What does OEM mean and how does it work?
OEM is now an integral part of the production chain of many products. Many sectors benefit from it, from IT to automotive.
Before reaching us, materials, gadgets and individual parts go through a long, invisible manufacturing process. Therefore, not all of their components may come from the manufacturer itself, there are some that come from the OEM. But what is it really about? We talk about it.
OEM: original equipment manufacturer
A Original instrument manufacturer or OEM (Original Equipment Manufacturer) may be defined by a company that manufactures products or parts for another company. The latter then sells them to its customers under its own brand. In other cases, these assets are used to build a completely new system.
In general, OEMs affect equipment across sectors automotive and IT. For example, not all parts that make up a Lenovo computer are necessarily manufactured by the brand. On the contrary, it is quite possible that certain parts (processor or memory module) are OEM products.
How is an OEM product built, paired and resold?
In fact, before introducing any solution to the market, companies first look for the best way to meet the needs of their customers. So they can evaluate several options. This includes purchase, manufacture, construction or partnership. Therefore, by partnering with an OEM, an organization has the opportunity to minimize manufacturing investments. Thus, it not only reduces material and production costs, but also has expertise in product design. And all this, in addition to an obviously shorter life cycle. In this way, the organization can focus on its core competencies using the best components.
Plus, OEMs no longer need to add anything to the product. On the contrary, they can easily mark their logo there. Moreover, it does not prevent other companies that do not sell anything under their own brand. Likewise, there are those who do both.
OEM and ODM: what are the differences?
ODM is short for “. Original Design Manufacturer “. ODMs also produce equipment, but based on the product specification or design of another company. From this point on, the equipment carries the brand name as well as the logo of the equipment manufacturer that produced it. The main advantage here is the low cost of production associated with outsourcing.
Cheaper products
Indeed, OEM products are cheaper. main reason economies of scale. In fact, the company has alliances with other organizations to produce a large number of products. Thanks to this, the price and production time are significantly reduced.
Original Equipment Manufacturer and Aftermarket
As the name suggests, OEM manufacturesoriginal equipment. On the other hand, the aftermarket designs similar products and equipment that can be substituted for the OEM’s products (aftermarket products). This means that these products are not genuine. Domestic or foreign companies are manufacturers without the permission of equipment manufacturers. And of course, there is no guarantee that such products will perform as well as OEM products.
Original Equipment Manufacturer and Value Added Reseller
Value Added Resellers (VARs) market OEM products. Although they integrate in a certain way before they act additional functions. The two share a mutually beneficial relationship. VARs are a great help when it comes to selling products. They sell OEM products with more important features for VARs.
Drawing
For example, company A produces memory cards with several versions. These products are then sold to various computer manufacturers or retailers. These are then called “value-added resellers”. They will sell the goods directly to the target audience.
Other Original Equipment Manufacturer Specifications
Sale of licenses
Original equipment manufacturers usually sell product licenses. This is to use them in the VARs that they sell their parts to.
OEM on hardware
An OEM generally involves a company that manufactures a “product” for end users. This can be especially a computer or a printer. Apple, HP, Dell, Canon or Brother are specific examples of OEMs. OEM hardware, on the other hand, is a term used to refer to processors, fans, motherboards, hard drives, memory chips, and many other parts that make up the previously mentioned “products.” OEM hardware is readily available either online, from a retail product manufacturer, or through an OEM.
However, OEM hardware is almost always defective. It rarely comes with customer support, and its warranty period is also very short. Sometimes these materials lack some of the many accessories needed to make them work, such as cables or adapters. Indeed, OEM hardware, as its name officially suggests, is primarily designed for OEMs. So, to use it for a complete system, you need to add certain elements like technical support or warranties.
OEM in software
Often, manufacturers such as HP, Dell or Samsung purchase Windows as OEM software from Microsoft. Then they package it with the PC they make. This is a form of OEM in software. On the other hand, manufacturers of printers, scanners or digital cameras also buy OEM software. Typically, these devices come with an accompanying app. This is OEM software. So, just like hardware, OEM software doesn’t provide much except the core software and its license key.
Why buy from original equipment manufacturers?
Buying products from OEMs is very beneficial. Some of these strengths.
Good quality
Although there are cheaper versions, the OEM product reflects its quality. In any case, this is truly a product made by the original manufacturer.
Continuity
Along with good quality, OEM products are also durable. Of course, it is always better to opt for an original tire than a spare tire, for example, to buy a spare tire. So you can be sure of the materials used to make it. Same goes for all other products.
Lifelong
Compared to aftermarket parts, OEM parts often have a longer lifespan.
