You first ger introduced to item creation when you enter the Trading Town of Peterny. You can go to the Craftmen's Guild right across from the Front Door Inn and register to get a communicator and some money to start with a workshop right across the street.

Each character has a different level when it comes to each type of item creation. You'll be stuck with them for starters and some might even still prove useful even late in the game. The best ways to get good results from item creation though are hiring inventors. Inventors specify in one single field and cant stray outside of that. However it's usually a very high stat so it's worth looking into and taking the time to seek these people out and give them what they want in order for them to work for you. Now there are different groups of inventors that are accessible throughout the game. They can be unlocked merely by getting past a certain point in the game.

Finding the Items for the Inventors
Inventor	Item Required	Location
Ansala	Philosopher's Stone	Make through Alchemy
Balbados	Antique Jewelry	Treasure Chest in Kirlsa Caverns
Boyd	Bent Mystic Sword	Win for 100 Points in the Bunny Races in Gemity
Damda Mooda	Winking Sage Cider	Dropped by Moonshadow Clan members in the Duggus Forest and the Sanmite Steppes
Dejison	Ultimate Bomb	Make through Engineering
Gossam	Potion of Youth (Fake)	Make through Compounding
The Killer Chef	Keen Kitchen Knife	Purchase in Gemity
Cornelius	Sunrise Dictionary	Treasure Chest in Moonbase
Izak	AI Program Blueprints	Get from Leiria in Sphere 211, 5th Floor. Buy from Rumina at successful end of Ruddle Rumina side quest
Mackwell	Book of Prophecies 1	Treasure Chest in Shrine of Kaddan
Mayu	Adorable Kitty Doll	Make through Crafting
Meryl	Dremela's Tool Set	Treasure Chest in Sphere 211, 4th Floor
Misty Lear	Spirit Stone	Treasure Chest in Ruins of Barr
Osman the Sage	Strange Book	Create through Writing, Alchemy
Puffy	Experimental Remedy	Treasure Chest in the Maze of Tribulations, B2F
Rigel	Golden Curry	Make through Cooking
Stanice	Limited-Edition Doll	Treasure Chest in Duggus Forest

There are different workshops scattered throught the world. There are some in towns and some in dungeons. The ones inside of dungeons only the characters in your party can use because no inventors can be transfered there. The ones inside of towns can be transfered amongst each other, some towns even have more than one workshop.

Workshop Locations and Facilities: Town
Location	Facilities	Lines
Airyglyph	Smithery	2
Kirlsa, Workshop 1	Cooking, Alchemy, Compounding	1
Kirlsa, Workshop 2	Crafting, Smithery	3
Peterny	Cooking	0
Aquios	Cooking, Crafting, Compounding	1
Workshop Locations and Facilities: Dungeons
Kirlsa Training Facility	Cooking	3
Bequerel Mine	Compounding, Synthesis	1
Mountains of Barr	Alchemy	1
Urssa Lava Caves	Engineering	1
Ancient Ruins of Mosel	Cooking, Alchemy, Machinery	2
Shrine of Kaddan	Alchemy, Crafting, Smithery	1
Maze of Tribulations	All	3

Upgrading Fees
Facility	Cost	Facility	Cost
Cooking	800 FOL	Engineering	6,000 FOL
Alchemy	2,000 FOL	Synthesis	9,500 FOL
Crafting	8,000 FOL	Line 1	1,000 FOL
Compounding	4,000 FOL	Line 2	2,000 FOL
Smithery	3,000 FOL	Line 3	3,000 FOL
Writing	5,000 FOL	-	-

There are also virtual workshops in Arkives, Moonbase, and Aquaelie. They are based on the Peterny workshop, and it's statistics.

Before attempting to invent you must place up to three members on a line. A line is a team dedicated to making a certain item. You can have up to three lines each working at the same time. You can choose which type of item creation field you want to work in and whether you want to go with Original Creation or Specify Plan. Original Creations lets you randomly generate a price, and that price is an item that you possibly make from scratch. Specifiy Plan is when you take and item and a material and try to improve it. There is one other type called Synthesis which involves taking an item and combining it with a weapon for hopefully better results.

While creating you have two different bars in each line. The top one is the quality bar which shows the amount of effort and skill they are using, and the time bar shows how much time left until they are done with that particular attempt. Each time you go through a new attempt the quality bar goes down some. Obviously the amount it goes down depends on the difficulty of the item you are trying to make. And the time bar is influenced by the people on the team. Another thing influenced by the people on your team is the cost, so they costs may be more or less depending on the people on your team, on that line.