In the five elements productive cycle each elements produce the other as shown below.
In this cycle, Fire produces Earth which produce Metal which produce Water which produce Wood which in turn produce Fire forming a cycle.
Try not to think of it as one element producing another. Instead, think of it as one energy influencing another in a promotive or a productive manner!
The five elements productive cycle is quite intuitive and remembering the sequence is quite easy. Think of it like this. Fire burns to produce ash (earth). From Earth you mine Metal. Water condense on cold Metal which implies that metal produce water. Water nourish Wood which burns to produce Fire and the cycle repeats itself.
How do we apply this in Feng Shui?
Classical Feng Shui systems nomally divide a house into nine sectors called the Nine Palaces. Using formulas practicitoners can find out the prominent energies in each of these sectors. Let's say the a particular sector has is auspicious. It has wood energy and you want to promote it. If you refer to the diagram above, you will see that water produce wood. Hence it will be good to place water e.g. water fountain in that sector (provided of course there are no other restrictions).
The same element also reinforces. Therefore in the above example you can also use potted plants to strengthen the wood energy in that sector.
(Five Elements Productive Cycle: There is also a destructive and exhaustive cycle)