Manufacturing?

Question

Take the example of a pen drive. Obviously there is one person or a group that invented it. But there are many manufacturers out there producing pen drives. How those who do not invent the pen drive are able to manufacture it? And how they obtain the machine and automation system that allows the manufacturing process?

Answer 1

Hi Ryan,
As for the actual inventor versus the manufacturer, that part is handled by allowing the technology used to be licensed. In this means, the group of inventors will be paid a commission for each drive sold using their technology. They maintain the patent rights, but allow others to profit from them. As for obtaning the equipment to manufacture their own designs, many use what is called outsourcing. Here, they hire another manufacturing company to make a product under their own name, and bring it to market. The physical design is done by a team of engineers, and then they just pass the blueprint along to the actual production facility. These outsourcing facilities may have to make their own dies and molds to meet the engineering department's specifications. It is typical for a design to start small, low production, then wind up as demand increases. With this scenario, there is little expense layed out at the beginning, but everything is ready for mass production if the product takes off. Of course setting up the equipment to make the product costs a lot more than the actual design phase. Cisco is a good example of this. They design their products in the US and have overseas manufactures do the actual assembly. Hope this helps