We explain what the material resources of a company are, how they are classified, examples and other types of business resources.
What are material resources?
It is known in business administration as material resources. set of physical and tangible assets that form part of the company's assets and which are available in one way or another throughout the production process.
These types of resources are essential for any form of organization, and they are the ones that add the most value to the company. If necessary, some of them can be sold to convert them into liquid money (that is, financial resources).
The material resources of an organization contribute directly to the production circuit. In some cases they are its raw material, or machines and tools responsible for its transformation. In other cases they fulfill other functions: cars for transportation, containers for raw materials or for the manufactured product, etc.
Energy, essential in all industrial activity, is part of material resources, although it is not really something that is possessed, but rather is consumed.
See also: Factors of production
Types of material resources
The material resources of any organization are classified into:
Transformation goods. Those material resources whose destiny is to be transformed throughout the productive circuit, that is, that change their form, physical state or composition, to give rise to new materials. In turn, they can be classified into:
- Non-renewable material resources. Those that are consumed during the industrial process and that must be replaced, but whose existence can perfectly run out. For example: oil, coal.
- Renewable material resources. Those that are also consumed during the industrial process, but whose replacement is easier in the medium term, especially if the necessary measures are taken to guarantee it. For example: skins, wood, organic matter, electrical energy.
Fixed assets. Those material resources that are used directly or indirectly in the production circuit, but that are not consumed when used, but rather are responsible for imposing the transformation on the raw material. Such is the case of machines, tools, and transport vehicles.
Examples of material resources
The simplest examples of material resources of a company are:
- Raw material which through the industrial process will be transformed into finished or semi-finished products to be supplied to third parties.
- Machinery and/or tools used by workers, are those that allow the production process to be carried out physically. However, they do not belong to the worker, but to the company.
- Movable property and office objects such as tables, chairs, desks, shelves, sideboards, billboards, and a long list of everyday supplies.
- Vehicles. Different types of vehicles and automobiles that belong to the company and allow the movement of supplies, personnel or the goods produced themselves (distribution).
- Energy and fuel essential to power machines or vehicles and be able to carry out the work. They are usually supplied by third parties and consumed constantly.
Other resources of a company
In addition to material resources, every organization has resources of different types, such as:
- Human resources. It refers to the group of workers who participate in productive or administrative activity, and whose work keeps the company going.
- Technological resources. It refers to know-howthat is, the specialized knowledge that is put into practice in production, as well as the set of equipment that is required to do so.
- Financial resources. It refers to the money available and the resources that allow the company to obtain it, in order to finance its own productive activity and remunerate its workers.
References
- “Material resources” in the Economic Zone.
- “Human, technical and material resources” at the Spanish Agency for Food Safety and Nutrition (Spain).
- “Material resources” (video) on Sudy.com.
- “Company resources” in Economic Point.
