When we think about copper wire manufacturing and distribution, our first thought is usually the supply chain.

Sure, the traditional supply chain is a big piece of the puzzle. It connects suppliers to manufacturers, distributors, and end users and helps raw materials become finished goods. If everything works smoothly, goods and services seamlessly move from one step to the next.

But as great as the supply chain is, there’s an equally important process designed to improve internal operations: the value chain. 

What Makes the Value Chain Different from a Supply Chain?

Understanding what the value chain brings to the table requires looking inward.

The value chain analyzes specific processes within a company’s business model to create advantages that set it apart from others in the industry. This could mean identifying ways to enhance or launch new products, investing in customer service initiatives, or implementing faster shipping methods.

Standard supply chains focus on completing shipments efficiently and effectively to keep the system running. The value chain helps companies find and fix inefficiencies to run better.

The Value Chain: Five Pieces to Success

Industry competition can be intense, especially with highly specialized products.

Customers increasingly demand high-quality products, competitive prices, and exceptional customer service. It’s not enough to win on price alone; today’s companies compete for loyalty more than dollars.

To set themselves up for success, companies rely on the value chain to target key opportunity areas. By breaking things down into smaller components, it’s easier to prioritize tasks to improve the company.

So, what are the five components?

Inbound Logistics – This covers everything from receiving raw materials and goods to inventory operations and warehousing. Examples of improving inbound logistics include working with sources to secure raw materials for the future and implementing Artificial Intelligence (AI) to track inventory.

Operations – This is a wide net, but operations cover everything about the product’s manufacturing and preparation for sale. Examples include creating initiatives to increase Overall Equipment Effectiveness (OEE), which measures productivity against the total time planned.

Outbound Logistics – Once items are ready, how will they get to distributors and end users? From distribution channels and trucking schedules to last-mile delivery, outbound logistics ensures the final product gets to its destination quickly.

Marketing and Sales – These teams work together to figure out how products and services are positioned in the market. They can identify cost advantages and combine traditional advertising with education and value-focused content.

Service – The job doesn’t end once items leave the facility. Service covers every part of the distributor and end user’s experience, including handling refunds, repairs, customer service, and more. It doesn’t matter how great the product is; if customers can’t resolve problems, they won’t stay loyal.

Not every company is good at all five competencies, but it’s possible with time and effort. And when problems occur, these five disciplines help determine where extra effort and oversight might be needed.

Support Structures Make the Five Pillars Stronger

Like Batman needs Robin, the five value chain pillars wouldn’t be nearly as strong without the help of support activities. These day-to-day processes spur change within the main competencies.

There are four support structures companies employ to improve the value chain, including:

Procurement – Where are raw materials or products coming from? In the case of an emergency or hiccup, is there a backup plan? How are the materials being received? Who ensures accuracy?

Human Resources – HR does more than hire and fire people. Turnover can leave a company struggling, but high-quality HR teams create systems capable of attracting top talent and keeping it. They also find methods to empower employees, helping them develop more skills that move the company forward.

Technical Development – When we talk about technical development, this includes everything associated with research and development (R&D). It often means designing new products, techniques, and production methods to create differentiators in the market. Investing in technical development also means retooling current procedures, machines, and methodologies to simplify and speed up the production process.

Infrastructure – You can have the best product on Earth, but it’s going nowhere if the company is a mess. Infrastructure encompasses everything the company is about. How does leadership work? Are the right people empowered to make the best decisions? Is there a cohesive strategy in place that allows the company to grow and thrive, even during challenging times?

Every single activity a company does daily affects the overall bottom line, though some are more immediate than others.

Direct activities, like sales and production, have an immediate and direct impact on a company. R&D and HR duties are designed to keep the company growing and moving forward operationally.

Within every department, safeguards ensure the company isn’t breaking any rules.

Strengthening the Copper Wire Value Chain

Like most things, improvement often isn’t about making wholesale changes all at once. It’s about focusing on bite-size upgrades over time.

Some changes will take longer to implement than others, but the goal – a better-performing company with a healthier bottom line – doesn’t change. For copper wire manufacturers and distributors, employing the five competencies might look something like this:

Inbound Logistics – Sourcing copper is vital for manufacturers to maintain a steady supply of wire. For distributors, knowing how much product is on hand can help avoid sunk costs lost in warehousing and inventory. It could also mean entering strategic partnerships when mutually beneficial to both sides, like what Aurubis and Codelco did recently.

Operations – Where can the manufacturing process become more efficient? How can downtime be reduced to keep machines running as much as possible? What can be done to make employees better? Answering these questions can increase OEE, save money, raise profits, and up production quality with fewer mistakes.

Outbound Logistics – Being fast is great, but high accuracy is better. Whether you’re a manufacturer or a distributor, understand how often shipments occur, what limitations might impact deliveries, and where they’re coming from.

Marketing and Sales – Customers don’t trust products, companies, and manufacturers they don’t know. Investing in marketing and sales ensures information gets in front of the right customers when they need it while creating a trove of educational and informative collateral. A good company’s sales and marketing teams can position the company as a partner rather than a vendor.

Service – This is all about delighting the customer. It means responding quickly to inquiries, correcting issues as soon as possible after they occur, and meeting quality standards long after the product has left the building.

Keep an Eye on the Big Picture

We’ve covered a lot of ground, but the value chain can be summed up simply: your business activities strive to effectively meet customer demand.

Unlike the supply chain, which features a lot of parts and pieces we can’t control, the value chain is totally within our power to change. That type of power can unlock doors for fast-paced growth, but it can also act as a blocker if the company takes too narrow an approach.

Don’t lose sight of the big picture because focusing on one skill area could leave other competencies lacking. If that happens, it might do more harm than good, despite the best of intentions.

Think of small ways to improve your company’s operations. Small steps today can lead to massive benefits tomorrow!

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