ABSTRACT
This chapter presents examples from manufacturing plants belonging to General Motors Corporation, Ford Motor Company, Chrysler Corporation and Navistar International. The co-operative interaction between Shared Savings and accounting practices can be illustrated using the environment-related management accounting pyramid. Shared Savings chemical supply programmes go hand-in-hand with environmental management accounting practices to continuously reduce chemical-related costs and improve environmental performance. In fact, improvements in the chemical supply relationship and in the quality of accounting information are synergistic. The use of a fixed fee drives the supplier to work continuously on cost reduction in this performance expectation component of the chemical cost iceberg. In addition, financial incentives are used to drive continuous chemical cost reductions. The Chemical Management Services programme has driven continuous improvements in the quality of data related to chemical use and costs. Most companies transfer chemical management responsibilities at the loading dock.
