Productive process

economic-dictionary

The production process is the set of tasks and procedures required by a company to carry out the production of goods and services.

It can also be understood as a series of necessary operations and processes that are carried out in a planned and successive way to achieve the elaboration of products.

The production process is carried out by companies, which use information and technology that is used by people to manufacture products.

In addition, companies develop their production processes in order to be able to satisfy market demand.

Stages of the production process

The production process follows a series of stages, the most important of which are:

1. Acquisition of raw materials

Consequently, in this first stage of the production process, the company gathers all the raw materials that will be essential for the manufacture of the products that it will offer to the market.

On the other hand, companies seek in this phase to obtain the greatest amount of raw materials at the lowest possible cost, since this will depend on whether in the end they can obtain business profits or losses. Everything, assuming that all raw materials have a homogeneous quality.

Then, at this stage, the company contacts its suppliers and will choose those that provide them with the best prices and the best quality of inputs.

In the same way, the costs of transportation and storage of the required resources should be considered.

Finally, to complete this phase, it is necessary to determine the production objective, because the correct quantities of raw materials requested and the necessary equipment to efficiently develop the production process will depend on it.

2. Production

Now, in this second phase, the transformation of raw materials and inputs to be converted into products is carried out.

Indeed, it is basically the manufacturing process of goods and services, for that reason it is essential to maintain strict controls to comply with the required quality standards.

If the products delivered to the market meet the demands of the market, the company will be able to obtain benefits and profits.

Whereas, if the products do not meet these requirements, they will cause big problems for companies, from claims to the loss of customers; and consequently a decrease in the sales and profits of the company.

3. Product adaptation

Afterwards, the process of adaptation and adaptation of the product is carried out according to the client, this phase of the process is directed directly to the process of marketing the goods and services.

Of course, it is important to take into account the logistics of storage, transport and the intangible elements of the services depending on the demand that is presented within the market.

Consequently, in this step it is possible to evaluate if the goals established by the company have been met and in the same way proceed to make the necessary corrections.

Finally, the company will establish the prices at which the manufactured products will be marketed, taking into account the costs incurred throughout the process and considering a profit margin.

Elements of the production process

The most important elements that must be considered in the production process are the following:

1. Production factors

The factors of production are the land, capital and labor that are required to carry out the production process.

2. Production process

The production process includes all the technology that is used within the process and consists of determining how the combination of human and material means is carried out to develop the production process.

3. Products

The products are all the goods and services that the company produces for the final consumption of the economic agents that are the consumers; or capital goods that are used for the production of other satisfiers or the generation of more productive wealth.

Types of production processes

Production processes can be classified as follows:

1. Series production

So, serial production is carried out when products with homogeneous characteristics are produced, therefore, they are standardized products, they do not have any differentiation and are produced for mass consumption.

For example, clothing sizes XS, S, M, L, and XL. As well as men's shoes number 42, 40, 38, etc.

2. Production to order

On the other hand, production to order is used to produce a differentiated product adapted to the specific needs of each client.

We can exemplify the case of the manufacture of a jewel, a tailored suit, a portrait of a person, among others.

3. Production by batch

Whereas, in batch production it is done for a certain number of products that is called a production batch, when a group of products is concluded, another is produced and so on.

Each production portion is produced identically, but product characteristics can change by producing a different production batch.

Characteristics of the production process

The characteristics of the production process are as follows:

  • It involves the transformation of raw material into goods (consumer or intermediate) that will be delivered to the customer.
  • It is subject to improvements, which will depend on technological advancement. In this sense, it is important to remember that the production process is perfectible, it can change over time.
  • It must be designed according to market requirements (with the materials that the client prefers, for example).
  • The production process must have precise objectives and strict controls, because only in this way can the company make a profit.

Production process example

Let's see an example of a production process. For example, for the sale of ground coffee:

  • First, potential suppliers of coffee (bean or green) are contacted, those who offer the product with the best value for money are chosen.
  • The coffee will be taken to roast and then it will be ground. Subsequently, the coffee is bagged, in presentations of 1/2 and 1 kilogram.
  • Finally, the product is stored in a place without humidity and at a warm temperature to later be distributed to customers according to their requirements.
Manufacture

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