Is it correct to use the present participle to describe what something does rather than only describing/modifying its current state?

For example:

It is a thing that works producing stuff.

This feels wrong to me, but I can't quite put my finger on what exactly is wrong about it. It seems like it's trying to be a participle phrase, but it's not necessarily modifying the current state of "it", and is, instead, describing what "it" is.

If it is, indeed, a participle phrase, then it should be able to be written as

Producing stuff, it is a thing that works.

But, to me, this doesn't seem correct either, so it leads me to believe that the very structure of the sentence is incorrect.