Operations Due Diligence: An M&A Guide for Investors and Business

PRODUCT TESTING

During the early twentieth century, Bell Labs installed the first large-scale telephone systems. At that time, the mass production of electronic components, particularly components that had to function outside in the elements, was largely an unknown, untested science. Since telephone systems relied on components that were installed in hard-to-reach places, like on top of telephone poles and buried underground, fully exposed to the weather, the ability to manufacture uniform products that worked reliably in the elements was critical to Bell Labs’ success. Replacing failed components is expensive after they have been installed in the field, and the reliability of the entire system could be impacted by the failure of a single component. ...