Industry is the process of converting raw materials into usable items, such as equipment, charges or robots. This is done using facilities, which can be found in every terminal. The efficiency of this process depends on your extensions, the level of the facilities, your relation to the owner of the facilities, and the knowledge base of your corporation.
Alternatively, commodities can be recycled from items using the recycling plant, although this is generally a wasteful action (with the exception of T0 'flawed' tier items).
Before you can start manufacturing items, you will need a calibration template (CT) to set up a factory line. For all tier 1 (T1) items (including charges and robots), you will need the item itself and reverse engineer it to a CT. Reverse engineering itself requires a decoder (the minimum level of which depends on the item, where higher levels than the minimum also provide better results).
For higher level tiers (T2 and up), you will need a prototype instead. For example, to reverse engineer a T3 CT, you will need to create a T3 prototype. Prototyping is done using your knowledge base and the prototype facility. Expanding your is done with Research Points, which can be earned by researching kernels dropped by destroyed NPC's . Prototypes are significantly expensive to create, and often require additional components, such as an item from a previous tier and ? (gathered by destroying ?). ?
Depending on the decoder level used, the resulting CT will have a certain amount of material and time efficiency points. At 0 points (hypothetically), the CT will require 150% of the commodities and time of that's item base (this can be further offset by extensions, facility points and your relation to the facility's owner). This number will also indicate how much items (cycles) can be manufactured using the CT. At zero material points, the CT will be worn out and becomes useless.
Manufacturing is done using the factory facility. Producing an item consists of calibrating a factory line using the aforementioned calibration template (CT). Once you've set up a factory line, you can set as many cycles as the CT holds points (or as your extensions allow). Every cycle produces one item. The cost for using a factory line is 3 NIC/second.
With every factory cycle, the CT installed starts to degrade. Per cycle, this is 0.3 point for ammo/charges, 1 point for modules, 3 points for robots, and (mostly) 5 points for buildings. As a result, each cycle will slightly increase the commodities and time required.
Removing (decalibrating) the CT from a factory line will also cause degradation to it's material and time efficiency. With the 'Factory: Decalibration efficiency' extension (under the Industry category), you can decrease or even nullify (at level 10) this penalty.