Supplier Quarterly Business reviews
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It’s often said that supplier management is all about maintaining relationship and expectation.
When it comes to managing these relationships most organizations look to segment their supplier base into two groups – Significant spend and criticality and the rest.
For those that fall into that first group, there are various tools that can be used to maintain and develop supplier relationships; one of those is the Supplier Quarterly Business review or QBR as it’s often termed.
In this article we’ll take a look at what a supplier QBR is, why it’s needed, the pro’s and cons’ (not surprisingly not everything’s perfect in the world of QBR’s and we’ll give some hints on how to get the most from yours).
Supplier Quarterly business reviews – the basics
Most organizations will look to have some form of structured review with key vendors. QBR’s are often seen as a form of governance or performance measurement. They are held at regular intervals (often alternately at the sellers and buyers premises). The best ones follow a structured agenda and publish a set of actions/minutes.
Who attends?
QBR’s are usually attended by key stakeholders from the supplier (often a sales lead + technology/component specialist) together with the appropriate team from the buying organization (commercial lead, commodity manager + buyer). Periodically (depending on the suppliers criticality) other senior members of both parties will attend (often from outside the supply chain team).
What’s discussed at vendor quarterly business reviews.
A QBR will typically be based on an agreed agenda – this might include:
• Program status
• Commercial Status
• Performance status
• Joint improvement activities
• Key news/updates from both organizations
• Business coming down the line
• New products/offerings from the sales organization
Whilst there are some key concepts – there are no hard rules and most businesses adapt an agenda until they find what works (albeit it’s usually a mix of performance, commercial and strategy).
What’s the format of supplier quarterly business review?
Having been around various industries and seen these in practice my experience tells et that there are generally two formats – one with a published agenda and one which is a general chat (guess which ones works best?).
Without an agenda the teams will be ill-prepared, lacking data, waste time – rule no1 – get an agenda that works and share it in advance.
The general format is usually one of a set of information that’s based around the objective and past actions of the QBR. There’s usually room to cover performance, opportunities for more business, discussion of key issues and updates on both businesses.
Why are Supplier QBR’s critical.
QBR’s are such a useful tool because they offer a point in time to measure the relationship in a quantative and qualitive way. They demonstrate commitment (on both sides), engagement and demonstrate a willingness to build the relationship.
What works
• Being strict about the agenda
• Getting the right stakeholders around the table
• Appropriate agreed metrics for review
• A rolling actions list
• You’re the buyer – you lead the review. (don’t leave it to the supplier to generate the data).
• Publishing an actions list post review
• Including key VIP’s from your business as appropriate.
What doesn’t
• Meetings should be joint – not just supplier led (otherwise it turns into a sales presentation).
• Death by PowerPoint
• Unfocused agenda
• Performance related only.
• Failure to document (then share) captured actions
• QBR’s with non critical vendors
• Poor follow up
So there you have it, that’s our introduction to Supplier Quarterly Business reviews. Got any tips/tricks on this topic for our readers – be sure to use the feedback below.