OEM vs ODM: Understanding the Difference

What is the difference between OEM and ODM?

OEMs and ODMs are two acronyms that you will often see in the manufacturing world. OEM stands for Original Equipment Manufacturer, while ODMs stand for Original Design Manufacturers. However, many people who work in this industry often confuse these terms and use them interchangeably; they certainly do not mean the same thing. In the following blog post, we will discuss what ODMs and OEMs are and how they differ from one another so that you can make sure to differentiate between a company’s strategy when designing products!

Original Equipment Manufacturer

So, what is OEM? As hinted in the above heading, OEM stands for Original Equipment Manufacturer. Basically, that means OEMs manufacture their own products from scratch. Original Equipment Manufacturers (OEM) sell highly customized products designed to suit a client’s specifications.

OEMs are an important part of product development for companies that have all the resources required to come up with a product from the ground up. OEMs are manufacturers that have research and development capabilities but do not produce their own products. Essentially, an OEM allows a business to produce a product and then get it on the market without needing to build, staff, or run an entire factory.

This means OEMs can custom-build a product from scratch according to the client’s requirements which really helps fulfill customer satisfaction.

OEMs are particularly popular in the automotive industry. As an example, GM’s Cadillac is a well-known OEM that manufactures its own airbags and seat belts – albeit to varying standards of quality. On the other hand, ODMs produce components for products but do not manufacture goods from scratch as OEMs do. A second example in the tech industry would be the Eluktronics laptop company. The company assembles high-end gaming parts and customs fits them to custom-built gaming rigs for a profit.

What the OEM’s customer does:

  • Product design
  • Market research
  • Marketing
  • Product testing

What the OEM does:

Manufactures the product
A good example of an OEM company is Apple’s relationship with Foxconn is another great example of an OEM company. Apple designs all of its products, from the iPhone to the Macbook, and then contracts ODMs like Foxconn to manufacture them for a flat price per unit. In addition, Apple also frequently engages other OEMs to produce sub-components that are then sent to Foxconn. ODMs could be considered partners for OEMs.

Original Design Manufacturing

~What are ODMs?~

ODM stands for Original Design Manufacturer or sometimes just called original equipment manufacturer too (although there’s an acronym conflict there). ODMs provide engineering services such as conceptualization, prototyping, testing and manufacturing to other companies who cannot do these things themselves.

In either case, this company sells only what you give them in terms of specs because they don’t produce any parts at all – everything comes from someone else. They then assemble your product based on your instructions or specifications, but always use other manufacturers. ODMs are capable of meeting a company’s needs whether it is for the product they desire to manufacture themselves or sourcing and manufacturing somebody else’s design.

The main difference between ODM vs OEM is that ODMs only provide engineering services while OEMs produce their own products from scratch with no outsourcing involved in production such as when ODMs assemble your product based on what you tell them.

This blog post will help you determine which type of manufacturer suits your business best so make sure you continue reading!

What ODMs do:

  • Design and produce parts or subsystems for another company’s product
  • Provide contract manufacturing services to their client companies
  • Produce customized versions of a finished component that has been designed by themselves or others (e.g., plastic injection molding)
  • An example would be Daikin Industries which makes air conditioners and is not a customer to any ODM in order to meet its production needs – this is because it produces all its own equipment internally such as compressors and refrigeration units! ODMs often have research laboratories where they develop new technology; however, ODMs are not usually capable of producing a range of products.

~What are some examples of ODMs? ~~

Daikin Industries (air conditioner), Philips Lighting Company (LED lighting) – these companies manufacture their own products from scratch with no outsourcing involved in production such as when ODMs assemble your product based on what you tell them!

GE Healthcare is an example where GE manufactures medical equipment which is not a customer to any ODM in order to meet its production needs – this is because it produces all its own equipment internally such as compressors and refrigeration units! ODM’s often research laboratories develop new technology but do not usually capable of producing a range of products.

~What are ODMs mainly used for? ~~

ODM’s can save you money on R&D costs by outsourcing parts that specialize in just one area instead of having an in-house team and have a lower risk profile because they only produce parts, not the complete product, but ODMS do not manufacture any products from scratch. ODMS may also offer design services to companies that want to outsource their manufacturing process and reduce production costs as well as help them find vendors and manufacturers with more experience than themselves. ODMS could be authorized or unauthorized; authorized ODMS provide service according to specific specifications while unauthorized ODMs use your designs without permission!

 

~What is the difference between ODMs and OEMs? ~~

OEM stands for Original Equipment Manufacturer which means they manufacture their own product from scratch while ODMs only produce components or subsystems that go into another company’s finished product such as air conditioners, refrigeration units etc. ODMS are able to design any part you need but do not have production capabilities so will use other manufacturers in order to assemble your complete product – this method eliminates all risk because it provides both design and manufacturing services!

The main benefit of using ODMS is that they can save you money on R&D costs by outsourcing parts that specialize in just one area instead of having an in-house team. ODMS also have a lower risk profile because they only produce parts and not the complete product.

In short:

– ODMs design products for companies who have already done most of their work designing it themselves (or at least come with an idea)

– ODM’s typically do not sell customizations like OEMs would be expected to do. ODMS could provide a number of different options but they aren’t always customized as an original equipment manufacturer would be.

– ODMs provide design services but do not manufacture products from scratch like OEMs would

– ODMS typically work with companies who are looking to produce a product at a lower cost due to their lack of resources and time commitment in designing the original idea

 

Benefits of both ODMs and OEMs

While ODMs and OEMs are different, they both are beneficial is the manufacturing space. Here are a few of the benefits of both ODMs and OEMs.

– ODMs are able to customize your product in a way that OEMs usually cannot

– ODMS have the ability and expertise to provide design services as well as manufacturing which allows them to save you more money on R&D because they don’t need people who specialize in just one area. In order for ODMs to make an offer, they want all aspects of production complete. They will design any part required by customers

– ODMS typically work with companies looking to produce a product at a lower cost due to their lack of resources or time commitment in designing the original idea. ODM’s often research laboratories develop new technology but do not usually capable of producing a range of products – these labs could be authorized or unauthorized; authorized ODMS provide service according to specific specifications while unauthorized ODMs use your designs without permission.

– The main benefit of using ODMS is that they can save you money on R&D costs by outsourcing parts that specialize in just one area instead of having an in-house team

ODM’s are a great option for companies who want to outsource their manufacturing process and reduce production costs as well as help them find vendors and manufacturers with more experience than themselves. ODMS could be authorized or unauthorized; authorized ODMS provide service according to specific specifications whereas unauthorized ODMs use your designs without permission!

~What about OEMs? ~~

OEM stands for Original Equipment Manufacturer which means they manufacture their own product from scratch – this is the opposite of ODMS who use other manufacturers to assemble your product. OEMs are able to design any part you need but do not have production capabilities so will use other manufacturers in order to assemble your complete product – this method eliminates all risk because it provides both design and manufacturing services!

The main benefit of using ODMs is that they can save you money on R&D costs by outsourcing parts that specialize in just one area instead of having an in-house team.

~Conclusion~

In conclusion, there is quite a big difference between an Original Equipment Manufacturer (OEM) and an Original Design Manufacturer (ODM). An ODM only deals with engineering services while an OEM produces products from scratch. ODMs are more flexible in that they can manufacture for others, but ODMs also have a lower level of control over the product and design process than an OEM does because ODM’s work is based on specifications given to them by somebody else.

Frequently Asked Questions

Is Apple OEM or ODM?

Apple is considered as an OEM because while they do their own research and development for the products, they do outsource other companies to build parts for them. Essentially, they are the manufacturer and outsourced parts to build their product.

Does ODMS mean the same as OEM?

No, ODMs means they provide design services but do not manufacture products from scratch like OEMs would. ODMS typically work with companies who are looking to produce a product at a lower cost due to their lack of resources and time commitment in designing the original idea

Are ODMs cheaper than OEMs?

ODM’s often research laboratories develop new technology but do not usually capable of producing a range of products – these labs could be authorized or unauthorized; authorized ODMS provide service according to specific specifications while unauthorized ODMs use your designs without permission! The main benefit is that you can save money on R&D costs by outsourcing parts that specialize in just one area instead of having an in-house team. ODMs are a great option for companies who want to outsource their manufacturing process and reduce production costs as well as help them find vendors and manufacturers with more experience than themselves

Does OEM mean the same thing?

No, OEMs means they manufacture products from scratch – this is the opposite of ODMS who use other manufacturers to assemble your product. They are able to design any part you need but do not have production capabilities so will use other manufacturers in order to assemble your complete product – this method eliminates all risk because it provides both design and manufacturing services! The main benefit is that you can save money on R&D costs by outsourcing parts that specialize in just one area instead of having an in-house team. ODMs are a great option for companies who want to outsource their manufacturing process and reduce production costs as well as help them find vendors and manufacturers with more experience than themselves

What is the difference between ODMS and OEMs?

ODM stands for Original Design Manufacturer which means they do not manufacture products from scratch like OEMs would; ODMS typically work with companies that are looking to produce a product at a lower cost due to their lack of resources or time commitment in designing the original idea while OEM’s save money on R&D because it provides both design and manufacturing services! The main benefit is that you can save money on R&D costs by outsourcing parts that specialize in just one area instead of having an in-house team. ODMs are a great option for companies who want to outsource their manufacturing process and reduce production costs as well as help them find vendors and manufacturers with more experience than themselves

What is OEM?

Original Equipment Manufacturer – this means they manufacture products from scratch! ODMS typically work with companies that are looking to produce a product at a lower cost due to their lack of resources or time commitment in designing the original idea while OEM’s save money on R&D because it provides both design and manufacturing services! The main benefit is that you can save money on R&D costs by outsourcing parts that specialize in just one area instead of having an in-house team. ODMs are a great option for companies who want to outsource their manufacturing process and reduce production costs as well as help them find vendors and manufacturers with more experience than themselves

What is ODMS?

Original Design Manufacturer – this means they do not manufacture products from scratch like OEMs would; ODMS typically work with companies that are looking to produce a product at a lower cost due to their lack of resources or time commitment in designing the original idea while OEM’s save money on R&D because it provides both design and manufacturing services! The main benefit is that you can save money on R&D costs by outsourcing parts that specialize in just one area instead of having an in-house team. ODMs are a great option for companies who want to outsource their manufacturing process and reduce production costs as well as help them find vendors and manufacturers with more experience than themselves