- Secondary level production involves the conversion of raw materials into finished goods.
- This level of production takes place after primary level production and is focused on adding value to the raw materials.
- Secondary level production is important in the manufacturing sector and involves a wide range of activities such as assembly, fabrication, and processing.
Features of secondary level production:
- Use of machinery: Secondary level production involves the use of machinery and equipment to transform raw materials into finished goods. For example, a car manufacturing plant uses machines to assemble different parts of the car.
- Standardization: In secondary level production, standardization is necessary to ensure consistency in the quality of the finished goods. This involves setting standards for materials, processes, and products.
- Skilled labor: Secondary level production requires skilled labor to operate the machines and equipment used in the production process. For example, a factory that produces electronic devices will require technicians with specialized skills to assemble the products.
- Economies of scale: Secondary level production is often characterized by large-scale production, which allows for economies of scale. This means that the cost per unit of production decreases as the volume of production increases.
- Quality control: Secondary level production involves quality control measures to ensure that the finished goods meet the required standards. This involves inspections, testing, and certification.
Importance of secondary level production:
- Economic growth: Secondary level production contributes to the growth of the economy by creating jobs, generating income, and increasing the output of finished goods.
- Value addition: Secondary level production adds value to raw materials and transforms them into finished goods that are more valuable and useful.
- Increased competitiveness: Secondary level production enhances the competitiveness of a business by enabling it to produce high-quality products at a lower cost.
- Technology advancement: Secondary level production drives innovation and technological advancement as businesses look for ways to improve their production processes and products.
Benefits/advantages of secondary level production:
- Increased revenue: Secondary level production increases the revenue of a business by producing more finished goods that can be sold in the market.
- Higher profit margins: Secondary level production can lead to higher profit margins due to economies of scale and increased efficiency in the production process.
- Product differentiation: Secondary level production allows businesses to differentiate their products from those of competitors by offering unique features and designs.
- Greater market share: Secondary level production enables businesses to increase their market share by producing a larger volume of goods at a lower cost.
Drawbacks/disadvantages of secondary level production:
- High capital investment: Secondary level production requires a significant amount of capital investment in machinery, equipment, and infrastructure.
- High operating costs: Secondary level production can be expensive to operate due to the cost of raw materials, labor, and energy.
- Environmental impact: Secondary level production can have a negative impact on the environment due to the production of waste, emissions, and pollution.
- Dependence on external factors: Secondary level production is dependent on factors such as availability of raw materials, transportation, and market demand.