots.

This isn't rare. It's the norm.

The Intricate Gearing System Approach

The best PE exits I've witnessed treat facilities like Swiss watches, every component precisely calibrated to amplify the others.

Here's their playbook:

Operations: The Detective Work

• Map the real bottlenecks (hint: it's rarely the obvious machine)

• Identify layout inefficiencies that compound over shifts

• Spot energy patterns that correlate with production schedules

• Document the "tribal knowledge" before it walks out the door

Finance: The Truth Teller

• Calculate true cost of downtime (not just lost production, but cascading effects)

• Quantify maintenance cycles and their impact on cash flow

• Measure labor productivity variance across shifts and seasons

• Track margin erosion from inefficient product routing

Systems: The Connector

• Overlay production data with energy consumption patterns

• Connect maintenance schedules to quality metrics

• Link workforce utilization to equipment performance

• Create visibility into which products run best where

The Tactical Implementation Framework

Here’s my take on a tactical way to make this happen every time:

Phase 1: Assessment (Weeks 1-4)

Operations Audit:

• Production line efficiency mapping

• Workflow bottleneck identification

• Energy consumption pattern analysis

• Maintenance cycle correlation study

Financial Deep Dive:

• True cost of downtime calculation

• Margin analysis by product/line combination

• Labor productivity variance assessment

• Hidden cost identification (rework, expediting, etc.)

Systems Integration:

• Data architecture assessment

• Connectivity gap analysis

• Reporting capability evaluation

• Integration opportunity mapping

Phase 2: Quick Wins (Months 2-3)

• Implement energy monitoring for immediate visibility

• Standardize data naming conventions

• Create cross-functional dashboards

• Establish regular review cadences

Phase 3: Systematic Optimization (Months 4-12)

• Deploy comprehensive production analytics

• Implement predictive maintenance protocols

• Optimize product routing based on line efficiency

• Scale successful pilots across facilities

Why This Matters Now

Three trends making facilities optimization critical:

1. Labor shortage: Efficiency gains offset workforce constraints

2. Energy volatility: Smart monitoring provides cost predictability

3. Supply chain resilience: Optimized facilities adapt faster to disruptions

Your Next Steps

If you're a PE firm evaluating portfolio company facilities or a facility going through an acquisition do this:

Week 1: Conduct the 3-team audit (Operations, Finance, Systems)

Week 2: Identify the top 3 cross-functional opportunities

Week 3: Pilot one quick-win project to prove the model

Month 2: Scale the approach based on initial results

The companies that master this gearing system approach don't just improve margins, they create competitive moats that persist long after exit.

P.S., Whether you're trying to make sense of Industry 4.0, struggling with legacy systems, or just need a sounding board from someone who's navigated similar waters, let's talk. Book Your 30-Minute Strategy Call →

P.P.S., if you are a nerd (like me), the next installment of my Manufacturing-themed D&D comic is out! See it here: