Some businesses generate products or systems that other businesses use in their end products. Original equipment manufacturers (OEMs) are the firms that create these source items or systems.
What is an Original Equipment Manufacturer (OEM)?
A value-added reseller (VAR) is a firm that buys a product from a manufacturer and adds value to it by pairing it with additional goods or features. As a result, a value-added reseller is a corporation that changes or increases the capabilities of an existing product before reselling it as a new product.
The word OEM is most commonly used in specific sectors, most notably the automobile and computer industries.
Example
Consider Jack & Engines, a fictitious engine company. Jack’s firm produces automobile engines, and this is their one and only product. Other firms purchase Jack’s engines and use them to construct automobiles. These businesses then sell their vehicles to consumers. As a result, Jack & Engines is a manufacturer of original equipment (OEM).
OEM companies today
Here are a few examples of OEM firms from various industries:
Foxconn Technology Group: A significant contract electronics manufacturer best known for producing iPhones, iPads, and other consumer gadgets for firms such as Apple.
Flex Ltd.: It is a worldwide electronics manufacturing company (EMS) that manufactures original equipment manufacturers (OEMs) for a variety of industries, including automotive, healthcare, and telecommunications.
Magna International Inc.: A global supplier of car components that also serves as an OEM producer for a number of automakers. They provide components as well as systems for companies like Ford, GM, and BMW.
Wistron Corporation: An electronic maker that serves as an OEM producer for companies such as Acer, Microsoft, and Lenovo, creating goods such as laptops, smartphones, and servers.
Quanta Computer Inc.: It is a Taiwanese contract manufacturer that specializes in the production of laptops, servers, and other electronic equipment for firms such as Apple, Dell, and HP.
Bosch: A global engineering and technology corporation that manufactures automotive components, industrial technologies, and consumer products.
Siemens: It is a multinational company with operations in a variety of fields, including healthcare, energy, and industrial automation. It operates as a maker of medical gadgets, power equipment, and other things.
Texas Instruments: It is a semiconductor business that produces a broad variety of integrated circuits and other electronic components used by various equipment makers in areas such as automotive, industrial, and consumer electronics.
Samsung SDI: A Samsung Group company that specializes in the development of batteries and energy storage devices. They provide batteries to a number of electric car manufacturers.
Why are OEM products cheaper?
Traditionally, original equipment manufacturers developed their goods and then sold them to another firm (a value-added reseller), which included this component in its own product sold directly to customers. Because they were not the final product, OEM items were less expensive.
Today, it is considerably easier for individuals to purchase OEM items themselves at a lower cost than they can elsewhere. Because direct purchases from OEMs are so widespread, several of them have become household brands.
What is the difference between OEM and ODM?
ODM is a different idea. A firm that designs items for another company to be included in a final product is known as an original design manufacturer (ODM), similar to an original equipment manufacturer (OEM). So the primary distinction between OEM and ODM is design responsibility. OEM manufacturers focus on producing based on supplied specifications, whereas ODM manufacturers handle both the product’s design and production.
Q&A
– What is an OEM?
An OEM, or Original Equipment Manufacturer, is a company that produces components or products that are used in another company’s end-product. They typically manufacture parts or products based on the specifications and designs provided by the purchasing company.
– How do OEMs differ from ODMs?
OEMs produce components or products based on another company’s designs, while ODMs (Original Design Manufacturers) design and manufacture products that are later branded and sold by another company.
– What types of industries do OEMs serve?
OEMs can be found in various industries, including automotive, electronics, aerospace, healthcare, and consumer goods, among others. They provide components or products for a wide range of applications.
– What are the advantages of using OEM components or products?
Benefits include cost savings, access to specialized expertise, shorter time to market, and reduced manufacturing complexity. OEMs often have established quality control processes, which can improve the reliability of the end product.
– Can startups benefit from working with OEMs?
Yes, startups can benefit from the expertise and resources of OEMs to bring their products to market faster and more cost-effectively. However, they should carefully choose their OEM partners to ensure alignment with their goals.