Stage 1 · Diagnose the problem
Why industrial plant business cases stall at approval: a diagnostic guide
By the Global B2B Group project team · Published · Editorial guidance, not engineering, legal or financial advice
Short answer: Most plant business cases stall because the cost estimate is more precise on paper than the scope behind it. Check the capacity basis, the estimate class, missing utilities and site costs, and whether ROI depends on optimistic volume — then fix the weakest input before asking for more quotes.
Feasibility study: a structured assessment of whether a plant investment is technically, commercially and financially viable, with a stated cost estimate accuracy range and explicit assumptions.
Symptoms that the case is not ready
Approvers send the case back, lenders ask for a "bankable" study, supplier quotes differ by large margins, or the team cannot explain what is excluded. These are symptoms; the cause is usually one of the eight checks below.
Eight diagnostic checks
| Check | Red flag | What to do |
|---|---|---|
| 1. Capacity basis | Target output stated only as nameplate rate, no product mix or shifts | State saleable output per year with product mix, shift pattern and realistic availability |
| 2. Bottleneck evidence | New line justified without measured station throughput | Measure the current constraint first; debottlenecking may defer CAPEX |
| 3. Estimate class | One CAPEX figure with no accuracy range | Label the estimate class (e.g. AACE 18R-97 Class 5–3) and its range |
| 4. Scope boundaries | Quotes cover equipment only | List civil, utilities, installation, commissioning, freight, duties and owner's costs separately |
| 5. Utilities and site | Power, water, compressed air or refrigeration not checked | Get a site utility check before supplier RFQs |
| 6. Volume and price | ROI only works at full utilisation from month one | Model ramp-up and a pessimistic volume case |
| 7. Contract model | No decision on who owns interfaces | Choose turnkey/EPC vs multi-contract before tendering |
| 8. Permits and E&S | Environmental and social requirements unknown | Screen permits early; lenders often reference IFC Performance Standards |
How to run the diagnosis — step by step
- Write one paragraph stating the business problem (capacity, cost, quality or new market) — not the solution.
- Collect 4–12 weeks of real operating data: output, downtime, scrap, labour hours.
- Score each of the eight checks as green, amber or red with the evidence you have.
- Fix red items first; most can be closed with site data or a clearer scope, not more supplier quotes.
- Re-run the CAPEX/ROI model with base and pessimistic cases, then issue a structured RFQ.
Illustrative example (hypothetical)
A food plant asks for a second packaging line. Diagnosis shows the filler runs below rated speed because of changeovers, and the cold store is near its limit. The red flags are checks 2 and 5: the project scope changes from "new line" to "changeover reduction plus cold-store study". This example is illustrative and not a client case.
Turn this into a comparable RFQ
For industrial projects from about USD 250,000, our project team prepares the requirement, contacts suppliers on your behalf and structures comparable quotations. Free for buyers; no savings or outcomes are guaranteed.
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Frequently asked questions
- What accuracy should an early plant estimate have?
- It depends on scope definition. AACE 18R-97 classifies early conceptual estimates with wide ranges that narrow as engineering progresses; state the class instead of a single figure.
- Do we need a consultant for a feasibility study?
- Not always. Many gaps close with your own operating data and a clear scope. Lender-facing studies may require independent review.
- When should suppliers be contacted?
- After the capacity basis, scope boundaries and site utilities are written down — otherwise quotes are not comparable.