Production is the process by which raw materials are transformed into finished goods to satisfy human wants and needs. In addition to being in the right form, the goods must be in the right place at the right time before the production process is complete.
Stages of production
This is the first stage of production and is called the extractive stage. In this stage, raw materials are extracted from the surface of the earth or from the sea. Examples of this stage of production are: mining, fishing, quarrying, forestry and farming. Even though some produce from farmers are usable, most of the raw materials from this stage of production are unusable and have to be sent to the manufacturing industries to be changed into goods that can be used.
In this stage, raw materials are transformed into semi-finished or finished products. In this stage, goods are made ready for sale to the final consumers. Textile industry, building and construction industry, and chemical industry are some of the examples of secondary production.
Transfer of goods from factories to the final consumers is the work that is carried out in tertiary stage. Activities in this stage are broadly divided into two:
- Commercial Services: This includes workers in communications, finance, insurance, wholesaling, and retailing. These workers are involved in getting the goods to the final consumer.
- Direct Services: People in this group work to provide direct service rather than delivering the goods to the consumers. Teachers, doctors, nurses, lawyers, policemen are examples of people providing direct services.
Chain of production
Primary, secondary and tertiary industries are stages in the chain of production which is the process by which raw materials reach the consumers as finished goods or services. The following gives a detailed chain of production of milk products.
Process of production from primary through secondary to tertiary production and how value increases at each stage of production
The output of primary production is usually in a raw and unusable state and has to be moved on to the secondary sector. Under secondary production, raw materials are turned into finished products. This increases the value of the materials as they are being converted into more useful forms.
For example, wheat is harvested and maybe sold or stored until prices rise and then sold. However, there are other things that can be done to increase its value.
– it can be ground into flour and sold.
– flour can be mixed with other ingredients and made into bread and then sold for profit to consumers in a variety of shapes and sizes.
– it can also be made into sandwiches and sold.
In this way, at each stage, the value of wheat is increasing.