Common use of DEMAND PLANNING Clause in Contracts

DEMAND PLANNING. Section 4.01 The Recipient shall provide the Provider with forecasts of its Product requirements (the Forecasts) as follows: (a) For Product comprising raw materials, commodities or components which the Supplier sources from the Third-Party Suppliers under the agreements listed in Schedule 3 from time to time, the Recipient has already before the Effective Date provided the Supplier with a Forecast for the period starting on Effective Date and ending on 31 December 2024 (or such later date as required by the lead times indicated per Third-Party Supplier agreement in Schedule 3). No later than by 30 April of each calendar year, the Recipient shall provide the Supplier with a Forecast for such Products for the next calendar year (or such longer period as required by the lead times indicated per Third-Party Supplier agreement in Schedule 3). (b) For all other Products, the Recipient has already before the Effective Date provided the Supplier with a Forecast for the period starting on the Effective Date and ending on 31 December 2023. No later than by 30 November of each calendar year, the Recipient shall provide the Supplier with a Forecast for the next calendar year. (c) Each Forecast shall be broken down by calendar quarter. Forecasts shall be non-binding, except that any Forecast according to Section 4.01(a) shall be binding on the Recipient as further set out in Section 4.10. Section 4.02 The Recipient shall issue delivery schedules setting out its demand of Products on a rolling basis to the Supplier which shall: (a) cover (i) a period of twelve (12) months for Products with Lead Times shorter or equal to twelve (12) months or (ii) for Products with Lead Times longer than twelve (12) months, at least the period of the applicable Lead Time, (b) be updated on a weekly basis, and (c) comply with the applicable Lead Times and the Minimum Order Quantities (each delivery schedule issued in accordance with these requirements a Compliant Delivery Schedules). Section 4.03 The Supplier shall inform the Recipient within seven (7) Business Days after receipt of a Compliant Delivery Schedule whether it accepts or rejects such Compliant Delivery Schedule and any Compliant Delivery Schedule not rejected within such period shall be deemed accepted. The Supplier shall only be entitled to reject a Compliant Delivery Schedule if the Supplier would not be able to fulfill such Compliant Delivery Schedule (in terms of volumes and/or delivery dates) despite using commercially reasonable efforts (taking into account the allocation principles set out in Article V). If the Supplier rejects a Compliant Delivery Schedule in accordance with the foregoing sentence, it shall (together with its notice of rejection) make a reasonable proposal for modifications of such delivery schedule (in terms of volumes and/or delivery dates) that would make it acceptable. If the Recipient then re-issues a delivery schedule in line with these modifications, such delivery schedule shall be deemed accepted upon receipt by the Supplier. Accepted (and deemed accepted) delivery schedules shall serve as basis for the Supplier’s production capacity planning, and the Supplier shall use its commercially reasonable efforts to fulfill any accepted (and deemed accepted) delivery schedule. Otherwise, accepted (and deemed accepted) delivery schedules shall, except during the Binding Period (as set out below), not be binding for either Party. Section 4.04 The quantities of Products indicated for (i) the first two (2) weeks (if the Products are finished products) or (ii) the first sixteen (16) weeks (if the Products are raw materials) in each delivery schedule (the Binding Period) shall be deemed to be binding orders (the Firm Orders) which shall oblige the Supplier to Deliver, and the Recipient to take off and pay for, such quantities of Products, and the quantities of Products in the Binding Period may not be varied in any subsequent delivery schedule unless agreed by the Parties in writing. Section 4.05 Each Firm Order shall, for each Product, comply with the Manufacturing Lead Times and be for not less than the Minimum Order Quantity for that Product. If a Firm Order is greater than the relevant Minimum Order Quantity, the Firm Order shall be for a multiple of the Minimum Order Quantity. Section 4.06 Deliveries shall be made in the quantities, on the dates, and at the times specified in any accepted (or deemed accepted) delivery schedules issued by the Recipient for the Binding Period. Time and quantity are of the essence with respect to all accepted (or deemed accepted) delivery schedules issued by the Recipient. Section 4.07 Unless otherwise agreed by the Parties, all Products shall be Delivered to the locations specified by the Recipient according to FCA (Incoterms 2020) at the locations indicated in Schedule 1 (the Delivery Terms). Section 4.08 Risk of loss of, and title to, the Products shall pass to the Recipient upon Delivery according to the Delivery Terms. Section 4.09 If the Supplier fails, for any reason other than due to a Force Majeure Event or the Recipient’s breach of its obligations under this Agreement, to have Products ready for shipment in time to meet any accepted (or deemed accepted) delivery schedules issued by the Recipient when using the method of transportation originally specified or utilized by the Recipient, the Recipient shall have the right, at the Recipient’s discretion, to either arrange for shipment of the Products on its own or require the Supplier to ship the Products, in each case using a premium (more expeditious) method of transportation than originally specified or utilized by the Recipient, and the Supplier shall pay or reimburse the Recipient for any additional cost of such premium shipment. Section 4.10 With respect to any Products comprising raw materials, commodities or components which the Supplier sources from the Third-Party Suppliers listed in Schedule 3, the Recipient shall bear the cost and risk (and compensate the Supplier) for any obsolescence and non-cancellable payments to the Third-Party Suppliers listed in Schedule 3 for any quantities of raw materials, commodities or components which the Supplier has ordered: (a) as required for the manufacture of Products in accordance with the Recipient’s Forecast according to Section 4.01(a); and (b) within the lead times indicated per each relevant Third-Party Supplier agreement in Schedule 3. The list of Third-Party Suppliers and associated lead times in Schedule 3 may be amended annually in December by mutual agreement to reflect the current market conditions. Such agreement shall not be unreasonably withheld by either Party.