They are used both when working for other players and when working in your own companies and your companies
There are two ways to increase Production Points: through your own Production points and through company production bonus.
Your personal Production Points determine how many Production Points you generate each time you work per click
Personal Production Points can be increased by putting points into the Production skill
Increasing the Production skill benefits both:
The more production points you do per work/click, the more coins you get
Companies can also receive production bonus based on their location
Moving a company to a region with a higher production bonus increases the company's Production Points generated every production tick (every hour)
To move a company:
Choosing a location with a higher production bonus allows the company to get more items each hour