What is OEM?
Original Equipment Manufacturing is another form of contract manufacturing. However, unlike ODM, an OEM factory manufactures products based on your unique design and specifications.A famous example of an OEM would be Foxconn — Apple’s main iPhone manufacturer. While Apple handles the research and development of the iPhone, Foxconn owns most of the factories that make them.
OEM: Advantages and Disadvantages
Advantages
1. You retain total control over the design of your product and intellectual property. This means you have a better bargaining position and can easily switch to other suppliers.
2. It is easy to get quotes from manufacturers since you have a detailed design, specifications, and a bill of materials (BOM) for your product.
Disadvantages
1. The product development time for OEM is usually longer than ODM. You might have to wait for up to 8 months before your product is ready, whereas product development time for ODM ranges from 1 week to 4 weeks.
2. It is resource-intensive and can take you years to create unique products.
3. You cannot rely on OEMs to troubleshoot or detect faults in your design. They manufacture products based solely on the design data you provide.
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