Why Did Automated Manufacturing Machinery Fail to Achieve Performance Requirements?

Why Did an Automated Manufacturing Machine Fail to Achieve Performance Requirements?

Engineering and operational analysis to support an international arbitration case

A dispute between a designer of automation machinery and a manufacturer of cargo shipping containers resulted in international arbitration, with Exponent providing both technical and quantum and delay analysis.

The Challenge

A manufacturer of cargo shipping containers hired a contractor specializing in factory automation machinery to design and build an automated assembly line that would install the container's floors. During testing, the as-designed equipment was unable to meet production speed and quality specifications, which caused the project to fall behind schedule and the shipping container manufacturer to miss important milestones and deadlines.

As a result, the container manufacturer canceled the contract and, ultimately, exited the container business altogether. Shortly thereafter, the container manufacturer and the contractor entered into a dispute to determine whether the failure to meet specifications and schedule were the result of engineering errors on the part of the automation designer or the container manufacturer's failure to supply appropriate and timely materials for testing.

The automation designer asserted that if materials had been provided on time and without defect, they would have completed the project per the contract time schedule. The claims were then submitted to arbitration governed by a one-member tribunal under the London Court of International Arbitration's rules.

Exponent's MULTIDISCIPLINARY Solution  

Outside counsel retained Exponent on behalf of the cargo container manufacturer to review the proposed equipment design for fitness for the automation task, determine the causes of speed and accuracy under-performance, determine whether the manufacturer's claimed losses were reasonable, determine whether the contractor's proposed time and cost extensions were reasonable, and help estimate the fair market value of the equipment after the project was abandoned.

Exponent's Impact

Our multidisciplinary team submitted separate expert and rebuttal reports on the engineering, schedule, and quantum issues, and prepared to provide expert evidence on behalf of the cargo container manufacturer. We also prepped counsel with tutorials on technological issues and participated in a joint expert conference and joint expert statement. 

In this case, the parties reached a settlement shortly after the joint expert statement, days before the arbitration was scheduled to begin. Exponent's rigorous engineering and quantum analyses provided our client with the valuable insights needed, helping encourage an early resolution and avoid additional legal costs.