OEM, EMS, CEM, ODM: Main Differences
In the broadly understood electronics sector, manufacturers have developed specialized niches that enable clients to choose the perfect business partner that suits their specific needs. If you are working in product development or manufacturing company, you may have heard the OEM, ODM, ECM, and EMS abbreviations. However, as they are not entirely understandable for everyone, we are going to take a look at the main differences between them in this article.
What is an OEM?
An OEM (Original Equipment Manufacturer) company produces systems or components used in a third-party end-product. In other words, it is a company that makes products that can be sold by another manufacturer/producer. For example, computer manufacturers often include or integrate diverse OEM parts into their products, such as processors and software.
You can save time and money with OEM products. When deciding to use the third-party components, the final product manufacturer can focus on their specialization and does not have to develop all components and subsystems independently.
What do you need to know about EMS?
An EMS (Electronics Manufacturing Services) supplier is an electronics contract manufacturer that builds electronic components from start to finish: From designing to manufacturing, testing, and distributing a ready-made product. EMS is also responsible for the possible repairs of the OEM-delivered products. In addition to the production side, EMS providers also offer assistance with value-added services such as supply chain management and order setup. This concept is also called electronic contract manufacturing (ECM).
Frequently, an EMS company can be a real deal. Very often, they are multi-billion dollar entities placed on the “Top 10” lists. The largest EMS companies produce some of the world’s most popular products, including HP printers, iPhones, and Xboxes.
CEM (Contract Electronic Manufacturing) defines companies that offer manufacturing and testing (sometimes also designing) services for electronic products and components at the client/product owner’s request. Typically, CEMs take over all or part of OEMs production, especially in the following sectors:
- IT & software
CEMs produce very detailed products of various kinds, so they usually have the necessary certifications and a lot of knowledge and experience. As a result, they provide their clients with knowledge of regulations and industry standards. Also, they often use advanced technologies and have detailed and reliable supply management systems.
Original Design Manufacturer
An ODM (Original Design Manufacturer) is a company that designs and manufactures a product that will eventually be branded with another company’s brand. An ODM is responsible for product research and development. They can also sell the product itself to other buyers who can market it under several different names. That’s because, unlike CEMs, ODM owns the intellectual property of the product.
Additionally, CEM companies usually offer to produce a wide range of differentiated products for many markets, while ODM usually specializes in making a small number of specific types of products. More and more ODM companies have emerged in recent times, and many of them are now large enough to handle production for many clients.
Choosing the right production partner is extremely important because it allows you to manage production needs properly. We hope that the above brief overview of each film’s characteristics will enable you to understand the differences in terminology and make an informed and correct choice.
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