The terms “production” and “manufacturing” are often used interchangeably to refer to the processes used to create consumer goods. In the average conversation between laypeople, there isn't much difference between production versus manufacturing. However, they don't actually refer to the same thing. Technically, there's more than one distinct difference between production and manufacturing.
What is Production?
Production is the process of using material and non-material inputs to create consumable utilities. Put in more relatable terms, production is any process used to create consumer goods from raw materials and human effort.
To illustrate one way the production process can be used to create consumer goods, follow the path of Salty Sombrero corn tortillas:
Producing these corn tortillas starts with the cultivation and harvesting of corn. The corn is then soaked in an alkaline solution to make it more malleable and improve its taste, then it is dried and ground into flour. The flour is mixed with salt and water to create dough, which is then separated into individual balls. Each ball is flattened, then cooked. The finished tortillas are then packaged and sent to a distribution center, which then transports them to grocery stores.
In this example, the material inputs used to create the tortillas are:
The non-material inputs are:
- Workers’ labor.
- Knowledge of tortilla production methods.
- Proprietary techniques that differentiate Salty Sombrero brand tortillas from competing brands.
The packaged, ready-to-eat tortillas are the utility in this scenario, the output created from the inputs of raw materials and human labor. Not all produced utilities are products ready for human consumption; sometimes, they're parts or ingredients the consumer uses to build or create the final product. For example, Salty Sombrero could finish its production line after grinding the processed corn into flour and sell the corn flour directly to consumers.
What is Manufacturing?
Rather than viewing the difference between production and manufacturing as a discussion of production versus manufacturing, it's easier to understand these two concepts as related micro and macro processes.
Manufacturing is a specific type of production that generally involves the use of machinery. Although it's possible to manufacture certain goods using only human labor, the most common manufacturing setup is a man-machine setup. In a manufacturing plant, goods can be produced from raw materials or from manufactured parts.
Production vs. Manufacturing
So what's the difference between production and manufacturing? Production is a broader term. Manufacturing is a production method, but not all production methods are instances of manufacturing. Other production methods include:
Using the tortilla production example from earlier, the raw materials went through multiple types of production to ultimately become packaged tortillas sold on grocery store shelves. Soaking the corn in alkaline, grinding it to make flour and mixing the flour with water and salt to make dough are three types of processing the corn underwent on its journey to becoming tortillas. Then, the dough was assembled into tortillas and cooked, another instance of processing, before being packaged. Because these steps all occurred within the Salty Sombrero manufacturing ecosystem, the process as a whole can be referred to as manufacturing.
In this example, the difference between manufacturing and processing can be unclear. When manufacturing tortillas or any other food product on a large scale, there's an overlap between the processing and manufacturing processes. Technically, the difference between manufacturing and processing in this scenario is:
- All acts that change the food’s chemical makeup are acts of processing.
- All acts that progress the material toward becoming a consumable product are acts of manufacturing.
In the example, there's not much difference between manufacturing and processing in certain steps. One of these steps is the creation of corn flour. The alkalized corn is ground into a flour, which is the process of manufacturing the flour.
Lindsay Kramer has been a full-time writer since 2014. In that time, she's experienced the ups, downs and crazy twists life tends to take when you're launching, building and leading a small business. As a small business owner, her favorite aspect about writing in this field is helping other small business owners and aspiring entrepreneurs become more fluent in the terminology and concepts they face in this role. Previously, she's written on entrepreneurship for 99designs and covered business law topics for law firms.