CMC can assess liability ("burden sharing") for excess inventory due to cancellation of purchase orders or forecast reductions to contract manufacturers and component suppliers. We understand the broad range of common industry practices and attempt to be fair and even-handed to all parties. The objective is to determine the client's potential liability, if any, for finished goods, buy-back of excess inventory and handling costs.

We first study manufacturing and supply agreements between the parties and other order execution documents to understand client position from a legal standpoint. We research and document the chronology of events and communication history between the parties. If appropriate, CMC visits the CM site to understand the relevant operating processes and facilitate settlement of issues.

Materials Requirements Planning (MRP) simulation model quantifies expected month-to-month inventory levels and vendor management actions. We assess what materials should have been cancelled or returned to vendors.

The final report provides a range of financial liability based on somewhat differing settlement principles and common industry practice. Together with legal counsel, we can address litigation potential and defensibility of supplier claims. Our objectives are to avoid litigation and offer mutually acceptable settlement options.

Client saves $3.7 million (67%) in CMC-led liability analysis and settlement negotiation. Post settlement supplier relations excellent.