Materials are physical substancesand used as inputs to production or manufacturing. d "finishing processes to create "finished materials", ready for distribution and consumption.

An example of a raw material is cotton, which can be processed into thread, and then processed into cloth, a semi-finished material. Sewing and cutting the fabric turns it into a garment, which is a finished material. Steelmaking is another example—raw materials are extracted, refined and processed into steel, a semi-finished material. Steel is then used as an input in many other industries to make finished products.