However, a clothing production company may use machinery or manual labor to convert cotton into cloth. For example, a desk manufacturer may use heavy machinery to cut lumber for its desks. Manufacturers also use raw materials to create goods, while production companies transform resources into new products. Production companies use machinery to create goods and services, but they can also create items using human labor instead of equipment. Manufacturers produce their finished goods using tangible processes, such as physical labor or machinery. While both manufacturers and production companies create their final products before they can use or sell them, their creation processes differ. Related: What Is Resource Management and Why Is It Important? Creation Since production typically specializes in creating, converting and building materials, it's more common for a production company to create its own resources. A clothing production company, however, can grow its own cotton or other materials to make clothing. For example, a desk manufacturer may create its own desks, but it likely buys its lumber from an outside seller. Production companies typically have access or ownership of their resources, while manufacturing companies buy their materials from other sources. Manufacturers and production companies also differ in how they purchase their resources. Production, however, uses both tangible raw materials and intangible resources, such as money or credit. Manufacturing uses tangible raw materials to create goods, such as lumber or minerals. Resources refer to the materials necessary to create a good or service. Related: Production Process: Definition and Types for Businesses To Use Resources The fundamental difference between these processes includes manufacturing's ability to create only goods, while production can create both goods and services. In comparison, the purpose of manufacturing aims to produce tangible goods or merchandise through raw materials, labor and other equipment or technology. The purpose of production aims to create goods or services, both tangible and intangible, through means of materials or resources. Here's a list of ways that production and manufacturing differ: Purpose Related: 6 Types of Manufacturing Processes Production vs. After the builders complete the desks, the manufacturer can sell them to wholesale companies and retailers so that customers can purchase these desks. Once it has lumber, it can hire employees to create the desks. For example, a desk manufacturer may source lumber for its desks. Manufacturing companies often use a multi-step process to create goods. There are many types of manufacturing, including: Manufacturing requires human labor, equipment or technology to create goods and products that companies can immediately sell. These resources or raw materials only include physical items, such as lumber, minerals or coal. Manufacturing is the process of creating tangible goods or products from raw materials by using machinery and equipment. Related: What Are the Factors of Production? Definition and Examples What is manufacturing? The company can then use those parts to produce a car, which is the output. For example, in a car production company, the input includes the metal that the company uses to create car parts. The input refers to the raw materials or resources that a company uses to create a good or service, and output includes the final product that the companies deliver to the customers. Production can create both tangible objects, such as products, and intangible objects, such as services.Ĭompanies often define production as inputs and outputs. These companies can also convert resources into products necessary to create other goods. A production company can specialize in creating goods like mobile devices or backpacks and services like housekeeping. These items may include raw materials, money, investments or partially finished products. Production is the process of converting different items, components or products into other goods. In this article, we discuss production and manufacturing with a definition for each and list several ways that these two processes differ. Individuals with an interest in entering a field or joining a company that handles the creation of merchandise can benefit from understanding the differences between the processes of production and manufacturing. However, these two types of businesses also feature distinct characteristics for their resources, processes, outputs and goals. Both production and manufacturing companies work to provide the creation and sale of goods and services.
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