A company’s physical resources consist of all the tangible assets it owns and uses, such as land, manufacturing equipment, and office equipment. Information technology and its associated hardware, including computers, networks, and servers, fall under the category of physical resources.
Depending on the nature of the firm, physical resources may consist of a vast array of distinct things and objects.
Real estate, structures, water and water rights
Industrial machinery and equipment
Transportation and distribution networks
IT hardware and software
Certain physical assets are unique to a certain industry. For instance, livestock, feed, and crop reserves are unique to the agricultural industry. Depending on the nature of the industry, physical assets may be more or less essential. Physical assets often necessitate a large financial investment. A vehicle company must make substantial investments in production facilities that can only be located in a suitable location, whereas a tiny software developer can set up shop in any of the available office spaces at a competitive rate.
Even in the world of information technology, where physical infrastructure can affect issues such as power consumption and environmental requirements such as cooling systems for computer systems, the efficient management of physical resources is crucial.