Gainshare/Cost Savings Incentive
A monetary incentive where a buyer and supplier share in costs savings. The focus is on driving out costs that are of limited value and sharing the costs savings. The concept provides an incentive to both the buyer and supplier organizations to focus on continually re-evaluating, re-energizing, and enhancing their business relationship. All aspects of value delivery are scrutinized, including specification design, order processing, inbound transportation, inventory management, obsolescence programs, material yield, forecasting and inventory planning, product performance and reverse logistics. The focus is on driving out limited value cost while protecting profit margins.