Shared Savings Chemical Management has proven 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 assure and improve chemical performance. Financial incentives reward chemical volume reduction, promoting continuous improvements in chemical use efficiency. Responsibilities are divided according to the core competence and expertise of each party, reducing overall chemical costs and allowing the chemical user to devote more resources to its core business. Companies have structured their Shared Savings programs in a variety of ways, depending upon their own needs and circumstances.
Programs usually begin small, and expand as both parties build trust in each other.
The benefits have been dramatic, with significant decreases in chemical use and waste, as well as reductions in overall chemical costs. The success of Shared Savings has been demonstrated in many manufacturing plants, with some having over 10 years of experience. Some creative changes in Shared Savings may be needed to apply the strategy to smaller manufacturers, or manufacturers with a highly fluctuating production rate or product mix. However, it appears to be currently applicable to a large number of manufacturing plants throughout the world. The primary barrier limiting application of Shared Savings will be resistance to the types of changes this relationship entails.