When our company, Emballator Lagan Plast (ELP) decides on, what supplier they want and what they are expecting from them, they have a few priorities and parameters they use as guidelines for that decision. To be qualified as a material supplier for ELP, they expect the supplier to fulfill these demands: * Value for the money
* Short lead-time
* High quality
To get value for the price you pay is very important, that is also why that is a big priority on the check list of qualified suppliers. They need to get material that has high quality, but a reasonable price, basically to get as much for the money as possible, without negotiating the quality. A short lead-time is also very important. When the company places an order to the suppliers, they off course want the material as soon as possible. For ELP it is of great importance because they could get some big and unexpected orders that could lead to them running out of raw material. If they do not have it in stock they will have to order more and will need to relay on the supplier to deliver quickly from the time the order is set to actually getting the material delivered. That is also the point where availability comes in. The company needs to relay on that their suppliers are able to provide them with the material basically whenever they need it and be able to delivery it frequently. ELP wants their suppliers to be flexible in many different ways. For instance, they need the suppliers to be able to negotiate the price depending on quantity, how frequent the orders are and so on. ELP choose suppliers by doing a lot of research and comparing them to each other based on these parameters. If they have ten possible suppliers, they do the research and then they eliminate 80 % of them. They are then left with two suppliers they will use and buy material from. The longest contract ELP sign with a supplier is a...