Cleaner production from chemical suppliers: understanding shared savings contracts

The ‘chemical chaosʹ experienced by many companies today can be linked, in part, to chemical supply strategies that have not kept pace with changes in the business environment. The traditional chemical supply relationship has incentives that promote waste and expand the ‘hiddenʹ cost of chemicals. ‘Shared Savingsʹ, an innovative alternative to traditional chemical supply relationships, has proved effective in reducing both waste and the overall costs of chemical use. Supplier revenue is linked to chemical performance, rather than chemical supply, harnessing the resources of the supplier to ensure and improve chemical performance. Five manufacturing plants, with over 35 years of combined experience with Shared Savings, are profiled.