Design manufacture service (DMS) is a
business model
A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, social, ...
that combines contract product design with
contract manufacturing
A contract manufacturer (CM) is a manufacturer that contracts with a firm for components or products (in which case it is a turnkey supplier). It is a form of outsourcing. A contract manufacturer performing packaging operations is called copacker o ...
as a service to other companies that have insufficient or do not possess the required resources. Often the customer is focused on other aspects of their business or their existing resources may simply be overloaded. DMS providers may also provide other services such as order fulfillment,
logistics
Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics manages the flow of goods between the point of origin and the point of consumption to meet the requirements of ...
and
aftermarket service.
Because of the high skill-levels required in each field, DMS firms specialize in different product categories. These might include medical devices, medical instruments, automotive, communications, etc. Typically, these are areas that require a relatively higher level of internal infrastructure or regulatory controls than the customer possesses. Certain industries including aviation and medical devices require special development and manufacturing practices required by international, Federal and local regulations.
One of the key differences between the DMS model and other contract manufacturing such as
original design manufacturer
An original design manufacturer is a company that designs and manufactures a product that is eventually rebranded by another firm for sale. Such companies allow the firm that owns or licenses the brand to produce products while having to engage in ...
(ODM), is the way
intellectual property
Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, cop ...
(IP) is treated. In the DMS model, IP comes from three basic sources. These include (a) IP previously owned and contributed by the customer, (b) IP previously owned and contributed to the product by the DMS and (c) new or original IP created at the request of and paid by the customer. The latter (c) is commonly referred to as "
work for hire
A work made for hire (work for hire or WFH), in copyright law in the United States, is a work that is subject to copyright and is created by employees as part of their job or some limited types of works for which all parties agree in writing to the ...
". With DMS, the customer ultimately has rights to all of the IP embodied in the product. This is especially important in industries like medical devices where customer owned IP is critical. Some contract product development models, including
Original Design Manufacturing (ODM),
[{{Cite web, url=https://www.answers.com/search, title=Answers - The Most Trusted Place for Answering Life's Questions, website=Answers.com, language=en, access-date=2019-06-04] allow the developer, instead of the customer, to retain IP rights.
References
Business models
Business terms
Manufacturing
Outsourcing