Difference Between Production and Manufacturing

Difference Between Production and Manufacturing

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Updated on Oct 31, 2022 09:43 IST

The main difference between production and manufacturing is that production is a process that may or may not use machines to create a finished good. On the other hand, manufacturing is a process that uses machines to create finished goods.

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This article will explore the difference between production and manufacturing in great detail. But, before we do that, let’s quickly go through the topics listed under the table of contents (TOC) that we will cover in this article.

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Table of contents (TOC)

Difference between production and manufacturing 

For a better understanding, let’s explore the difference between production and manufacturing in a tabular format:

Parameter Production Manufacturing
Use of machinery is necessary No Yes
Only transforms raw material into finished goods? No Yes
Transforms raw materials and partially finished products into finished goods? Yes No
Does the company own the raw material? Yes No. The company gathers the raw material.
The finished product is only in the form of goods No. Goods and services both. Yes
The nature of the finished product can be tangible or non-tangible Yes No. Only tangible
Creates a finished product that can only be used instantly? No. Instantly and later Yes
Every type of manufacturing is a production and vice-versa No. Every type of production is not manufacturing. Yes
Compulsory resources Men Machines and men
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What is production?

Production definition: Production is a process in which machines may or may not be used in order to transform input or intermediated into finished goods or services.

Production is a much larger term in comparison to manufacturing as it converts input or intermediated into finished goods or services. Hence, the finished product can be both tangible and non-tangible in nature. Various organizations may often describe the production as inputs and outputs. Where inputs are the raw materials or resources required by the organization to create a good or service, the output is the final product that the organization delivers to the customers. Let’s go through an example to understand the term “production” better.

Production example:

Tesla, a famous electric car company, requires a lot of metal and batteries to create its electric cars. So, here the input will be metal and batteries that the company uses to create parts for its car. And the output here will be the electric car.

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What is manufacturing?

Manufacturing definition: Manufacturing is a process in which a company acquires raw materials and uses machines in order to produce the finished goods.

We have to keep in mind that every type of manufacturing is a production, but not vice-versa. The main thing differentiating manufacturing from production is the man and machine setup. A company can manufacture a product that can either be sold directly as a final product or can also be sold to other manufacturing companies in order to produce items, such as appliances, pieces of equipment, and so on. Let’s go through an example to understand the term “manufacturing” better.

Manufacturing example:

Suppose there are two companies, A and B. A is a company that specializes in manufacturing wooden goods. But the A company requires wood in order to create the final product. So, it buys wood from company B in order to create wooden goods. Once it acquires the raw material (in this case, wood), company A manufactures wooden goods, such as tables, beds, wooden utensils, etc.

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Key differences between production and manufacturing

Here are the key differences between production and manufacturing:

  • The final product in production can be either goods or services, but the final product in manufacturing is always goods.
  • Production may or may not require man and machine setup; on the other hand, manufacturing requires both men and machines.
  • In production, the raw material may or may not have to be acquired by a company. Whereas in manufacturing, a company has to acquire raw materials in order to produce the final product.
  • Production is a process in which machines may or may not be used in order to transform input or intermediated into finished goods or services. On the other hand, manufacturing is a process in which a company acquires raw materials and uses machines in order to produce the finished goods.

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Conclusion

Now that you have understood the difference between production and manufacturing, you will be able to use these two terms better. You also have to remember that the production process is simple. On the other hand, the manufacturing process is quite complex because it involves multiple processing steps to produce the final product.

FAQs

What is the main difference between production and manufacturing?

The main difference between production and manufacturing is that production is a process that may or may not use machines to create a finished good. On the other hand, manufacturing is a process that uses machines to create finished goods.

In terms of the difference between production and manufacturing, machines are a must for which of these two processes?

Regarding the difference between production and manufacturing, machines are a must to create the final product for the manufacturing process.

In terms of the difference between production and manufacturing, which of these two processes produces a product that can be tangible or non-tangible?

Regarding the difference between production and manufacturing, the final product created through the production process can be tangible or non-tangible.

What is the difference between production and manufacturing costs?

Regarding the difference between production and manufacturing, production costs reflect all of the costs associated with a company's operations. In contrast, manufacturing costs represent only the expenses required to make the product.

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