Manufacturing vs Production: How These Processes Differ

Many people assume that manufacturing and production are the same. As a result, the terms are used interchangeably when referring to business-related creation processes. While manufacturing and production have similar fundamentals, though, they are two unique processes. So, what’s the difference between manufacturing and production exactly?

What Is Manufacturing?

Manufacturing is a multi-step process that involves the conversion of raw materials into finished products using machinery. Manufacturing companies, of course, operate by taking raw materials and converting them into products. The raw materials are cut, sizes and/or shaped to create a new and finished product.

Humans have been using tools to convert raw materials into finished products for thousands of years. With that said, the modern manufacturing industry didn’t emerge until the Industrial Revolution. In the late 18th century, companies began using machines to manufacture large volumes of products, resulting in a new era for manufacturing.

There are over a dozen different manufacturing methods, some of which include:

  • Fabrication
  • Prefabrication
  • Rapid manufacturing
  • Agile manufacturing
  • Lean manufacturing
  • Flexible manufacturing
  • CNC manufacturing

What Is Production?

Production, on the other hand, refers to the conversion of inputs, including raw materials and partially finished products, into finished products. More importantly, production is a broader term that encompasses the financial activities of a company as well as other non-tangible elements.

Based on that definition alone, it’s difficult to discern how manufacturing differs from production. To better understand the differences between these processes, you must look at what exactly they convert. Manufacturing only converts tangible items, such as raw materials, into finished products. In comparison, production converts all types of input into finished products. While production may convert raw materials and partially finished products into finished products, it may also convert money, credit and labor into finished products.

The term “production” refers to the conversion of input into output. It’s similar to manufacturing, except production isn’t restricted to tangible items. It converts all types of input — even non-tangible types — into finished products.

In Conclusion

Manufacturing and production both involve the creation of finished products, but don’t let that fool you into thinking these two processes are the same. Manufacturing focuses exclusively on the conversion of tangible items like raw materials into finished productions, whereas production includes non-tangible items in the conversion process. Both processes are designed to create finished products, which companies sell for a profit. The difference is that production is a broader term that encompasses both tangible and non-tangible items.

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