MANUFACTURING MARGIN LEAKAGE CHECKLIST
Find the margin your factory is quietly losing
A practical checklist for owner-managed manufacturing and engineering businesses. Identify seven common sources of margin leakage, estimate the annual financial impact, and prioritise fixes using operational evidence, not instinct.
14 checks. About 10 minutes. Evidence-based.
HOW IT SCORES
Evidence in, priorities out
Fourteen tick-box checks across seven leakage areas. Each answer is scored, and your total lands you in one of three priority bands, so you know whether to refine, act, or move now.
0 to 6 ticks
Refine
Margin is broadly under control. Tune performance and protect the disciplines that got you here.
7 to 14 ticks
Act
A typical pattern. Real money is leaking. Fix measurement first, then rules, then the underlying cost.
15 to 28 ticks
Move now
Leakage is running the business. Start with one measurable area this week rather than a full-scale response.
SEVEN LEAKAGE AREAS
Where the margin actually goes
Each area carries a credible, well-documented cost. The checklist puts a number against yours.
01
Delivery performance
OTIF failures trigger expedites, penalties and lost repeat orders. Measure it before you defend it with stock.
02
Schedule churn
Plans that change mid-week quietly consume 5 to 10% of capacity through resets, changeovers and idle time.
03
Quality costs
Scrap, rework and returns typically run at 2 to 4% of revenue, most of it invisible in the P&L.
04
Overtime and labour
Recurring overtime is often structural, not demand. Some of it is avoidable once you can see the pattern.
05
Freight management
Freight and cost-to-serve often sit at 2 to 4% of revenue with no clear owner and untested carrier rates.
06
Supplier spend
A structured procurement reset commonly recovers 3 to 8% of addressable spend without changing quality.
07
Stock and working capital
Excess stock days tie up cash and hide poor forecasting. Benchmark yours against what service really needs.
HOW IT WORKS
From checklist to costed action
1. Work through the checks
Answer 14 evidence-based checks across the seven leakage areas. About 10 minutes, no prep needed.
2. Get your priority band
Your total lands in the 0 to 6, 7 to 14 or 15 to 28 range, so you know whether to refine, act or move now.
3. See the annual impact
Turn each weak area into an estimated annual £ range using the checklist’s example benchmarks.
4. Book the Blind Spot Audit
If the numbers warrant it, take the next step: a focused 90-minute audit that pins the real leaks.
BEFORE YOU START
Questions owners ask
Owner-managed manufacturing and engineering businesses that want to understand where margin is being lost.
About 10 minutes. There are 14 evidence-based checks across seven leakage areas.
The checklist uses example benchmarks to estimate an annual £ range for each weak area. These are estimates rather than a confirmed calculation of your business’s losses.
You receive a priority band. If you fall in the act or move now bands, the next step is a free 90-minute Blind Spot Audit, followed by a two-page Findings Note covering three major blind spots, their annual £ ranges and an action you can take that week.
No preparation is needed to start. Answer the checks using the operational evidence you have available.
THE NEXT STEP
Turn the checklist into a costed plan
Score in the act or move now bands and the next step is a free 90-minute Blind Spot Audit, followed by a two-page Findings Note: three major blind spots, each with an annual £ range and one action you can take that week.
Free to complete. No obligation. Places on the audit are limited.