In a strategic buyer and supplier relation, collaboration and communication are essential for success, and nowhere is this more important than in the Kraljic’s Matrix Strategic Quadrant. A quarterly business review (QBR) is a valuable tool that enables buyers and suppliers to work together more effectively and build stronger relationships. In this blog post, we will explore the benefits for the buyer of having a Quarterly business review with suppliers.

Benefits of Quarterly business review.

1. Improved performance: By meeting regularly with suppliers and reviewing performance metrics, buyers can identify areas for improvement and work together with suppliers to implement solutions. This can lead to improved quality, reduced lead times, and increased on-time delivery rates.
2. Better alignment: A QBR provides an opportunity for buyers and suppliers to align their goals and objectives. By working together to understand each other’s priorities and challenges, they can develop strategies that benefit both parties.
3. Cost savings: By reviewing performance metrics and identifying areas for improvement, buyers can often achieve cost savings. This may include reducing inventory levels, improving transportation efficiency, or streamlining processes.
4. Innovation: A Quarterly business review provides an opportunity for suppliers to share new ideas and innovations with buyers. By working together to identify new products, materials, or processes, buyers can stay ahead of the competition and provide value to their customers.
5. Strengthened relationships: By meeting regularly with suppliers and engaging in open and honest communication, buyers can build stronger relationships with their suppliers. This can lead to improved collaboration, better problem-solving, and increased trust.

Here is a suggested agenda for a Quarterly business review:

1. Introduction and review of the previous quarter’s performance
   1. Welcome and introductions
   2. Review of the previous quarter’s performance metrics
   3. Discussion of any issues or challenges that arose
2. Supplier performance review
   1. Review of supplier performance metrics, such as quality, lead time, and on-time delivery
   2. Discussion of any areas for improvement and action plans to address them
   3. Discussion of any new products or services that the supplier can offer
3. Buyer performance review
   1. Review of buyer performance metrics, such as forecast accuracy, inventory turns, and customer satisfaction.
   2. Discussion of any areas for improvement and action plans to address them
   3. Discussion of any new products or services that the buyer is planning to launch
4. Joint business planning
   1. Review of the joint business plan and progress against it
   2. Discussion of any changes in the business environment that may impact the plan
   3. Identification of any new opportunities for collaboration or improvement
5. Innovation and continuous improvement
   1. Review of any new technologies, processes, or materials that can improve performance or reduce costs
   2. Discussion of any ideas or initiatives for continuous improvement
6. Contract and relationship management
   1. Review of the contract terms and conditions
   2. Discussion of any issues or disputes that need to be addressed
   3. Discussion of any opportunities to strengthen the relationship
7. Next steps and action items
   1. Summary of the discussion and agreements reached
   2. Identification of any action items and responsibilities
   3. Agreement on the date and agenda for the next QBR

By following this agenda, buyers and suppliers can work together more effectively and build stronger relationships. A well-structured QBR can help to improve performance, reduce costs, drive innovation, and ensure the success of the business relationship.

A joint business plan (JBP) is a document that outlines the shared goals, strategies, and action plans of the buyer and supplier. A well-crafted JBP can help to align both parties’ efforts and ensure the success of the business relationship.

Here’s an example of a buyer-supplier JBP:

Objective: To increase sales and market share of Product X in the US market by 10% over the next 12 months.

Strategies:

• Develop a new marketing campaign to promote Product X.
• Increase the availability of Product X in the US market.
• Improve the quality of Product X to meet customer expectations.

Action Plans:

• Develop a new marketing campaign to promote Product X:
• Supplier to provide market research on customer preferences and purchasing behavior.
• Buyer to develop the marketing campaign based on the research findings.
• Supplier to provide Product X samples for the campaign.
• Increase the availability of Product X in the US market:
• Supplier to increase production of Product X by 20%.
• Buyer to increase the size of their order for Product X by 25%.
• Supplier to provide inventory management support to ensure Product X is always available.
• Improve the quality of Product X to meet customer expectations:
• Supplier to conduct a quality audit and identify areas for improvement.
• Buyer to provide feedback from customers on Product X quality.
• Supplier to implement a quality improvement plan based on the audit findings.

Performance Metrics:

• Sales volume of Product X in the US market.
• Market share of Product X in the US market.
• Customer satisfaction with the quality of Product X.

By creating a JBP together, the buyer and supplier can work towards a shared goal and ensure that they are aligned in their efforts. The JBP includes specific strategies, action plans, and performance metrics that will help both parties to achieve the desired outcome.

Overall, a quarterly business review is a valuable tool for buyers who want to improve performance, reduce costs, drive innovation, and build stronger relationships with their suppliers. By working together with suppliers, buyers can achieve their goals and ensure the success of their business.

Learn more about management of company categories in the courses about Category management:

Category management by EFFSO. The course will give you an introduction to the concept of category management and how to build a category management program.

Category Management – how to get started. This advanced course will help you with the first steps when implementing Category Management. The course include a broader explanation of Category management, the content of a first version of a Category strategy and key finding (checklists).

About Learn How to Source

Learn How to Source (LHTS) is an online platform based in Sweden, offering a range of procurement courses accessible globally. It serves as a community where procurement experts share their knowledge through online courses, designed for various experience levels from introductory to expert. Courses are concise, about 30 minutes each, and cover different aspects of procurement, tailored for different buyer roles. The courses focus on practical knowledge, presented by seasoned professionals, and includes quizzes and certificates. They can be accessed from any device, emphasizing microlearning for flexibility and efficiency.More about LHTS in Swedish.

Note: Illustration of “Quarterly business review and joint business plan” is created by CHAT-GPT on February 10, 2024.