From the point of view of the economy, the production process is the human impact on natural substances in order to create any goods and services required for the future development of society. Studying history, one can understand that production has passed a rather long and difficult path of development, from the manufacture of the simplest products to some sophisticated technical systems, flexible complex and computing devices. All types of production are rather complex processes, without which the functioning of the economy would be simply unrealistic.
General definition
The production process can also be described as a focused activity, during which all raw materials and material products with the help of labor become ready for use. Any type of production is the basis for the development of all countries.
Without the production process, the economy simply cannot be developed. Investors who invest their money in the manufacture of certain products and services, after their sale receive a good profit. From this profit they make tax and other deductions, thanks to which state institutions work.
Market and non-market production
Speaking about existing types of production, it should be understood that they are all divided into market and non-market. The first type in this case involves the manufacture of products for further sale at the existing market value. In such cases, all types of market production will be aimed at extracting the maximum amount of profit.
Sometimes a product can be distributed for free, or at a very low cost. In this case, this type of production is already non-market. Basically, state funds or various non-profit companies belong to this type. In addition, sometimes profitable companies can make big discounts or sales in order to sell their goods, which for a long time are no longer in great demand in the market.
Production related activities
It is also important to identify other types of production activities that are included in the definition of this concept.
- Activities for the production of products that are permitted by law.
- Illegal certain types of production.
- The movement of raw materials, semi-finished products and materials between the individual branches of the company.
- The so-called shadow production processes, which include the types of economic production that are hidden from paying taxes.
- Incomplete production process, which includes materials that have already been launched into processing, but have not yet managed to be converted into finished products.
- Types of production of products that enter the markets from households.
- Paid wage labor for staff.
- Construction and repair work.
- The use of buildings with the aim of forming wealth and services.
Types of activity not related to production
It is also customary in the economy to single out those types of activities that have nothing to do with the production process. These include:
- all the affairs and services occurring at home, which are carried out independently to meet their own needs;
- by-products, such as waste and garbage, which are generated during the main type of production, and are not considered its ultimate goal.
Thus, if, for example, a person prepares food at home and cleans the room for his own purposes only, then this type of activity does not apply to production. But if such services will be carried out in accordance with the contract of employment and for the purpose of obtaining benefits, then this falls into the above mentioned category.
Varieties of production
Speaking about what types of production exist, first of all, material ones should be singled out. They include the direct manufacture of those products that have real material form. This includes food, household appliances, architectural buildings, clothing and much more.
If we talk about intangible types of organization of production, then this includes services of various fields, for example, education, healthcare and others. Despite the fact that there is no material form, these services still have a specific value and bring a certain result.
Production activities
Organization of the production process, as a rule, is carried out on the basis of several varieties of relevant activities:
- Custom production, which is a type of production of products that meets a specific request. First of all, such an activity is considered the most effective, since companies manufacturing one or another product protect themselves from the risk of a decline in demand.
- Flexible or mass production, involving the manufacture of products on a large scale. In parallel with this, such activities may include several modifications at once or undergo changes in connection with the existing demand.
- Flexible or mass production, which differs from the previous category in that the products are made only in a standardized form. Most often this applies to equipment, tools and other products that require a certain accuracy in production. It is also worth noting that such an option will be relevant in those cases where large-scale production of products is required.
- Stream production, which is organized as a continuous cycle. The materials are constantly used, and the goods are manufactured. Quite often, in order to better efficiency, a similar process is carried out continuously. Thus, company employees work in shifts.
Types of factors of production
The production process cannot be carried out without some factors:
- Natural resources, which are an objective necessity for absolutely any enterprise, it does not matter if it is industrial or otherwise. This should include not only water, solar energy, soil, but also other resources, including even climatic conditions, which to a large extent determine the suitability of a region for the development of a certain type of production.
- Investment resources, which are one of the main factors, without which it is simply impossible to carry out this or that activity. This includes financial support for production, with the help of which it becomes possible to acquire the resources necessary for the entire process.
- Labor resources, which are people who have a certain level of qualification and education. Without such employees, it is simply impossible to carry out the production process. This includes both management personnel and ordinary employees, as well as those who serve the entire process of manufacturing products or services.
- Entrepreneurial abilities, implying the individual qualities of the people who are at the head of the plant for the production of any intangible or material goods. This factor is one of the main factors for the successful implementation of activities, since the managerial staff will determine how well the time is chosen to start the working day, how modern the technology will become, and how finished products will be sold correctly.
Cost effectiveness
Organization of the production process is aimed at the end to get some specific result of work, reflected in the planning documentation. We are mainly talking about economic efficiency, which is the ratio of net profit and cost. Thus, each company is moving towards maximizing returns on a unit of invested funds in the production process. However, this effectiveness includes not only the goal of monetary reward.
Technological efficiency
In addition to economic, there is also technological efficiency - when it is calculated how many units of products were produced using a specific method, technology and other factors. They talk about technological efficiency when the real volume of the production process tends to the maximum possible, based on the resources invested and the methods used. Also important is the point that there should not be a more profitable option, thanks to which it would be possible to produce more products at the same cost.
How to determine the technology of the production process
The main process in production begins with the fact that it is necessary to select a technology that will meet the requirements of products or services. This decision must be made, relying on a number of several factors:
- First of all, it is necessary to decide which resources and equipment a particular company can afford regarding the financial situation;
- from all the equipment options that the organization can buy, it is recommended to select more efficient and modern models;
- after making certain economic calculations, the final choice of one or another option is made.
Innovative production technology
As in most countries, in Russia new types of production cannot exist without innovative technologies. The structure of the development of the production process is carried out in a certain way:
- Initially, an innovation appears, which may be a specific invention or a new method of work.
- If this new invention is used successfully, then it will transform into an innovation.
- With the large-scale use of this innovation, as well as in the formation of positive results, it becomes an innovation.
Changes in the structure of the production process should attract the attention of users, as well as meet their requirements and, accordingly, be aimed at increasing profits. Unfortunately, most of these changes do not take into account the title of innovation. But this is observed in cases where the product is truly unique, unlike the rest, so that the turnover and profit becomes greater.
It is customary to talk about innovations in the event that it would be quite problematic for competitors to make such products. To achieve a specific result, it is imperative to acquire a patent for a new technology, and quickly begin to promote your product on the market. Over time, if everything is done correctly, brands gain popularity and become in demand.
Quite often, domestic companies offer their products that do not meet certain criteria, and therefore fails. For this reason, all the pros and cons must be weighed before a technologically new product goes on sale, because if it fails, the company will incur losses. Most innovations are not considered radical, but they still help to achieve some definite success.
New technologies at the exhibition
The best way to promote your products is to demonstrate it at various exhibitions. In addition, the product, participating in such an event, communicates directly with visitors. Exposition sites have recently been organized more vividly, dynamically and in an original way. Thanks to such exhibitions, you can establish communication, understand what exactly is interesting for the audience. The exhibition is a visual representation of the products, after which you can get acquainted in more detail with the latest developments directly at the enterprise itself.
A few words in conclusion
Production is a rather complicated process, which is aimed, first of all, at the formation of intangible and material wealth. Production is a fundamental factor for the functioning of the economy - both in a single country and throughout the world.