What are the main differences between the output of service industries and the products of manufacturing industries?

The key difference between Manufacturing vs. Production is that Manufacturing is when raw material is converted into tangible products. The production creates utility, as is how an article is made for consumption by combining the different resources.

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

• We can say manufacturing is a series of steps involving human resources, from basic small industries to technologically advanced ones. But the term manufacturing is apt in the case of industrial production, where crude resources convert into final products on a large margin.
• These final goods can again be used to manufacture 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 the large-scale production of finished goods, which sell for 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.
• Major manufacturers include GE, Procter & Gamble (P&G), Boeing, Pfizer, Volkswagen Group, Lenovo, Toyota, Samsung, etc.

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What is Production?

Production means the conversion of resources of nature to finished goods to satisfy human wants. 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 using factor inputs in the function of production.

• Production is actively directed towards the satisfaction of people’s wants by converting physical inputs to physical outputs. For example, we convert cotton into cloth and convert them into dresses for personal satisfaction. The conversion can happen manually or with the help of machines.
•  The intangible services like the 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 creating what 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.

Here we provide you with the top 8 differences 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 producing goods that 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 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 required.
• All kinds of manufacturing are considered to be produced, but all types of production are not considered manufacturing.
• The result is essential goods for manufacturing, 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 production, the raw material is processed to get the output, and the procurement of raw material is not required.

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

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. Creating 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. In contrast, proper coordination is required between the labor, machinery, and raw materials to obtain the finished goods in manufacturing.

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