Alternative Dispute Resolution

IntroductionAn original equipment manufacturing company built an automated piece of assembly equipment. This equipment was slated for installation during a one week when General Motors plant shutdown. Scheduling was a priority with little room for error. To maintain schedule the equipment was air freighted to the customer's location. The field installation crew uncrated the system and upon inspection the installation team noted the crated had been dropped upside down.

The installation team was able to quickly note that there had been some change in the condition of the crate when they began the uncrating process. The shipping department of the original equipment company as a matter of procedure screws the crate together to simplify the uncrating process. As the installation team examined the crate they noticed it was nailed together not screwed together. An examination of the shipping documents and contact with the original equipment manufacturers shipping department and General Motors receiving department revealed that no one had been advised of any problems or issues with the shipment.

Dr. Tingting Yan

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Upon completion of the crate disassembly it was visually obvious that the system had been dropped up side down, the system is bolted to the based of the crate. All the bolts had been ripped from the base of the crate and the machine was not bolted down. The damage to the machine was to the top side of the unit. This system was a high speed precision piece of equipment and was now incapable of functioning and was not repairable without being returned to the factory. The original equipment manufacturer at considerable cost was forced to build a second unit to replace the original. The value of the damaged system is $ 235,000.00, with a cost of $ 145,000.00.

The OEM contacted the freight company and advised them that was a...