What does OEM mean?

Reference material 1:

What does OEM mean?

OEM, also called OEM and OEM Production was first popular in developed countries such as Europe and the United States. It is a rule of the game for large international companies to find their own comparative advantages, which can reduce production costs and increase brand added value. In recent years, this production method has become more popular in the domestic home appliance industry. For example, TCL has ordered the production of washing machines at Samsung in Suzhou, and Changhong has ordered the production of washing machines at Ningbo Disheng. Specifically, OEM (Orignal Equipment Manufacturer) is the original equipment manufacturer, ODM (Orignal Design Manufacturer) is the original design manufacturer, and OBM (Orignal Brand Manufacturer) is the original brand manufacturer. Party A takes a fancy to Party B's products and asks Party B to produce them using Party A's trademark. For Party A, this is called OEM; for Party A to bring its own technology and design and let Party B process it, this is called ODM; for Party B, it is called ODM. It is said that it is only responsible for producing and processing other people's products and then affixing other people's trademarks. This is called OBM.

Reference 2:

What does OEM mean?

OEM is the abbreviation of English Original Equipment Manufacturer, which means original equipment manufacturing. business.

Reference 3:

What does OEM mean?

Glossary 1: OEM is the abbreviation of Original Equipment Manufacture (original equipment manufacturer). An "OEM production" method, which means that producers do not directly produce products, but use their own "key core technologies" to be responsible for the design, development, and control of sales "channels", and the specific processing tasks are handed over to others. way companies do it. This method is a common phenomenon that gradually emerged around the world after the electronics industry developed greatly. Major international companies such as Microsoft and IBM all adopt this method.

Noun explanation 2: OEM is the abbreviation of Original Equipment Manufacturer in English. According to the literal meaning, it should be translated as original equipment manufacturer. It refers to a manufacturer that produces products and product accessories for another manufacturer according to the requirements of another manufacturer. Also known as OEM production or authorized OEM production. It can represent outsourced processing or subcontracted processing. Domestic custom is called collaborative production, Sanlai processing

What can OEM bring to you (good online name)

OEM customers mean the market. The more OEM customers you have, the more you The product has a higher market share.

Some experts believe that OEM is the product of the increasingly refined industrial division of labor in global economic integration. It can help enterprises increase the allocation of their resources in terms of innovation potential and minimize investment in fixed assets. At present, in China, when a manufacturer wants to extend its own brand, there are three ways in front of it: either do it on its own; or merge some related companies; or export management, export the brand, do OEM production, and carry out the so-called " virtual management". In practice, most companies tend to adopt the third approach.

After a company has mastered the core technology of its products and established a mature marketing network, it can no longer directly invest in production, but can complete the production tasks of its products by letting other companies produce on its behalf. In this way, you only need to pay the material cost and processing fee, without having to bear the risks of equipment depreciation, self-built factories and production management. You can also flexibly place orders on demand according to market changes at any time. This can promote the finished product business to form new operating advantages, cultivate and strengthen the company's inherent expansion power, improve operating potential and management level, and thus move towards a higher level of capital operation.

Origin and development of OEM

OEM is the only way under the trend of socialized mass production and collaboration. It is also one of the effective ways to rationalize resources and is the foundation of socialized mass production. result. In Europe, industry associations with OEM nature have been established as early as the 1960s. In 1998, OEM production and trade reached 350 billion euros, accounting for more than 14% of Europe's total industrial output value. OEM production has become an important part of modern industrial production. . As the development trend of economic globalization further accelerates, OEM demanders are likely to select OEM suppliers on a larger scale, especially moving to countries and regions with low processing and manufacturing costs.

In Asia, in order to quickly occupy the market and reduce production costs, Japanese companies were the first to adopt the international OEM production and trade form. The take-off of the "Four Asian Tigers" is also closely related to OEM. Among them, Taiwan has long become the world's largest OEM base for PCs, and India has also become the world's largest exporter of computer software through OEM. In the IT industry, from technology to components to functional modules of software, who is the all-powerful one? When Compaq President Pfeiffer talked about this issue, he said: "Use the most direct way to make money!" and publicly stated that he would save the burden brought by those so-called assets (factories, equipment, office buildings, etc.). Some people even say: OEM creates the entire IT industry! The American Nike company has an annual sales revenue of up to 2 billion US dollars, but it does not have a production factory. It only focuses on research, design and marketing. All its products adopt the OEM method, and it has become a successful example of OEM operations in the world.

The reasons for the rapid development of OEM in international trade

The OEM method is extremely widely used in the manufacturing industry, especially in the rapidly developing information industry. For example, according to the statistics of IDC (International Digital Group), the world's authoritative statistical organization, more than 95% of the hard drives used by global personal computer manufacturers are provided by the three major hard drive suppliers, Seagate, Quantum and WestDigital, in the form of OEM. The reason why it can be widely used is that it has adapted to the needs of the new competitive situation brought about by the rapid development of global science and technology since the 1990s. The OEM method has adapted to the development of this new situation due to its flexible and effective management characteristics, and has been widely used.

OEM adapts to the needs of the rapid development of science and technology

The rapid development of science and technology has led to the shortening of product life cycles. The competitive approach of enterprises is changing from a production-focused approach that focuses on expanding production scale and reducing production costs to a market-focused approach that focuses on the application of new technologies and the rapid launch of new products. According to IDC data, the life cycle of electronic products averaged 10 to 12 years in the 1950s and 1960s, but in the 1990s this value dropped to 6 to 18 months. In the electronic information age where new technologies are emerging one after another, business operators sometimes increase their huge investment in the research and development of new products in order to gain competition. In order to transform research results into products as soon as possible to occupy the market, many large companies do not invest in key technologies. Produce sexual parts by yourself, and outsource auxiliary parts to other companies in the form of OEM. This can not only shorten the production cycle, but also use a lot of money saved for production equipment for research and development, so that companies can often A virtuous cycle continues in terms of response speed. Enterprises can also adjust production scale in a timely manner according to changes in market trends, making it possible to maintain a flexible and flexible production mechanism that adapts to market development dynamics. From another perspective, the product life cycle is shortened, and the mental wear and tear of enterprises' investment in production equipment will inevitably increase. In order to reduce opportunity costs, OEM production is often adopted, which can not but be said to be a "straw boat" that makes full use of external resources. The strategy of "borrowing arrows". (Group Announcement)

OEM adapts to the development needs of world-class brands

Economic competition is increasingly unfolding on a global scale, and brands and channels increasingly reflect the differences in the final value of actual goods. It plays an important role, and the inclusion of the original manufacturer's trademark in the OEM method illustrates the importance of this point.

In the economic competition, people are increasingly aware of the importance of brand. It is precisely because only by establishing a good image among consumers can we win the support of more marketing channel partners and through cooperation with consumers. The concerted efforts of channel partners enable products to penetrate into more habitual consumer groups. For this reason, many multinational companies with good operating performance have always focused on the construction of brand image and marketing channels. Therefore, we make full use of the OEM method to push mature products or products with production advantages of other companies into our own marketing channels, and use our advantages in value-added services to win a wider range of consumers. This can also be called " A good strategy to lay eggs by borrowing chickens.

OEM adapts to the needs of the development of global information management systems

With the development of science and technology, computer integrated production systems (CIMS) are gradually being widely used in the production process, and quality has It has gradually become a controllable factor in the production process, which provides OEM manufacturers with material guarantees to provide consumers with products of corresponding quality that meet consumer needs. This is one of the reasons why the OEM method is so popular in the information industry with a high degree of production automation. It is also one of the reasons why multinational companies with only more than 100,000 employees such as IBM and HP drive sales of tens of billions of dollars. one. Investing limited resources in channel construction also provides a fundamental guarantee for companies to improve their market response speed.

OEM adapts to provide customers with complete solutions

In the era of information economy, the division of labor in the industry is becoming more and more detailed, new products are emerging in an endless stream, and the high-tech content is gradually increasing. Ultimately, consumers are not The product's technological content may determine its applicability, precisely because what they need is a full range of solutions-based services. To a certain extent, modern enterprise competition is to assess the potential of enterprises to discover consumer needs and provide comprehensive solutions. The importance of a single product is gradually decreasing. The real problem is how to meet increasingly complex and increasingly personalized consumer needs.

The OEM method proposes a good way: that is, the company integrates other products produced in the OEM method based on its own proprietary technology, thereby providing customers with solutions that suit their respective needs. This promotes It has promoted the development of the company's own technology, strengthened the influence of its own brand, and enabled customers to receive more comprehensive, timely and thoughtful services from comprehensive solutions. From another perspective, the enterprises that are OEMs have also developed under the leadership of the enterprises, which fully reflects the principle of rational allocation of resources. In addition, operating in the OEM mode can more effectively allocate limited internal resources of the enterprise, minimize the level of management, and improve the efficiency of operation and management.

OEM adapts to the need to establish novel competitive advantages

The development of modern economy has changed people’s view of pure competition. Competition and cooperation have become the two major driving forces for the development of modern enterprises. For products where we have advantages, using competitors' OEM products makes our advantages more prominent. At the same time, competitors also have new room for development, and competition turns into cooperation. At the same time, in this day of rapid development of science and technology, it is difficult for a company to master all the patented technologies of a product. The integrity of intellectual property rights can be ensured by bringing products to each other in the form of OEM. This avoids disputes or waste of resources caused by repeated development, and can promote the market influence of a certain technology, making it a new industrial standard or a standard for group alliances, making disorderly competition relatively orderly. . lt；(change yourself)