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Difference between Manufacturing and Production

how production is different from manufacturing

Though the terms production” and “manufacturing” may sound similar and be used interchangeably, they are very different from each other. Both are methods of obtaining finished goods or output from some kind of raw material. Only the process adopted and tools used are different. Although, there is a thin line of difference amongst the two and the points of differences are significant. If you are also curious about what puts the two apart, then this blog is a must read for you as it elaborates the differentiating features for a better understanding of both manufacturing and production.

What is manufacturing?

Manufacturing is the process of creating tangible goods by processing raw materials using machinery. Manufacturing is often undertaken on a large scale and manufactured products are sold to the public with the intention of fulfilling demand. These products can range from a hairpin to a car and a jar of jam to an aircraft. Manufacturing requires a workforce, equipment and technology to produce goods for mass consumption. Manufacturing can be understood as a subset of production.

What is production?

Production is when value is created by processing raw material, components or human efforts. Everything ranging from financial products, medical services, manufactured goods, software products etc. can be considered under the umbrella of production. The results of a production process can either be tangible or even intangible. The resources used in production are often called inputs and the results obtained are termed as output. Production can result in tangible or intangible value for the customers.

Points of difference between manufacturing and production

Definition: While Production converts inputs or intermediates to a final output or services, which may or may not use machinery, Manufacturing is the process of transforming raw materials into finished goods, by deploying various sequential processes, labour, and machinery.

Type of Input or Raw Material: In the case of Manufacturing, the company outsources the raw material or procures it from some vendor, and then finally processes it to derive the final product. However, in the case of Production, the raw material may or may not be procured from outside, but the company owns it and after specific processing, converts it into the final product.

Nature of the products: The result of Production can be in the form of both goods and services, which can be either tangible or intangible. Whereas, the outcome of Manufacturing is only a finished good, ready to be sold in the market. It is a tangible product.

Scope: Production is a broader term that includes bigger perspective and a larger outcome. On the other hand, Manufacturing is a term with limited scope and smaller resulting spectrum.

Resources Used: Men, machine, and materials are required to carry out Manufacturing process, whereas, only labour may be enough to bring the output in Production

Range: It can be conveniently said that every type of Manufacturing is Production but every Production is not a Manufacturing.

Example: producing bakery goods is manufacturing. Moreover, designing and creating a turbine by various processes is Manufacturing. However, assembling the various parts of an engine that can be a part of the turbine is Production.



What is difference between Manufacturing and Production

Undoubtedly different, both production and manufacturing also have a different set of challenges. While production is quite simple and multi-step process of converting the input to output, manufacturing is equally complex as it involves multiple-staged processing to obtain the final product. Coordination of men, machine, and the material is required to a great precision in the manufacturing process, which needs an expert technical support like an Enterprise Resource Planning or ERP software. ERP is a tool that connects all the processes end to end for a better operational efficiency and effectiveness in manufacturing operations. In order to explore more on ERP’s for the manufacturing industry, log on to



Sanjay Panjwani

Sanjay Panjwani is the Managing Director at BatchMaster Software, the leading provider of enterprise software solutions for process manufacturing industries. He’s on a mission to solve business challenges through innovation in ERP solution suites. You can connect with him on LinkedIn.