What is Production

Production is converting raw materials to finished products. It involves a number of factors to be able to produce the goods and services that cater to our needs.

Production means the development and creation of goods and services using resources to stimulate exchange. It is the physical output of a manufacturing or service company. Production involves three processes – raw materials, work in process and finished goods.

Means of production refer to the concept which combines the means of labor and the subject of labor. Means of labor simply means all the things which requires labor to transform it. Subject of labor means the material to work on. Production, therefore, is the combined resources and equipment needed to come up with goods or services.

Resources of Production

First, it is important to delve on the resources of production. Agrarian industries require soil and shovel to produce, while industrial companies require factories. The resources of production pertains to the things used to create commodities.

Therefore, it talks about the different factors of production used to be able to come up with the finished goods which include labor, land and capital as the basic. Additionally, technology and entrepreneurship are also playing essential roles in production. These five factors are needed to come up with products or services.

Labor pertains to the human resources of the business. The people are the company’ greatest resource because they look after the other components of production. Human labor could either be technical or marketing expertise.

Land pertains to the natural resources used in production such as water, soil for farming, minerals, air, flora and fauna. Shell craft industries make use of shells to create wonderful accessories. Meat shops sell pork, chicken and beef. These industries make use of the natural resources around them.

Capital refers to human-made goods that are to be used in production. Machinery, building, shares of stocks, equipment and others all fall under this category. Originally, capital only pertains to money or gold.

Entrepreneurship is a fourth factor in production because of their coordinating function. They are the ones who look after the other factors of production: land, labor, capital and technology in such a way that it can generate profit. Entrepreneurs invest the other factors in order to come up with products and services that would entice customers to buy.

Technology or information technology forms part of intellectual capital. It is fast becoming a huge factor for all kinds of businesses be they manufacturing, retail, agricultural or service industries. The advances in our technology enables the production of goods and services faster and easier. Computers are doing the jobs that people needed to do before.

Production Factors in the Intangible Economy

The intangible economy defines 21st century businesses. Production factors in the intangible economy consist of knowledge, collaboration, process engagement and time quality. Since the four modern-day production factors are all abstract, that’s how the term intangible economy came about. All of these factors are needed to come up with the goods and services offered by the business.

Goods and Services

These are the output which will be produced after using the resources. The products or services produced in production become the focal point of marketing efforts of the company. Selling these products and services to the customers will generate the much needed sales that will in turn be used to continue production of goods and services.

Product is the focal point of marketing because without a product there will be nothing to market. It is the focal point around which all marketing activities revolve. Products or services have to cater to the customers’ needs. These things should satisfy the customer or serve as aids to attain a fulfilling end.