Manufacturing vs Production

Difference Between Manufacturing vs Production

The key difference between Manufacturing vs Production is that Manufacturing is the process in which raw material is converted into the tangible products, whereas, the production creates utility as is the process in which article is made for the purpose of the consumption by combining the different resources.

What is Manufacturing?

Manufacturing can be defined as the production of merchandise for sale with the help of human resources, machines along with chemical and biological processes.

  • We can say manufacturing to be a series of steps where human resource is involved that includes basic small industries to technologically advanced ones. But the term manufacturing is apt in case of industrial production where crude resources convert into final products on a large margin.
  • These final goods can again be used for the manufacturing of complex products, for example, automobiles, household substances, ships, or aircraft. The manufacturer can sell these final goods to wholesalers.
  • The retailers buy from the wholesalers, finally selling them to consumers. If we consider a free market economy, then manufacturing refers to large scale production of finished goods, which sell on profit to consumers.
  • In the modern concept of manufacturing, all the intermediate processes of manufacturing are included, which are necessarily required for the production and integration of a product’s components. Engineering industries, as well as industrial designing industries, come under the manufacturing domain.
  • Some of the major manufacturers include GE, Procter & Gamble (P&G), Boeing, Pfizer, Volkswagen Group, Lenovo, Toyota, Samsung, etc.

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What is Production?

In economics, a “Production” function relates the physical process to physical inputs or factors of production. The transformation of inputs into outputs, with added value, is called production. The primary function of production is to address efficiency in the use of factor inputs in the function of production. Production means the conversion of resources of nature to finished goods to satisfy the human wants.

  • Production is actively directed towards the satisfaction of the wants of people by converting physical inputs to physical outputs.  The conversion can happen manually or with the help of machines. For example, we convert cotton to cloth, and for personal satisfaction, convert them into dresses.
  • The intangible services like service of the doctor, lawyers, etc. come under the theory of production in economics. So both tangible and intangible services are included in the production.
  • Production does not imply the creation of a matter. Production means creating utility out of the available resources. So production involves the creation of what the humans want from the available resources or raw materials.
  • So we can define production as the process through which a firm transforms inputs into outputs. It is the process of creating goods and services with the help of factors of production or inputs to satisfy human wants.

Manufacturing vs. Production Infographics

Here we provide you with the top 8 difference between Manufacturing vs. Production.

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Manufacturing vs. Production – Key Differences

The critical differences between Manufacturing vs. Production are as follows –

  • Manufacturing is the process where machines produce goods from raw materials. Production is the process of converting resources into finished products.
  • Manufacturing includes the production of goods which can be immediately sold off and are suitable for use. Production essentially means the creation of utility.
  • In the case of manufacturing, the use of machinery is mandatory, whereas, in the case of production, machinery is not essential.
  • For manufacturing, the output is tangible, whereas in production, the output which can be tangible or intangible.
  • In the case of manufacturing, both labor and machinery setup is mandatory, but in the case of production, only labor is necessarily required.
  • All kinds of manufacturing are considered to be produced, but all types of production are not considered manufacturing.
  • For manufacturing, the result is essential goods, but for production, the result may be goods or services.
  • In the case of manufacturing, raw materials need to be procured from outside. Whereas in the case of producing, the raw material is processed for getting the output, and procurement of raw material is not required.

Manufacturing vs. Production Head to Head Difference

Let’s now look at the head to head difference between Manufacturing vs. Production.

Basis – Manufacturing vs. ProductionManufacturingProduction
DefinitionManufacturing is the process of producing final goods with the help of men, machinery, raw materials, chemicals, and tools. Production is the process of making an output that is meant for consumption with the help of various resources.
Concept of the terms Raw materials are procured and processed to get finished goods. The company has ownership of the raw material, which is processed to get output.
OutputThe result is the goods.The result can be goods or services.
Nature of InputThe process of manufacturing is tangible. The process of production can be tangible or intangible.
Compulsory RequirementsFor manufacturing labor, machinery and material set up are essential.Machinery may or may not be required.
End ResultManufacturing results in goods that are ready to be sold; Production results in utility which can be used immediately or later;
InclusionsEvery type of production may not be manufacturing. Every type of manufacturing comes under production.
Process requirementManufacturing helps in the transformation of raw materials into finished goods.Production is that process where inputs are converted into outputs.

Final Thought

Production has no connection with raw materials and machines, as it is only the creation of utility. In contrast, manufacturing involves man, machines, and technology to produce final goods that can be sold off to consumers. The creation of a product is quite difficult in today’s world as the inputs have to go through many levels to become the output. Production only leads to the addition of utility to the consumers whereas in manufacturing proper coordination is required between the labor, machinery and the raw materials to obtain the finished goods

This article has been a guide to Manufacturing vs. Production. Here we discuss the top differences between Manufacturing and Production along with infographics and comparison table. You may also have a look at the following articles –

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