The direct raw material It is that which is part of the final product, that is, it is easily identifiable and is physically present in the composition of the finished product once the manufacturing process has finished.
These materials usually represent a high percentage of the cost of making the good. The term raw material can be defined as all that substance, element or component that is used in the manufacture of goods and products..
Generally, the raw materials are natural resources such as oil, wood, iron and others. These materials are often pretreated or altered in various processes, before being used as manufacturing components..
This approach becomes evident when considering that elements such as lead are used in the manufacture of batteries or the polymers that are used to manufacture plastic..
In the case of car manufacturers such as General Motors, Ford and Toyota, the use of raw materials such as steel, plastic and tires are common elements for the assembly of vehicles..
Raw materials are also known as commodities and represent a large part of international trade operations today.
Some examples of direct raw materials are: the wood used to build a table, the flour used in baking bread, the syrup used in the preparation of carbonated drinks and the steel in the manufacture of automobiles..
Direct raw materials vary according to the nature of the company and the good manufactured. For example, for Hewlett-Packard and Dell Computer the list of direct raw materials includes plastic, glass, hard drives, and processing chips..
On the other hand, indirect raw materials are those that, despite not being able to be present in the finished product, are necessary to manufacture the desired good. The distinguishing feature of this type of component is that it does not physically become part of the finished product..
Examples of indirect raw materials are: lubricants, electricity, gas and other elements, which are used regularly to guarantee the operation of machinery and equipment that are used in production processes..
As the components with the highest cost for the manufacture of goods and products, direct raw materials play a relevant role in any production process and consequently are determining factors in defining the economic situation of nations..
One of the key factors for the success of the economy of any country is determined by:
North America is a good example of the above. Among the large industries present in this section of the continent are the automobile manufacturers Ford, Chrysler and General Motors, the aircraft manufacturer Boeing and Microsoft, a world leader in information technology..
For its part, Canada enjoys great wealth, mainly derived from the extraction and export of raw materials.
A country that has a large amount of natural resources will not require large investments to import large volumes of direct raw materials.
Additionally, these materials can also be exported if they are production components that are attractive for economic activities that take place in other locations..
To illustrate the concept of direct raw material, it may be convenient to identify the different elements that are added in the assembly lines or in the production cycles of the companies..
Once the direct raw materials are received within the warehouses of the companies, they may or may not require additional work to be inserted into the production chain. Later, these elements or materials are included in the different stages of the process..
The inclusion of the component can be done through a simple assembly or require the use of physical-chemical methods that allow the component to be coupled to the product being manufactured..
Direct raw materials are typically treated at the accounting level as a cost rather than a good or piece of inventory..
In this way, it is possible for financial analysts to track the amount of resources that the company spends on the production of a good and subsequently take measures to optimize the production process..
Below are some of the direct raw materials used by three important companies from different lines of business:
The Harley Davidson company orders different raw materials such as cast iron sheets and pipes from its metal suppliers. Subsequently, these components are treated, molded, welded and chromed to be converted into exclusive exhaust pipes..
Although the exhaust pipe is completely finished, the motorcycle is still incomplete, it is a work in progress, so the exhaust part must be considered as a direct raw material. It should not be forgotten that the ultimate goal is the presentation of a Harley Davidson motorcycle.
According to the above, the handlebar, the fenders, the pipes, the gas tank and the windshield represent direct raw materials used in the production of a motorcycle. All these components are essential to manufacture the finished product.
Some of the direct raw materials commonly used in the manufacture of Nike Shoes are listed below:
The sole of sports shoes marketed by Nike usually have at least three layers: insole, midsole and outsole..
The template is regularly a thin layer of artificial ethyl vinyl acetate (EVA).
The components of the midsole, which provide most of the cushioning, vary from one model to another, but usually contain polyurethane surrounded by different materials such as liquid silicone, polyurethane foam, among others..
The outsole is often made of a mixture of natural rubber, synthetic rubber and different chemical compounds that provide different degrees of flexibility and resistance according to the design to be manufactured..
Some of the components or direct raw materials that are easily identifiable in the Iphone 6S are the following:
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