Production and Productivity by Tariq Mahmood

Production and Productivity 

Differences between Production and Productivity

The difference between production and productivity can be strained clearly on the following premises:

Production is an organized movement, wherein step by step conversion of raw materials into useful output takes place. On the contrary, Productivity is an indicator of efficiency in the production in terms of optimum utilization of firm’s resources in the creation of desired output.

Production is a process of value addition, wherein at each level, some value is added to the product. Conversely, productivity is a measure of efficiency.

Production shows the number of units shaped by the firm in a given period. As against, productivity highlights the ratio of output to input consumed.

Production is always spoken in absolute terms, i.e. the volume of output produced. On the other hand, productivity is denoted in relative terms, meaning that it regulates the quantitative relationship between output generated and resources consumed.

While production ascertains the value of output generated, productivity determines the how well the resources are utilized by the firm in the generation of output.

Conclusion

By and enormous, production and productivity are not opposing terms, but these are closely connected one. Production is a conversion process, in which the firm is engaged, whereas productivity is all about how efficiently the company allocates its factors to produce the output, with least amount of wastage and essential quality. In short, the efficiency in production is the firm’s productivity.