Difference Between Manufacturing and Production


Main Difference

The main difference between manufacturing and production is that Manufacturing is a process of transforming raw material into a finished product by using many processes and Production is a process of converting inputs into outputs.

Manufacturing vs. Production

When the raw material is used as an inlet to produce goods with the use of machinery is known as a Manufacturing. The process of converting resources into finished products is known as Production. The ordinary use of the term production is in many conditions, within as well as outside an industry. Manufacturing, as opposed to this, commonly finds its use in the industrial sector. Production is a wide category that includes manufacturing, so it said that through all sorts of manufacturing fall in production, not all productions fall in manufacturing. A very clear definition of manufacturing is to form a product which is suitable for use; an example would be how steel mills make steel by using iron or how the furniture is produced using tree bark or wood. In both of these examples, something manufactured. Whereas the productions mentioned are manufacturing processes if we talk more precisely. So the bottom line is that tangible product produced or manufactured, but intangible products just produced.


Manufacturing comprises the generation of all those goods that are suitable for use, or it can be sold out. Whereas production involves the formation of the utility. In manufacturing, the use of machinery is essential whereas production is done with or without the use of machinery. All types of manufacturing activities used in production, but production may not necessarily be known as manufacturing. Man-machine set up should be there for the manufacturing of products, which is not in the case of production; the only man is sufficient for producing output.

Comparison Chart

The procedure of producing merchandise by using resources like labor, machines, tools, raw materials, chemicals, and others is known as a Manufacturing.Production is a procedure of making something used for consumption by combining various resources.
The concept of the term
Raw materials are created and processed to get finished goods.The business has ownership of the raw material which is processed to get output.
The result is the goods.The result can be goods or services.
Nature of Input
The process of manufacturing is tangible.The procedure of production can be tangible or intangible.
Compulsory Requirements
For manufacturing labor, machinery and material set up are essential.Machinery may or may not be required.
Manufacturing result in goods is that is ready to be sold.Production results in utility which used immediately or later.
Every type of production not deliberated as manufacturing.Every kind of manufacturing comes under production.
Process Requirement
Manufacturing helps in the conversion of raw materials into finished goods.Production is that process where inputs converted into outputs.
Creation of
Goods that are suitable for use.Utility

What is Manufacturing?

Manufacturing is the handling of raw materials into finished goods with the use of tools and processes. Manufacturing is a value-adding process enabling businesses to sell finished products at a premium over the value of the raw materials used. Humans have historically desired ways to turn raw materials, such as ore, wood, and foodstuffs, into finished products. By refine and processing this raw material into something more beneficial, individuals and industries have added value. This value addition increased the price of finished products, rendering manufacturing a profitable strive. People began to specialize in the skills needed to manufacture goods while others granted funds to businesses to purchase tools and materials. The quality and type of labor required in manufacturing vary according to the type of product produced. On one end of the spectrum, goods or products are manufactured by hand or with the use of basic tools under more traditional processes. This type of manufacturing is related to decorative art, textile or leather work, carpentry, and metal work. At the other end of the array, mechanization is using to produce items on a more industrial scale. Most manufacturing circles fit into one of five general categories:

  • Repetitive Processing: Repetitive processing has devoted production lines that produce the same or similar items consistently without change.
  • Discrete Processing: It based on whether the products produced are alike or very disparate.
  • Job Shop Processing: Job shop processing has specific regions, in place of production lines.
  • Process Manufacturing (Batch): The process can produce one batch or several, depending on requirements.
  • Process Manufacturing (Continuous): This kind of processing is like to repetitive, in that they run 24/7. The main difference is that the products are gases, liquids, powders, or mud.

What is Production?

Production is the organized activity of transforming means into finished products in the form of goods and services; the purpose of production is to satisfy the demand for such transformed resources. Since the primary objective of economic activity is to produce utility for individuals, we count as production during a period all activity which either forms utility during the period or which increases the ability of the society to form utility in the future. For general purposes, it is necessary to categorize production into three main groups:

  • Primary Production: Primary production is carried out by ‘extractive’ industries like agriculture, forestry, fishing, mining and oil extraction.
  • Secondary Production: This includes production in the manufacturing industry, viz., turning out semi-finished and finished goods from raw materials and intermediate goods
  • Tertiary Production: Industries in the tertiary sector produce all those services which enable the finished goods put in the hands of consumers.

Key Differences

  1. Manufacturing is that procedure where machines are used to produce goods from raw materials whereas production is that procedure of converting the resources into finished products.
  2. In manufacturing, the use of machinery required whereas in production machinery may or may not be used.
  3. In the case of manufacturing both labor and machinery setup is obligatory but in the case of production, only labor essentially required.
  4. Manufacturing comprises the production of goods which can be immediately sold off and are suitable for use. Production essentially means the creation of utility.
  5. For manufacturing, the output which formed is tangible whereas in production the output which obtained can be tangible or intangible.
  6. All kinds of manufacturing are deemed to be production, but all types of products not considered
  7. In manufacturing, the raw material needs to be procured from outside whereas in producing the raw material is processed for acquiring the output and procurement of raw material is not required.


Origination of a product is quite difficult in today’s world as the inputs have to go through many levels to become the output. Manufacturing proper coordination is needed to obtain the finished goods whereas production only leads to the addition of utility to the consumers.