Quarterly Business Reviews, also known as “QBRs” are a critical piece associated with any successful supplier relationship program. While interacting with clients and suppliers, a concerning trend often identified is that many organizations seem to lack any strategic level of relationship management once a long-term agreement has been put in place between two parties. In other words, a supplier’s contractual agreement is essentially put on “auto-pilot” with minimal oversight until it is ready for renewal. This is a critical misstep that organizations should avoid, much like not taking your car to the mechanic for a check-up, not having check-ups scheduled with your contracted supply base will lead to an inevitable breakdown of expectations between both sides overtime. This blog will help explain how establishing QBRs with a supplier for 1 hour per quarter will help save your organization countless hours and dollars via strategic alignment and corrective action.
Suppliers to coordinate QBRs with
If you are an organization with a large umbrella of suppliers providing a wide array of services, QBRs simply are not a viable solution for every supplier that is under contract. The goal here is to identify what I like to call “mission-critical” suppliers that your organization relies on for success. In other words, that supplier’s success leads to your success. Keeping a pulse on these key suppliers will not only ensure continuous progress is occurring, but it also helps drive home the fact that accountability and open communication is an expectation for all parties involved. For contracted suppliers not associated with mission-critical pieces of your operation, annual reviews are an excellent alternative to ensure goals and expectations are still being met.
QBRs and contracting
After identifying your mission-critical suppliers that will require QBRs, it is important to ensure your contractual agreements are crafted in a way to help manage expectations for these reviews moving forward. Another way to look at this – If it is important to you, make sure it is in the agreement to ensure all parties are on the same page. The agreement should clearly highlight required KPI reports and other trackable metrics that must be provided on a quarterly basis for the team’s review. This type of reporting can easily be tied back to prior reports which will allow for simple trend identification and problem solving for any potential pain-points.
What should be discussed during a QBR
Create a clear concise agenda with critical talking points to ensure all topics are given ample time for review. It is also important to ensure you invite key decision makers and critical stakeholders only, this will allow for quick and easy alignment regarding any strategic level concerns due to the organizational hierarchy already being present.
A critical piece that should be included in your agenda is the discussion and review of KPI reports that were negotiated at the onset of the agreement. While KPI metrics vary greatly between categories, a few metrics that tend to provide value include topics such as: Financial Performance, Customer Satisfaction, Business Processes and Organization Growth/Forecasting.
Next steps after a QBR
Get the next QBR on the calendar! You would be shocked how difficult it is to have all calendars align between both parties when many members on the call are a part of senior leadership. Utilize this time to have everyone open their calendars prior to ending the meeting to establish the date and time for the next QBR. You also want to take the time to assign actionable deliverables and goals not only for the next QBR but for any pain-points identified during this meeting that require immediate corrective action. Be sure to assign due dates and do not forget to send out an update at the end of the meeting reminding everyone of their assigned action items and delivery dates.
The end goal of a QBR is to essentially have this supplier perform better for you than for your competitors. Chances are your competition is utilizing this supplier in some capacity as well, as a result going through the process of creating trackable metrics to help manage expectations on a quarterly basis will ensure this supplier performs better for you than your competitors.