Supplier Exit Transition Plan
Use this plan when monitoring, corrective action, claim settlement, price negotiation or backup activation is no longer enough. The objective is to leave a risky supplier in a controlled sequence: protect current goods, documents, deposits, tooling, claims and replacement capacity before announcing a hard exit.
Exit triggers
- Evidence failure: supplier cannot provide consistent identity, production, inspection, shipment or payment-account evidence.
- Repeated quality failure: corrective actions are late, unverified or contradicted by the next inspection/arrival result.
- Commercial pressure: price, MOQ, lead time or payment terms change after commitment without documented cost basis.
- Recovery failure: refund, credit, replacement, rework or repair promises pass their due dates without proof.
- Continuity risk: the supplier becomes a single point of failure and a verified backup can cover the next order.
Exit risk register
| Open order | List quantities, deposits, unpaid balances, production stage, inspection status and ship date. |
|---|---|
| Assets | Confirm tooling, molds, labels, artwork, samples, test files and packaging ownership or retrieval path. |
| Documents | Secure invoice, packing list, certificate, test report, export document and prior approval records. |
| Claims | Freeze unresolved credit, refund, replacement or damage claims with value, due date and evidence. |
Controlled transition sequence
- Score the supplier with the supplier performance scorecard and confirm the exit reason is evidence-based.
- Check any active recovery item in the recovery follow-up calendar and claim value in the claim settlement tracker.
- Activate or validate replacement capacity with the backup supplier activation checklist.
- Freeze a clean specification package for the replacement supplier: drawings, sample photos, packaging, inspection standard, test reports and target quantity.
- Decide the exit path: finish current order under controls, split remaining volume, transfer the next PO, or stop immediately and restart sourcing.
Exit decision table
| Supplier weak but open order recoverable | Controlled finish — complete only with inspection, document and balance-payment gates. |
|---|---|
| Supplier risk rising + backup ready | Split transition — move new volume to backup while closing existing commitments. |
| Supplier fails evidence or claim obligations | Exit — stop new orders, preserve claim evidence and move the next PO elsewhere. |
| No verified replacement | Pause expansion — do not scale until a new supplier passes evaluation and sample checks. |
Copy-ready exit notice
We are freezing new purchase orders while we close the current open items and review replacement capacity. Please confirm the status of all open quantities, documents, tooling/assets, claim items and payment balances by the stated deadline. New order discussion will remain on hold until the evidence package is complete.