← Notes · · auto
Writing a Capex Case Your Finance Director Will Sign
Most capex requests fail not because the kit is wrong, but because the case is written by engineers for engineers.
The last capex request I saw rejected had a beautiful ROI calculation. Eleven pages, colour charts, payback period to the nearest month. The finance director sent it back in forty-eight hours with two words: “Not now.”
The engineer who wrote it had spent three weeks on it. He had costed the machine, factored in maintenance contracts, even allowed for a two-week installation shutdown. What he had not done was speak the language the finance director needed to hear.
That is the problem most manufacturers run into. The people who know why the kit is needed are not the people who control the budget. And the gap between “this press is costing us a fortune” and “here is a signed purchase order” is wider than it looks.
Start with what the business is losing, not what you want to buy
Finance directors do not think in terms of machines. They think in terms of money leaving the business and money coming in. So before you write a single word about the new kit, you need to quantify what the current situation is costing.
That means real numbers. Not “the old press causes a lot of downtime” but “in the last twelve months, the press caused 340 hours of unplanned downtime, which at £85 per hour of lost throughput equals £28,900 in lost production.” If you have those numbers, you have the beginning of a case. If you do not have them, you are not ready to write one yet.
This is the step most engineers skip because they find it uncomfortable. They know the kit is a problem. Why should they have to prove it? Because the person signing the cheque was not on the shop floor at half past two on a Tuesday when the thing went down again.
Be honest about the cost of doing nothing
A capex case is not just an argument for buying something. It is an argument against not buying it. Those are different things, and the second one is often more persuasive.
If the current machine fails entirely, what happens? Do you lose a customer? Do you run a manual workaround that costs you three operatives for two shifts? Do you subcontract at a margin that hurts? Spell it out. Finance directors understand risk. What they do not respond to is vague statements about reliability. They respond to “if this machine fails in Q3, we will miss the Morrison’s contract delivery window and face a £40,000 penalty clause.”
Write that sentence and you have their attention.
Keep the numbers simple and defend every one of them
You will be questioned on your figures. That is not a sign the case is failing, it is a sign someone is reading it. So build your numbers from the bottom up, and keep a working document that shows exactly where each figure came from.
If you say the new press will save 200 hours of downtime per year, be ready to show that the current press averaged 340 hours of downtime over the past three years, and that you are being conservative by assuming only 60 per cent improvement in year one. That is a defensible number. “We think it will be more reliable” is not.
Round numbers are suspicious. A payback period of exactly two years looks like someone worked backwards from the answer. Show your working.
Structure the case so a non-engineer can read it in ten minutes
The finance director is not going to read eleven pages before a budget meeting. Give them a one-page summary at the front: what you are asking for, what it costs, what you lose if you do not act, and when you expect to get the money back. Put the detail behind it for anyone who wants to go deeper.
Use plain language. If you write “optimise OEE across the production cell,” a finance director will stop reading. If you write “reduce the number of parts we scrap per shift from fourteen to four,” they will keep going.
Get the numbers before you write the case
The most common reason a good case fails is that the underlying data simply is not there. You cannot build a credible argument on gut feel, and you cannot fight back when someone challenges your figures if you have not measured anything.
If you are not confident in your current loss data, that is the place to start. The losses calculator at losses.cadencestandard.com helps you put a number on what poor equipment performance and process waste are actually costing per week. That single figure is often what makes a case undeniable.
Once you have it, the Six gives you a structured way to look at where the biggest opportunities sit across your site, so you end up making the case for the right kit, not just the one that annoyed someone last month.