diff --git a/.github/workflows/build_and_push.yml b/.github/workflows/build_and_push.yml
index 2c1ebe4c..05173d53 100644
--- a/.github/workflows/build_and_push.yml
+++ b/.github/workflows/build_and_push.yml
@@ -40,7 +40,7 @@ jobs:
         uses: docker/build-push-action@v2
         with:
           context: .
-          file: ./Dockerfile
+          file: ./docker/Dockerfile
           push: true
           tags: freikin/dawarich:latest,freikin/dawarich:${{ github.event.inputs.branch || github.ref_name }}
           platforms: linux/amd64,linux/arm64,linux/arm/v7,linux/arm/v6
diff --git a/dev-docker-sidekiq-entrypoint.sh b/dev-docker-sidekiq-entrypoint.sh
deleted file mode 100644
index db7c87e9..00000000
--- a/dev-docker-sidekiq-entrypoint.sh
+++ /dev/null
@@ -1,21 +0,0 @@
-#!/bin/sh
-
-set -e
-
-echo "Environment: $RAILS_ENV"
-
-# set env var defaults
-DATABASE_HOST=${DATABASE_HOST:-"dawarich_db"}
-DATABASE_PORT=${DATABASE_PORT:-5432}
-DATABASE_USER=${DATABASE_USER:-"postgres"}
-DATABASE_PASSWORD=${DATABASE_PASSWORD:-"password"}
-DATABASE_NAME=${DATABASE_NAME:-"dawarich_development"}
-
-# Wait for the database to be ready
-until nc -zv $DATABASE_HOST ${DATABASE_PORT:-5432}; do
-  echo "Waiting for PostgreSQL to be ready..."
-  sleep 1
-done
-
-# run passed commands
-bundle exec ${@}
diff --git a/.dockerignore b/docker/.dockerignore
similarity index 100%
rename from .dockerignore
rename to docker/.dockerignore
diff --git a/Dockerfile b/docker/Dockerfile
similarity index 83%
rename from Dockerfile
rename to docker/Dockerfile
index ef2b74c5..07334a1f 100644
--- a/Dockerfile
+++ b/docker/Dockerfile
@@ -32,17 +32,17 @@ RUN gem install bundler --version "$BUNDLE_VERSION" \
 # Navigate to app directory
 WORKDIR $APP_PATH
 
-COPY Gemfile Gemfile.lock vendor .ruby-version ./
+COPY ../Gemfile ../Gemfile.lock ../vendor ../.ruby-version ./
 
 # Install missing gems
 RUN bundle config set --local path 'vendor/bundle' \
     && bundle install --jobs 20 --retry 5
 
-COPY . ./
+COPY ../. ./
 
 # Copy entrypoint scripts and grant execution permissions
-COPY ./dev-docker-entrypoint.sh /usr/local/bin/dev-entrypoint.sh
-RUN chmod +x /usr/local/bin/dev-entrypoint.sh
+COPY ./docker/prod-docker-entrypoint.sh /usr/local/bin/entrypoint.sh
+RUN chmod +x /usr/local/bin/entrypoint.sh
 
 EXPOSE $RAILS_PORT
 
diff --git a/Dockerfile.dev b/docker/Dockerfile.dev
similarity index 100%
rename from Dockerfile.dev
rename to docker/Dockerfile.dev
diff --git a/dev-docker-entrypoint.sh b/docker/dev-docker-entrypoint.sh
similarity index 92%
rename from dev-docker-entrypoint.sh
rename to docker/dev-docker-entrypoint.sh
index 385b50da..90a8ddfd 100644
--- a/dev-docker-entrypoint.sh
+++ b/docker/dev-docker-entrypoint.sh
@@ -24,8 +24,8 @@ until nc -zv $DATABASE_HOST ${DATABASE_PORT:-5432}; do
 done
 
 # Install gems
-gem update --system 3.5.7
-gem install bundler --version '2.5.9'
+gem update --system 3.6.2
+gem install bundler --version '2.5.21'
 
 # Create the database
 if [ "$(psql "postgres://$DATABASE_USERNAME:$DATABASE_PASSWORD@$DATABASE_HOST:$DATABASE_PORT" -XtAc "SELECT 1 FROM pg_database WHERE datname='$DATABASE_NAME'")" = '1' ]; then
@@ -37,7 +37,7 @@ fi
 
 # Run database migrations
 echo "PostgreSQL is ready. Running database migrations..."
-bundle exec rails db:prepare
+bundle exec rails db:migrate
 
 # Run data migrations
 echo "Running DATA migrations..."
diff --git a/docker-compose.production.yml b/docker/docker-compose.production.yml
similarity index 89%
rename from docker-compose.production.yml
rename to docker/docker-compose.production.yml
index e6a39b90..2399e731 100644
--- a/docker-compose.production.yml
+++ b/docker/docker-compose.production.yml
@@ -2,7 +2,7 @@ networks:
   dawarich:
 services:
   dawarich_redis:
-    image: redis:7.0-alpine
+    image: redis:7.4-alpine
     container_name: dawarich_redis
     command: redis-server
     networks:
@@ -17,7 +17,7 @@ services:
       start_period: 30s
       timeout: 10s
   dawarich_db:
-    image: postgres:14.2-alpine
+    image: postgres:17-alpine
     container_name: dawarich_db
     volumes:
       - db_data:/var/lib/postgresql/data
@@ -27,15 +27,16 @@ services:
     environment:
       POSTGRES_USER: postgres
       POSTGRES_PASSWORD: password
+      POSTGRES_DB: dawarich_production
     restart: always
     healthcheck:
-      test: [ "CMD-SHELL", "pg_isready -U postgres -d dawarich_development" ]
+      test: [ "CMD", "pg_isready", "-U", "postgres" ]
       interval: 10s
       retries: 5
       start_period: 30s
       timeout: 10s
   dawarich_app:
-    image: freikin/dawarich:latest
+    image: dawarich:prod
     container_name: dawarich_app
     volumes:
       - gem_cache:/usr/local/bundle/gems_app
@@ -48,16 +49,17 @@ services:
       # - 9394:9394 # Prometheus exporter, uncomment if needed
     stdin_open: true
     tty: true
-    entrypoint: dev-entrypoint.sh
+    entrypoint: entrypoint.sh
     command: ['bin/dev']
     restart: on-failure
     environment:
       RAILS_ENV: production
       REDIS_URL: redis://dawarich_redis:6379/0
       DATABASE_HOST: dawarich_db
+      DATABASE_PORT: 5432
       DATABASE_USERNAME: postgres
       DATABASE_PASSWORD: password
-      DATABASE_NAME: dawarich_development
+      DATABASE_NAME: dawarich_production
       MIN_MINUTES_SPENT_IN_CITY: 60
       APPLICATION_HOST: localhost
       APPLICATION_HOSTS: localhost
@@ -69,6 +71,8 @@ services:
       PROMETHEUS_EXPORTER_ENABLED: false
       PROMETHEUS_EXPORTER_HOST: 0.0.0.0
       PROMETHEUS_EXPORTER_PORT: 9394
+      SECRET_KEY_BASE: 1234567890
+      RAILS_LOG_TO_STDOUT: "true"
     logging:
       driver: "json-file"
       options:
@@ -93,7 +97,7 @@ services:
           cpus: '0.50'    # Limit CPU usage to 50% of one core
           memory: '2G'    # Limit memory usage to 2GB
   dawarich_sidekiq:
-    image: freikin/dawarich:latest
+    image: dawarich:prod
     container_name: dawarich_sidekiq
     volumes:
       - gem_cache:/usr/local/bundle/gems_sidekiq
@@ -103,16 +107,17 @@ services:
       - dawarich
     stdin_open: true
     tty: true
-    entrypoint: dev-entrypoint.sh
+    entrypoint: entrypoint.sh
     command: ['sidekiq']
     restart: on-failure
     environment:
       RAILS_ENV: production
       REDIS_URL: redis://dawarich_redis:6379/0
       DATABASE_HOST: dawarich_db
+      DATABASE_PORT: 5432
       DATABASE_USERNAME: postgres
       DATABASE_PASSWORD: password
-      DATABASE_NAME: dawarich_development
+      DATABASE_NAME: dawarich_production
       APPLICATION_HOST: localhost
       APPLICATION_HOSTS: localhost
       BACKGROUND_PROCESSING_CONCURRENCY: 10
diff --git a/docker-compose.yml b/docker/docker-compose.yml
similarity index 100%
rename from docker-compose.yml
rename to docker/docker-compose.yml
diff --git a/docker-compose_mounted_volumes.yml b/docker/docker-compose_mounted_volumes.yml
similarity index 100%
rename from docker-compose_mounted_volumes.yml
rename to docker/docker-compose_mounted_volumes.yml
diff --git a/docker/prod-docker-entrypoint.sh b/docker/prod-docker-entrypoint.sh
new file mode 100644
index 00000000..683ae2f0
--- /dev/null
+++ b/docker/prod-docker-entrypoint.sh
@@ -0,0 +1,93 @@
+#!/bin/sh
+
+unset BUNDLE_PATH
+unset BUNDLE_BIN
+
+set -e
+
+echo "Environment: $RAILS_ENV"
+
+# Parse DATABASE_URL if present, otherwise use individual variables
+if [ -n "$DATABASE_URL" ]; then
+  # Extract components from DATABASE_URL
+  DATABASE_HOST=$(echo $DATABASE_URL | awk -F[@/] '{print $4}')
+  DATABASE_PORT=$(echo $DATABASE_URL | awk -F[@/:] '{print $5}')
+  DATABASE_USERNAME=$(echo $DATABASE_URL | awk -F[:/@] '{print $4}')
+  DATABASE_PASSWORD=$(echo $DATABASE_URL | awk -F[:/@] '{print $5}')
+  DATABASE_NAME=$(echo $DATABASE_URL | awk -F[@/] '{print $5}')
+else
+  # Use existing environment variables
+  DATABASE_HOST=${DATABASE_HOST:-dawarich_db}
+  DATABASE_PORT=${DATABASE_PORT:-5432}
+  DATABASE_USERNAME=${DATABASE_USERNAME:-postgres}
+  DATABASE_PASSWORD=${DATABASE_PASSWORD:-password}
+  DATABASE_NAME=${DATABASE_NAME:-dawarich_production}
+fi
+
+# Function to test database connection
+test_db_connection() {
+  echo "Testing connection to PostgreSQL..."
+  echo "Host: $DATABASE_HOST"
+  echo "Port: $DATABASE_PORT"
+  echo "Username: $DATABASE_USERNAME"
+  echo "Database: postgres (default database)"
+
+  if PGPASSWORD=$DATABASE_PASSWORD psql -h "$DATABASE_HOST" -p "$DATABASE_PORT" -U "$DATABASE_USERNAME" -d postgres -c "SELECT 1" > /dev/null 2>&1; then
+    echo "✅ Successfully connected to PostgreSQL!"
+    return 0
+  else
+    echo "❌ Failed to connect to PostgreSQL"
+    return 1
+  fi
+}
+
+# Try to connect to PostgreSQL, with a timeout
+max_attempts=30
+attempt=1
+
+while ! test_db_connection; do
+  if [ $attempt -ge $max_attempts ]; then
+    echo "Failed to connect to PostgreSQL after $max_attempts attempts. Exiting."
+    exit 1
+  fi
+
+  echo "Attempt $attempt of $max_attempts. Waiting 2 seconds before retry..."
+  attempt=$((attempt + 1))
+  sleep 2
+done
+
+# Remove pre-existing puma/passenger server.pid
+rm -f $APP_PATH/tmp/pids/server.pid
+
+# Install gems
+gem update --system 3.6.2
+gem install bundler --version '2.5.21'
+
+# Create the database if it doesn't exist
+if PGPASSWORD=$DATABASE_PASSWORD psql -h "$DATABASE_HOST" -p "$DATABASE_PORT" -U "$DATABASE_USERNAME" -c "SELECT 1 FROM pg_database WHERE datname='$DATABASE_NAME'" | grep -q 1; then
+  echo "Database $DATABASE_NAME already exists, skipping creation..."
+else
+  echo "Creating database $DATABASE_NAME..."
+  bundle exec rails db:create
+fi
+
+# Run database migrations
+echo "PostgreSQL is ready. Running database migrations..."
+bundle exec rails db:migrate
+
+# Run data migrations
+echo "Running DATA migrations..."
+bundle exec rake data:migrate
+
+# Run seeds
+echo "Running seeds..."
+bundle exec rake db:seed
+
+# Precompile assets
+if [ "$RAILS_ENV" = "production" ]; then
+  echo "Precompiling assets..."
+  bundle exec rake assets:precompile
+fi
+
+# run passed commands
+bundle exec ${@}
diff --git a/prod-docker-entrypoint.sh b/prod-docker-entrypoint.sh
deleted file mode 100644
index 52bac19a..00000000
--- a/prod-docker-entrypoint.sh
+++ /dev/null
@@ -1,51 +0,0 @@
-#!/bin/sh
-
-unset BUNDLE_PATH
-unset BUNDLE_BIN
-
-set -e
-
-echo "Environment: $RAILS_ENV"
-
-# set env var defaults
-DATABASE_HOST=${DATABASE_HOST:-"dawarich_db"}
-DATABASE_PORT=${DATABASE_PORT:-5432}
-DATABASE_USERNAME=${DATABASE_USERNAME:-"postgres"}
-DATABASE_PASSWORD=${DATABASE_PASSWORD:-"password"}
-DATABASE_NAME=${DATABASE_NAME:-"dawarich_production"}
-
-# Remove pre-existing puma/passenger server.pid
-rm -f $APP_PATH/tmp/pids/server.pid
-
-# Wait for the database to be ready
-until nc -zv $DATABASE_HOST ${DATABASE_PORT:-5432}; do
-  echo "Waiting for PostgreSQL to be ready..."
-  sleep 1
-done
-
-# Install gems
-gem update --system 3.5.23
-gem install bundler --version '2.5.21'
-
-# Create the database
-if [ "$(psql "postgres://$DATABASE_USERNAME:$DATABASE_PASSWORD@$DATABASE_HOST:$DATABASE_PORT" -XtAc "SELECT 1 FROM pg_database WHERE datname='$DATABASE_NAME'")" = '1' ]; then
-  echo "Database $DATABASE_NAME already exists, skipping creation..."
-else
-  echo "Creating database $DATABASE_NAME..."
-  bundle exec rails db:create
-fi
-
-# Run database migrations
-echo "PostgreSQL is ready. Running database migrations..."
-bundle exec rails db:prepare
-
-# Run data migrations
-echo "Running DATA migrations..."
-bundle exec rake data:migrate
-
-# Run seeds
-echo "Running seeds..."
-bundle exec rake db:seed
-
-# run passed commands
-bundle exec ${@}