Production can be defined as the systematic activity of gradually transforming one form of material into another while maintaining the requisite quality and are capable of satisfying human wants. It tends to combine, tangible inputs, i.e. raw materials, and intangible inputs, i.e. ideas, information, etc. to turn it into finished products for sale, through a mechanical or chemical process.
Types of Production
- Job-Shop Production: A production process, in which few products are created according to the demand of the customer, in the stipulated time and cost. In job-shop production, product volume is low, and variety is high.
- Batch Production: Batch production is one wherein product passes through various stages over a series of functional departments, and a number of batches are produced.
- Mass Production: It is a manufacturing technique in which discrete parts are produced with the help of continuous process.
- Continuous Production: The process of production in which the production facilities are sequenced as per the production operations chronologically.
Productivity is a measure that gauges the efficiency of the production process, i.e. in transforming inputs such as raw material, labour, capital, etc. into the output of finished goods. It can be expressed in terms of the ratio of outputs produced to inputs consumed, in the given period.
Productivity tends to determine the overall production performance of the firms by ascertaining how efficiently the firm utilized its resources in the production of goods and services, with minimum wastage. It can be enhanced by controlling factors of production, improving process and technology.
Competition triggers productivity, as intense competition results in higher productivity, which in turn provides better value to the customers, leading to higher share in the market. Further, it can be evaluated with the help of the following analysis:
- Trend Analysis: It gauges the change in productivity of the firm over the years.
- Horizontal Analysis: It compares the firm’s productivity, with other firms of the same size and business.
- Vertical Analysis: It compares firm’s productivity, with other firms of various size in the same industry and with other industries.
- Budgetary Analysis: Establishing productivity norm as the budget for the upcoming period, on the basis of above analysis and making strategies for its achievement.
|Production is a function of an organization which is associated with the conversion of range of inputs into desired output.||Productivity is a measure of how efficiently resources are combined and utilized in the firm, for achieving the desired outcome.|
|Numbers of units actually produced.||Ratio of output to input|
|Absolute terms||Relative terms|
|Value of output||Efficiency of factors of production|