A coproduct is when a manufacturer produces two similar products at the same time. A coproduct can also be the product that is manufactured right after another product because of the similarities between the two products. Even if the products are not the same or similar, if the process to manufacture the two products is the same or similar, then this is a coproduct situation as well.
One example of a coproduct is the Airbus aircraft and the Ariane rocket. These products are produced by manufacturing plants spread throughout Europe. They are coproducts because the two items have similar parts and manufacturing process.
Often times, coproducts require different manufacturers to produce the parts for the coproducts. These different parts are then brought together to create the same end product. While different manufacturing firms in Europe produce the different parts, in the end, the parts go into the manufacturing of the Ariane rocket and the Airbus aircraft.
In addition to the sharing of parts, coproduction may also involve the sharing of other elements. For example, a coproduct may be the sharing of key personnel, staff or employees between more than one manufacturing firm. It may also relate to an agreement between more than one firm to share technology, such as computers, software, machinery or equipment.
Another good example of a coproduct comes from the manufacturing plants in Iowa. These plants are responsible for the corn production industry. The state grows plants that produce ethanol, corn sweeteners and corn oil. During the dry mill and wet mill manufacturing processes of the plants, they are also able to produce cattle feed simultaneously as a coproduct.
In food manufacturing plants, another type of coproduct exists in packaging. This is when the product that goes in to the packaging is the same, but the labels and branding on the packaging are different. For example, a manufacturing plant that makes and cans green beans may produce canned green beans for a name brand vegetable company and the generic store brand. While the labels are different, the contents are the same.
Similar situations can occur with other items. A bicycle manufacturer may produce bicycles for two different companies. When the bikes are produced in the same plant, this is a coproduct situation. If two bicycle manufacturers get the parts for producing their own bicycles from the same places, then this is also a coproduct situation.