The economy of each country is based on industrial enterprises that produce products or provide services. The number of products manufactured by the enterprise is an indicator for assessing the effectiveness of the company, industry, and even the whole national economy.
What is a product?
Products - this is the result of the enterprise, represented by a set of ready-to-sell material products and services.
The goods manufactured by the enterprise are an important indicator. So, the output characterizes the efficiency of the enterprise and labor productivity. Also, according to the commodity volume, conclusions can be drawn about production capacities and the level of equipment. The information obtained allows us to determine the problems that arise at different stages of production, to assess the potential and reserves.
Thus, the product is the result of the work of the company and can be expressed in different forms.
Product Forms
The company's products may take two forms:
- Goods - parts, finished products, semi-finished products and other types of product, the sizes and volumes of which can be expressed in natural measuring units.
- Services - work aimed at improving the useful qualities of a product (for example, painting) or restoring lost properties (repair). Industrial services are associated with an increase in the consumer value of products created earlier: grinding, installation, commissioning, etc.
The intangible form of production in recent years is gaining particular popularity. Depending on the nature of the work performed, distinguish between market and non-market services.
Market services include:
- settlement products of banks and other financial institutions that collect, transfer and distribute cash resources;
- non-banking services - wholesale and retail trade, repair, communications, rental, rental, laundry and dry cleaning services, education, catering, hairdressing, legal advice, etc.
Non-market services include costs that are covered by funds from the state budget or voluntary contributions (services of state institutions, public organizations, etc.).
Types of products
In modern production , these types of product are distinguished:
- The main product is a specific type of product for the manufacture of which production was organized.
- By-product - in some industries, technological capabilities make it possible to create, along with the main product, another product that has its own set of useful properties. For example, the production of oilcake at a creamery.
- Associated products - a product created from the same raw materials as the main products, but using a different technology.
- Wastes of production - during the processing they lost their useful properties and cannot be used for production.
- Marriage - enterprise products unsuitable for use and further production. The level of marriage is an important indicator on the basis of which one can judge the production efficiency and the degree of technical and technological development. The lower this indicator, the higher the productivity of the enterprise.
Readiness Classification
According to the degree of readiness, all manufactured products are divided into the following groups:
- Work in progress is a product that has passed only the initial stages of processing and has an unfinished presentation. Also in this category are finished products that have gone through all the production processes, but have not yet been issued an invoice and have not arrived at the warehouse.
- Semi-finished products are parts and products that underwent all technological operations in one workshop, but are subject to processing in other production operations. The semi-finished product is subject to a special suitability test, after which it is documented.
- Finished products are goods that have gone through a full processing cycle and all the production processes of the enterprise. It is checked for suitability for operation and after that it arrives at the finished goods warehouse or is delivered to the customer. Finished products are manufactured in the main production. Quite often, subsidiary workshops are created at enterprises that produce products that accompany the main product. For example, packaging, storage tanks for products, etc.
Product Quality Assessment
All manufactured products must be certified before they reach store shelves. Product certification is a procedure whose purpose is to confirm that a product meets the requirements established by law. First of all, it concerns the criteria of quality and safety.
In world practice, product certification is carried out by different methods of confirming an object with specified requirements. If, according to the results of the audit, the products meet all the criteria, the company receives a document - a certificate of compliance. It is issued by independent organizations accredited by government ministries and departments.
Certification objectives
The certification procedure is carried out to achieve the following goals:
- consumer protection from an unscrupulous manufacturer;
- monitoring the safety of goods for human health and life, their property and the environment;
- checking the conformity of the level of product quality with the indicators declared by the manufacturer;
- increasing the competitiveness of the product;
- export promotion and participation in international trade.
Certification may be compulsory or voluntary. Mandatory verification is a state control of quality and safety indicators that products must meet. This is important to consider for all existing manufacturers, as well as those enterprises that just plan to start manufacturing. The purpose of such certification is to provide evidence of compliance of the goods with state standards.
Voluntary certification can be carried out at the request of the enterprise on contractual terms between the applicant and the body performing the examination.
Features of product pricing
After production, the company must calculate the price at which it will sell the goods. Price is the monetary equivalent of the value of the goods. It includes all types of production costs, taxes and payments to the budget, as well as the amount of net income that the company expects to receive.
The price of products may change with changing production conditions. So, an increase in the volume of goods leads to a decrease in shift costs per unit of output. And cost reduction affects the cost of goods. Well, if the company purchased new equipment and improved the technological process, this is likely to lead to an increase in the price of manufactured products.