MATERIAL RESOURCES OF COMPANIES: ADMINISTRATION AND CLASSIFICATION - JOB - 2024

The material resources of a company are all the tangible assets that it has at the time of carrying out its activity. These may include buildings, raw materials, land, machinery, office supplies, computer equipment, vehicles, among others.

All of these directly or indirectly influence the production process of the company. That is why they have to be looked at with a magnifying glass and managed correctly in order to increase productivity and, therefore, achieve the primary objective of the organization: maximize profit.

Good management of these can depend on whether an organization functions efficiently and successfully or, on the contrary, fails and has continuous losses.

Therefore, it is essential to pay attention to the administration and integration of these materials when planning the activities of the organization.

Administration

The organization, as an entity with the objective of maximizing its profit through efficient use of its resources, must manage resources carefully. Otherwise, poor management can lead to losses, delays, and stock problems.

Therefore, the three questions to ask are the following:

- How to improve the result with the same materials?

The solutions here could be in the quality of the materials, or the improvement of productivity.

- How to reduce the materials obtaining the same result?

Reduce the consumption of materials, reusing, eliminating the unnecessary ones, and carrying out a detailed planning of the really necessary materials.

- How to reduce the materials improving the result?

This would be the most ambitious goal, and it can be achieved through a combination of the two previous solutions.

In this sense, there are various techniques to implement in a company in order to achieve the above results:

Inventory control

Monitoring the organization's inventory is essential to manage stocks and increase utility, thus increasing their efficiency.

Material requirement planning (MRP)

With this system it is possible to find out the necessary amount of materials, parts and components when generating a specific final product. With this we will reduce the cost of unnecessary materials.

Quality controls

It is necessary to evaluate the quality of the different materials in order to offer the best possible good or service. In this way, lower quality materials can be substituted, increasing utility and, with it, the bottom line.

Recycling and reuse of materials

Reusing materials, either to produce with these other products or directly, is a good way to reduce costs.

It is necessary to ensure that with this reuse or recycling the material resource does not lose quality, affecting the final result in a negative way.

Integration

Integration is the function by which the resources that are needed to execute the plans and activities of the organization are decided and obtained.

In the case of material resources, the objectives of integration are the selection of reliable suppliers that guarantee continuous quality in the supply of materials and compliance with optimal times, as well as periodic monitoring.

The materials have to be organized in warehouses, either for raw materials of goods in process or final goods.

Steps to follow to achieve the integration of material resources

1- Define the needs and qualities of the resources in question.

2- Establish quality standards, times and the attributes of the materials.

3- Determine where the materials are going to be obtained.

4- Select the best provider based on the previous study.

5- Choose the resources based on the previous standards.

Types of business material resources

Within the material resources, these can be divided into two types: transformation goods and utilization goods.

Transformation goods

They are those that are manipulated and used for the production of other goods. These can be used directly or indirectly.

In a direct way

They are directly manipulated in the process of generating other goods; for example, machinery, computer equipment, raw materials or tools.

Machinery

All the machines used in the organization that are used to produce consumer goods would enter here. For example, a machine to produce clothes in a textile factory.

Computer equipment

All equipment used in the activity of the company, such as computers or tablets.

Raw Materials

Raw materials are the resources that are obtained directly from nature, which will later be used in the production of the final goods of the organization. Some examples could be wood, iron, energy, water or oil.

Depending on their origin, they can be divided into vegetables (wood, cotton, wheat…), animals (wool, leather, meat…), minerals (iron, bronze, steel…), liquid and gaseous (water, oxygen, nitrogen…) and fossils (oil, natural gas, coal…).

Tools

It includes the tools that are used in the production process; for example, hammers, nails, screws…

Indirectly

Land, buildings or vehicles are materials that indirectly influence production. If they did not exist, production would be greatly affected, even becoming impossible in many cases.

Land

The land where the company's facilities are located is part of its material resources.

Estate

The buildings, factories or offices that an organization has.

Transportation elements

If the company has vehicles used at some point in the production process, these are also material resources; for example: trucks, delivery vans, employee cars, etc.

Utilities

They are those that are used in themselves for sale or consumption. These include stocks or office supplies.

Stocks

If the organization markets physical goods, all the inventories it has are part of the material resources.

Office supplies

Includes the consumable materials of a workspace, such as paper, pens, ink, and so on.

References

1. Julián Pérez Porto and Ana Gardey. Published: 2010. Updated: 2010.
2. Definicion.de: Definition of material resources (definition.de/material-resources/)
3. Koontz, Weihrich, Cannice. "Administration: A Global and Business Perspective"., 13th Edition, Ed. Mc Graw Hill, Mexico, 2008
4. Munch Galindo, Lourdes. "Administration, Organizational Management, Approaches and Administrative Process"., Ed Pearson, 1st edition, Mexico, 2010
5. Munch Galindo Lourdes / Garcia Martinez José J. «Fundamentals of Administration»., 9th Edition, Ed. Trillas, México, 2012
6. Reyes Ponce Agustín. "Modern Administration"., 3rd Edition, Ed. Limusa, México, 2007