Grant Thornton flags hidden margin leaks
- Grant Thornton said manufacturers lose margin long before month-end, when plant-floor decisions on scrap, rework, overtime and expedited freight flow into costs later. - In a March 30 report, the firm said changeovers, supplier substitutions and schedule changes can alter profitability within hours before finance reports catch up. - Spare-parts data problems can also hide costs: duplicates and unused stock raise carrying costs and tie up cash. (grantthornton.com)
Grant Thornton said manufacturers often lose margin on the plant floor first, then discover it later in cost of goods sold and gross margin reports. (grantthornton.com) In its March 30, 2026 article, the firm said finance systems usually record results after operational and commercial decisions have already been made. (grantthornton.com) Grant Thornton listed scrap disposition, schedule changes, overtime approvals and logistics choices as daily decisions that can accumulate into margin swings across an enterprise. (grantthornton.com) The firm said a production changeover, a supplier substitution or an expedited shipment can change profitability within hours, even if the financial effect appears later. (grantthornton.com) Its argument is that margin is measured in finance but created and lost in operations, procurement and customer execution. (grantthornton.com) Grant Thornton said many manufacturers have added digital manufacturing platforms and integrated systems, but more data alone does not create margin transparency without clear ownership of the signals that matter. (grantthornton.com) A parallel problem sits in maintenance, repair and operations inventory, where weak spare-parts master data can distort what companies think they own and what that inventory costs. (sparetech.io) (ibm.com) SPARETECH said duplicate material records lead to duplicate warehousing and duplicate orders, which increase storage and ordering costs and reduce transparency across plants and storage locations. (sparetech.io) The company also said 22% of spare-parts inventory sits unused for more than five years, while 42% of spare parts are never used and end up scrapped. (sparetech.io 1) (sparetech.io 2) IBM describes the same tradeoff in plainer terms: manufacturers need the right spare parts at the right time and cost, balancing stockout risk against holding costs. (ibm.com) Generis Group’s manufacturing summit recap from April 2025 pointed to the same operating theme, highlighting a SPARETECH session on using artificial intelligence in maintenance, repair and operations to cut inventory costs and optimize spare-parts management. (blog.generisgp.com) The thread running through all of it is simple: manufacturers that wait for monthly finance reviews are looking after the leak has already spread. (grantthornton.com)
