Difference Between Production and Productivity

In this article, we see the major difference between production and productivity. What does it mean? In simple terms, production is the process in which raw materials are changed into a finished output or product. While in productivity it is the actual output or input of any production is called productivity. We see the advantages of production and productivity and their efficiency.

In production, we see them it is the detailed description of the manufacturing process while in the productivity it is actually the efficiency of any production unit. Let’s start to see the major differences in production and productivity.

The process of productivity in any production tells about the workability, efficiency, and performance of any production, the economy depends on how much productivity is for the production. The greater the productivity the higher will be the earning capacity. It is the interaction between output and input in a specific production unit. In simple words, productivity is actually the greater income of the production but used minimum production factor.

People always misunderstood the terms production and productivity. There is a difference in it. In production is the process to convert raw material into a finished product. While productivity is actually the output of any generated production unit. In this article, we see the difference between production and productivity in a detailed manner.

What is production?

It can be defined as a systematic way of converting raw material or one thing into another form to give product but maintaining the quality, quantity, and to satisfy human demands is called production. In this process different raw materials, ideas, information is utilized to convert into a finished product for sale in the market. Different processes are used in it to convert raw material to finished product. Whether it is a physical process, chemical process, biological process.

Production is actually converting something into good for consumer daily life and to increase the market production. In production, adaptation is very important it converts different input into good output in the association.

When the production of anything is higher, in turn, increases the productivity of the market goods. Production is very important for productivity; their procedure is useful for productivity. The production increases the way of livings and also excludes probabilities. The whole system of production is very beneficial for the good livings of humans. Production increases the ability and skills of the people. The production makes the people wealthy ad rich. There are different forms of production. One is direct production and the other one is indirect production.

Indirect production:

In this production, the finished product is delivered to the market, companies, and a large industry for sale to increase the market value is called indirect production.

What is direct production?

In direct production, the finished product is produced on a small-scale level or normally it is done by a small group of people is called direct production.

There are also many ways to define production one is separate production; it produces the product according to the demands of people. Another is mass production it prepares the products into the different manufacturing processes. In batch production, the product is prepared in various steps. While in continuous production it makes the product in a systematic and ordered way.

Productivity is actually telling about the ratio of input and output of production. It tells about how much production occurs in the production. When the input of the production unit remains the same and output increases than will higher the productivity. When the output is higher than input increases production then it will also increase the ratio of productivity. If the output is lesser than the input it will decrease the overall productivity. When the productivity is higher the cost of everything per unit is reduced result in a higher level of profit in the market. High productivity will increase the economy of every country. Higher productivity will increase the living standard of people it will also increase the income source of the people. Companies become more popular and strengthen in the market.

Different types of production:

There are different of production that will increase productivity. Some are given below

  • Continuous production: in this continuous production the sequence of production is maintained to get maximum efficiency is called continuous production.
  • Batch production: in this production, the raw material passes through various stages and steps like a functional batch to increase the production and to create a different batch.
  • Mass production: in this production, the different parts of the finished product are produced with the help of a continuous process to increase production.
  • Shop production: in this process only, limited products are produced according to the demand of the customer is called job shop production. In this production, the variety of products are very high.

What is productivity?

Productivity is actually the measure of the ratio of input and output of productivity. It tells about the efficiency of production. In this process, various raw materials as input labor are transformed into the finished products as an output of the production.

Productivity tells about the production performance of any product how they utilize the resources to convert raw material into a good product. Productivity can be increased by wasting any resource is to utilize new methods, technology, improved process to increase production.

Competition enhances the productivity when the competition develops between different production unit every production unit adopt the best to become stabilize itself in the market. It will increase the overall productivity; it will give a better life to the consumer. It increases their shares in the market.

Different analyses are required for the betterment of productivity.

  • Horizontal analysis: In this analysis, the productivity of one company compares with another of the same business and size.
  • Vertical analyses: These analyses compare the productivity of one company to another with different sizes and businesses in the same industry or in different industries.
  • Trend analysis: In this analysis compare or look at the change in productivity over the years or in different periods.
  • Budgetary analysis: Making different productivity by looing these analyses to increase production according to the demands of the market. Make different schemes to hit the achievements.

Productivity also determines the competition of an individual, system to transform the important raw material as input to convert into the product as an outcome. In any country economy only developed through greater productivity. The economy uses productivity to valuable the productive value in the market. Labor and capital are the important energy source of productivity.

Production can be measured easily while measuring productivity is a very difficult one. Growth of productivity is very important for business growth it attracts the main outcome. When productivity is higher then profit is very high for companies and people.

There are five main processes of actual productivity are constructive process, market share, and value process. Higher productivity will means greater capacity for earning.

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Advantages of productivity:

There are many advantages of productivity. Some are given below

  • It ensures the correct use of resources for production factors to increase the production
  • It eliminates the factor of wastage of resources.
  • It enhances the competition between the comparison of the company to other firms or companies in order of collective production aggregate.
  • It enables the department of management to control the performance of the company by comparison with companies’ production.

Affecting factors of the production:

Many factors affect production. Let’s see what are these. In production, three factors are very important one is land, the other is labor, the third one is capital. All three factors are needed at the same time to increase productivity. Production means in economics is to create to invent something. These factors are primary factors of production that are very important. The primary enhances the production but not direct or become part of the product. Besides primary factors, secondary factors are also required. The human also a factor of production. These factors greatly affect the rate of production.

  • In the factors, lands are very important as a natural source, gold that is used for the production
  • Labor is an organization that is the building block of any production unit. They work at all levels of the organization
  • Capital represents the tools and other machines used to produce goods.
  • All kinds of risks and rewards are taken by the entrepreneur.

Difference between production and performance:

The major difference between production and productivity are:

  • Production is an organization that involves a step to convert the raw material into the finished product as an outcome.
  • Productivity is the efficiency of how resources are utilized to convert into the desired product.
  • Production is a process while productivity is a measurement of production.
  • Productivity represents the efficiency of input and output. The production Represents how the different unit processes convert into the desired product
  • Production is a relative term while productivity is the absolute term,
  • Performance defines the relationship between inputs and outputs. Production determines the output only.
  • Production is to create something while productivity is to measure how it is processing
  • Productivity measures the goods
  • Productivity is used for adaptation while production is used for something goods.
  • The procedure of productivity is to calculate something while production is to create something.
  • Production controls the value of output while productivity resolves the issues.


In this article, we see the difference between production and productivity. Advantages of these two terms, their factors, and types. Production and productivity are not opposite terms but they are closely related to each other. Production is a changing process that converts raw material into a good product, while productivity measures the efficiency of how the raw material as output is converting into a product with minimum loss of resource.

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