Manufacturing vs Production

Difference Between Manufacturing vs Production

What is Manufacturing?

Manufacturing can be defined as the production of merchandise for the purpose of 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 are converted into final products on a large margin.
• These final goods which are produced can again be used for 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 are profitably sold to consumers.
• In the modern concept of manufacturing all the middle processes of manufacturing are included which are essentially required for 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.

What is Production?

In economics, a Production function relates physical process to physical inputs or factors of production. The transformation of inputs into outputs where the value is added is called production. The main function of production is to address efficiency in the use of factor inputs in the function of production. Production means 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 help of machines. For example, we convert cotton to cloth and for human satisfaction, it is made 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 basically means creating utility out of the resources what is available. So production means 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 that 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

Manufacturing vs Production – Key Differences

The key differences between Manufacturing vs Production are as follows –

• Manufacturing is that process where machines are used to produce goods from raw materials. Production is that process of converting the 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 case of production machinery may or may not be used.
• For manufacturing, the output which is formed is tangible in nature whereas in production the output which is obtained can be tangible or intangible.
• In the case of manufacturing both labour and machinery setup is mandatory but in the case of production, only labour is essentially required.
• All kinds of manufacturing are considered to be production but all types of production are not considered as manufacturing.
• For manufacturing, the end result is essential goods but for production, the end result may be goods or services.
• In the case of manufacturing, the raw material needs to be procured from outside whereas in 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 Production		Manufacturing		Production
Definition		Manufacturing 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 which 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.
Output		The end result is goods.		The end result can be goods or services.
Nature of Input		The process of manufacturing is tangible in nature.		The process of production can be tangible or intangible.
Compulsory Requirements		For manufacturing labour, machinery and material set up are essential.		Machinery may or may not be required.
End Result		Manufacturing results in goods that are ready to be sold.		Production results in utility which can be used immediately or later.
Inclusions		Every type of production may not be considered as manufacturing.		Every type of manufacturing comes under production.
Process requirement		Manufacturing 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 whereas manufacturing involves man, machines and technology to produce final goods which can be sold off to the consumers. 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 labour, machinery and the raw materials to obtain the finished goods

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