Pursuing risk-sharing, gain-sharing arrangements

Risk-sharing, gain-sharing arrangements represent a progressive market strategy for suppliers to pursue selectively. It is not for everyone, suppliers or customers. Taking the supplier's point-of-view, this article describes a process for determining the suitability of this type of arrangement. The article draws on a series of examples from the hospital supply marketplace, which has experienced widespread early adoption of these kinds of risk-sharing, gain-sharing arrangements. Although not yet as prevalent in other supplier and customer markets, there are instances in other industries where supplier and customer firms have already successfully implemented these arrangements.