Bankruptcy of manufacturer endangers

automotive supplier

For every software product used in your company’s business-critical operations, the source code and the technological know-how you otherwise would not have, should be placed in escrow.

Case Study II

No Production Control Without Software.

The Situation

An automotive supplier is changing its production equipment to use vertical milling machines. The change affects other departments as well. Purchasing, planning and the management information system need direct access to certain data from the production equipment. Minor modifications and extensions have to be made to the software and sensors of the control system. A call goes out to the vendor of the control system.

The Problem

The vendor of the control system filed for bankruptcy a few weeks ago. The necessary modifications can only be made by adapting the source code of the control system. The programmer also needs knowledge of how the sensors are constructed and of the interfaces. The source code was deposited with a notary in the traditional, passive escrow way, but after the source code is tested and compiled, it is clear that the software cannot be modified within a reasonable time frame or at a reasonable cost. This is due to the fact that neither construction details nor firmware necessary for running the sensors are included.

The Danger

The time planned for the project “More Efficient Vertical Milling Machine” is no longer feasible. Modifying the control system software creates additional costs. An external service provider has to be found and commissioned, plus different sensors with compatible interfaces have to be bought.  Add the unforeseen costs of product selection, implementation and training. These costs were not included in the project budget. The savings expected from the use of the new vertical milling machines are delayed indefinitely, and the new expenditures wreck the financial plan.

The Solution

For every software product used in your company’s business-critical operations, the source code and the technological know how not included in the software should be placed in escrow. The software and the related components, manuals, drawings, configuration files, keys and passwords should be verified and tested. Only by way of an active technology escrow concept can you be sure that you can respond to changing business conditions, quickly and completely, without snowballing costs.