Have you ever wondered how big companies can produce complex products like computers, smartphones or even cars… all thanks to OEM …let’s start with the concept What is OEM? In the following article of Blog Thien Minh Please!
What is OEM?
What is OEM? This is the question that most interests many people today.
OEM is abbreviated as O – Original; E-Equipment; M – Factory. These are companies that manufacture parts or equipment that can be fully assembled by other companies, which will market products under their own brand.
investment company
This company is called the parent company, and the parent company always seems to be bigger than the OEMs.
OEM means is an original equipment manufacturer and supplier. Normally, original equipment and component manufacturers always offer extremely favorable prices.
In a nutshell, OEM is the original parts manufacturer.
How does OEM work?
Take the example of a vehicle whose components are mainly manufactured by suppliers OEM.
A car
The truth is that this is a car made up of parts that are not directly produced by the parent company.
engine a car
In many cases, a vehicle’s engine can be manufactured by an OEM company, not to mention all of the engine components such as an oil-operated battery and many other types of machinery: Electrical and hydraulic components.
Also, a car needs wheels to move and wheels are made up of tires and rims and are made by many different companies.
Passengers in the car should be seated in a comfortable position thanks to seats ordered from OEM companies specializing in the production of car seats.
Thanks to companies specializing in the production of airbags, seat belts ensure that passengers can move around safely.
Glass behind the windshield and side windows, lights or even mirrors or radio antennas can be made by OEM manufacturers. And OEMs often sell similar parts to several other automakers.
This is the hydraulic steering box as well as a perfect example of OEM, it is installed by the manufacturer BMW. However, these parts are actually manufactured in the factories of the ZP group, a German multinational that manufactures components for the transport industry.
In a nutshell, OEM includes partners and manufacturing companies:
- The company provides the source of the products.
- The company orders the production of articles.
What are the benefits of OEM?
Helping companies in the product creation process brings more efficiency.
Solve business financial problems.
Shorten the production stage, allowing partners to receive products without having to build a factory.
Companies also do not need to have a lot of experience in this area.
Ensure product quality.
OEM difference with traditional companies
The OEM mode of operation bypasses all or part of the manufacturing process.
Deploying multiple business ideas simultaneously can help tap into the market quickly and efficiently.
I hope the information that Blog Thien Minh Sharing in this article will help you understand better What is OEM? and how they work, and the difference of OEM with the traditional business model.
