OEM is the abbreviation of English original equipment manufacturer, also called fixed-point production, commonly known as OEM. The basic meaning is that brand producers are not directly producing products, but are responsible for designing and developing new products and controlling sales channels by using key core technologies they have mastered. OEM refers to the original equipment manufacturer.
The OEM entrusts other manufacturers of similar products to produce specific processing tasks through contract ordering, and then buys out the ordered products at low prices and directly labels their own brands and trademarks. This cooperative way of entrusting others to produce is called OEM for short. The manufacturer who undertakes the processing task is called OEM, and the products it produces are called OEM products. It can be seen that fixed-point production belongs to the "OEM" mode in processing trade and is the export of labor services with commodities as the carrier in international trade.
Advantages of OEM manufacturers
1, enter the international market
Competition in domestic household appliances and other industries is becoming increasingly fierce, and the market tends to be saturated. Some domestic manufacturing enterprises do OEM work for foreign brands in order to open up the market. Enhance the global awareness of enterprises.
2. Reduce production costs
Economies of scale generally exist in modern production, that is, with the expansion of output scale, the unit cost tends to decrease. This may come from the deepening of specialization and the distribution of fixed costs. If the enterprise itself has this overcapacity, the effect of cost reduction will be more obvious. Participating in OEM supply means the expansion of output scale, which not only increases product sales, but also reduces costs.
3. Learning experience
Enterprises that provide OEM often play an important role in the product supply chain of OEM buyers. OEM buyers can have strong strength in production management, marketing and product development. In the process of cooperation, OEM suppliers can organize production according to the requirements of the buyer in terms of product quality control, cost control and operational efficiency control. With advanced organizational control, we can accumulate experience from "learning by doing" and improve the management level of enterprises.