What is meant by the terms OEM, EMS, CEM, ODM and why does it matter? (2024)

Electronics Manufacturing

23 Jun, 2020 /BY John Mayes

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The terms, OEM, EMS provider, CEM and ODM are applied to different kinds of companies in the electronics manufacturing value chain. Yet they are frequently confused and misused. This blog post defines them all and outlines the critical differences between them and the roles they play within the sector.


Jump to
  1. OEMs, EMS providers, CEMs and ODMs - what's the difference
  2. What is an OEM
  3. What is an EMS provider?
  4. What is a CEM?
  5. What is an ODM?
  6. Why do OEMs outsource manufacturing
  7. OEMs vs EMS providers - what's the difference?
  8. Conclusion

OEMs, EMS providers, CEMs and ODMs - what's the difference?

These abbreviations refer to different kinds of companies who operate in the electronics manufacturing value chain. They all have different roles in the industry, but sometimes their functions and capabilities can overlap. Let's take them one by one:

What is an OEM?

OEM stands for Original Equipment Manufacturer. An OEM may choose to design and market complete "‘turnkey" products for their customers, or just certain sub-systems or components. In the latter example, an OEM offers components or sub-systems that are then re-sold by another company as part of their end product. But the 'M' in OEM, is often a misnomer these days as many OEMs don't manufacture their products at all. While they design most of their products themselves and own the 'rights' to them (i.e. the intellectual property) they increasingly outsource all or part of their manufacturing to third parties such as EMS providers. In doing so many OEMs choose to focus, solely on product innovation and development.

What is an EMS provider?

An EMS (Electronic Manufacturing Services) provider is the generally accepted term for a contract manufacturer in the electronics field that not only makes products for OEMs but also offers a wide array of value-added services. These services include support with initial ideation and design, DfX (Design for Excellence), supply chain management, configure-to-order, outbound logistics and repair elements.

EMS companies can be huge - in fact, in the so-called "Tier 1" environment they are multi-billion dollar businesses in their own right. So it’s no surprise that they manufacture some of the world’s best-known products. For example, Microsoft's Xbox, Apple’s iPhone, HP printers, and many other famous branded products are all believed to be built by Tier 1 EMS companies.

While these suppliers will often make "Top 10" lists, they specialise in manufacturing high volume, low complexity products and, as a result, demand multimillion-pound spend levels - which is why much of the world's consumer electronics end up shipping from their factories.

However, for OEMs that design and sell low to medium-volume, often complex products, in sectors away from consumer electronics, Tier 1 suppliers may not be the most appropriate fit. Instead, OEMs are encouraged to take an alternative view of the EMS horizon, to find the most appropriate supplier for their business model and product range.

What is a CEM?

CEMs (Contract Electronics Manufacturers) are companies that make products under contract for other companies. They typically take on, wholly or partially, the manufacturing responsibility for OEMs in sectors like industrial, defence, oil and gas, test and measurement, computing, instrumentation, communications and transportation.

Thousands of different products are manufactured each week by contract manufacturers, which are then usually branded with the OEM's name and then sold out by the OEM to its customer base.

What is an ODM?

ODM stands for Original Design Manufacturer. An ODM is similar to a contract electronics manufacturer, but they typically own IP for the product itself, while regular contract electronics manufacturers use their customers' designs and IP. In addition, CEMs often produce a vast array of different products, across multiple markets, whereas ODMs typically specialise in a small number of specific product types.What is meant by the terms OEM, EMS, CEM, ODM and why does it matter? (1)

Why do OEMs outsource manufacturing?

So, why do some of the world’s most successful companies choose to outsource their manufacturing? It’s obviously not because they don’t have the finances available to set up a plant.

Take Apple, for example. Still one of the world’s most valuable companies, their product design capabilities and end-to-end industry knowledge are about as good as it gets. Yet they still choose to outsource.

If we take a long look at their latest model of iPhone - the iPhone 14, with its new emphasis on sustainable technology and repairability - we can see they are grappling with some of the most complex, long term manufacturing challenges facing big tech. Yet they are still pushing the design envelope in new and exciting ways.

Apple have realised there are others around them that can answer specific manufacturing challenges more quickly and cost-effectively than they can. By outsourcing, their manufacturing partners can assist them with DfM (Design for Manufacture) and other logistical challenges while their own teams can focus on innovating and enhancing the latest models.

While this is a classic "high profile, high volume" example, in the very different low-medium volume, medium-high complexity sector the same principle applies - it’s all about core focus.

OEMs vs EMS providers - what's the difference?

The result of this difference in core focus is underlined when you compare EMS providers and OEMs who are still manufacturing their own products:

  • Choice of assembly equipment - OEMs often have surface mount equipment that takes longer to set up but is faster to run. They may also have dedicated build cells and production lines for each product in their range. EMS companies, on the other hand, must offer more agility. They will choose to invest in equipment that supports much faster changeovers and programming that gives them added flexibility but may run at reduced rates.
  • The New Product Introduction (NPI) process - An OEM will design their own products and, therefore, have an established portfolio of products to sell. As a result, the frequency of new products entering the marketplace from them is typically low. If they are currently building the products in-house then there is no real need to share build documentation with a third party supplier. Compare this with a CEM that is working with a wide range of OEMs across multiple markets. They will frequently be asked to deliver "new" products to their customers. As a result, the NPI process for CEMs has to be much more refined and robust as the volume of data they manage, and completeness of this will vary greatly between each different customer and product they manufacture.
  • Supply chain expertise - EMS companies typically manufacture for multiple customers producing multiple products, with the resulting need for a much broader and more global supply chain.
  • Test design expertise - Similarly, the variety of PCB assemblies and "box build" products for which EMS companies have to design test solutions means that they often have a far greater breadth of experience than OEMs' engineers.

OEMs and EMS companies, therefore, have differences in their priorities, core skills and the levels of utilisation of their manufacturing resources. The length of time required for an OEM to recoup these investments is, therefore, usually much longer.

Conclusion

OEMs considering outsourcing their manufacturing should take reassurance from the fact that there are EMS companies that can do everything the OEM can do but can often do it better, more consistently and more efficiently because of the extended range of products and markets they have to service and the expertise and experience that this creates. This breadth of experience can add value right across the OEM’s business.What is meant by the terms OEM, EMS, CEM, ODM and why does it matter? (2)

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What is meant by the terms OEM, EMS, CEM, ODM and why does it matter? (2024)

FAQs

What does OEM and ODM means? ›

OEM stands for Original Equipment Manufacturer, and ODM stands for Original Design Manufacturer.

What does CEM stand for in manufacturing? ›

CEM stands for Contract Electronics Manufacturers.

They are responsible for manufacturing wholly or partially for OEMs. They are relevant in industries such as defense, gas, oil, industrial, computing, test and measurement, communications and transportation, and instrumentation.

What is ODM stand for? ›

An ODM (original design manufacturer) is a company that takes the original specifications of another company or individual and builds the design to the product specifications.

What does EMS stand for in manufacturing? ›

For further explanation, Wikipedia defines electronics manufacturing services (EMS) as a term used for "companies that design, manufacture, test, distribute, and provide return/repair services for electronic components and assemblies for original equipment manufacturers (OEMs).

What is EMS vs OEM vs ODM? ›

An EMS provides electronics manufacturing services; an OEM is an original equipment manufacturer. CEMs are contract electronics manufacturers and ECM is an electronic contract manufacturer. A CM is a contract manufacturer and an ODM is an original design manufacturer.

What is an ODM and examples? ›

ODM (Original Design Manufacturer)

Since the ODM designed the product, it owns the “rights” to it. Example: Consumer electronics like phone cases and chargers are examples of ODM-created products, which are more common in the food industry (think of the term “generic” and “store brand”).

What CEM means? ›

Customer experience management (CEM) is the practice of creating personalized interactions across physical and digital touchpoints.

What does CEM mean in medical terms? ›

An abbreviation for a chemotherapy combination used to treat high-risk neuroblastoma. It includes the drugs carboplatin, etoposide, and melphalan.

What does CEM mean in electronics? ›

What is a CEM? CEMs (Contract Electronics Manufacturers) are companies that make products under contract for other companies.

Is Apple an OEM or ODM? ›

Apple is the OEM. Apple designs its products, but Apple outsources the majority of iPhone manufacturing production to contract electronics solutions providers. Both EMS and ODM.

What is OEM vs ODM manufacturing? ›

Original design manufacturer (ODM)

ODMs design and create the products sold by an OEM. An OEM provides the ODM with the design for a product to build. The ODM then delivers the “ready-to-go” products for an OEM to sell under their company name.

What OEM service means? ›

An original equipment manufacturer (OEM) provides components for the finished products of another company, known as a value-added reseller (VAR). In the computer industry, OEM may refer to the company that buys products and then incorporates or rebrands them into a new product under its own name.

What are the three levels of EMS? ›

The three levels are defined as the Supervising EMS Officer, the Managing EMS Officer and the Executive EMS Officer. We feel that the majority of EMS officers from across the United States can identify their position among these three categories.

What are the two types of EMS? ›

These are usually classified as a Basic Life Support (BLS) level and Advanced Life Support (ALS) level. The typical "all-Advanced Life Support" system operates as a one type fleet of ambulances managing urgent and non-urgent care of patients.

What are the 6 components of EMS? ›

These components include system organization and management, communications, transportation, education and training, assessments of hospitals and specialty care centers.

What is the difference between CEM and OEM? ›

OEM: original equipment manufacturer. EMS: electronics manufacturing service providers. CEM: contract electronics manufacturers. ODM: original design manufacturers.

What does OEM mean in medical device? ›

A medical OEM is an acronym for an Original Equipment Manufacturer that produces medical devices.

What is EMS components? ›

Electronics Manufacturing Services (EMS) is a term used for companies that design, manufacture, test, distribute, and provide return/repair services for electronic components and assemblies for original equipment manufacturers (OEMs). The concept is also referred to as Electronics Contract Manufacturing (ECM).

What's the difference between original and OEM? ›

The OEM parts we carry are precisely the same as the part that came with your car. The difference is that it doesn't carry the manufacturer's logo. OEM parts are just as reliable as genuine parts, but you get them for a better value. Aftermarket.

What is a OEM model? ›

OEM stands for Original Equipment Manufacturer. It is a manufacturing business model in which a new product is developed by the factory based on a design from the buyer but using the supplier's existing category expertise, supply chain, etc (“What is an Original Equipment Manufacturer (OEM)?”).

Why is CEM important? ›

The goal of CEM is to manage customer interactions through each physical and digital touchpoint to deliver personalized, customer-centric experiences that drive brand loyalty and increase revenue.

What does CEM test stand for? ›

CEM stands for the Centre for Evaluation and Monitoring. It was developed by Durham University with a philosophy that access to tutoring should not benefit some students above others, and is therefore designed to be 'uncoachable'. → Check which exam board is used by your prospective grammar school.

What is the purpose of CEM test? ›

The Certified Energy Manager Exam is a certification examination written and administered by the Certified Energy Manager Board that is designed to determine if an individual possesses the skills and knowledge necessary to receive the Certified Energy Manager (CEM) credential.

What does CEM stand for environmental? ›

9 Chapter 1 - Introduction 1.1 What Is CEM Community Environmental Management or CEM is a multi-tiered initiative that uses a va. Page 1. 9. Chapter 1 - Introduction.

What does Mui stand for in medical terms? ›

Major unusual incidents, also called MUIs, are alleged, suspected, or actual occurrences of an incident when there is reason to believe the health and welfare of a person may be adversely affected or the person is placed at a likely risk of harm.

What does GL and CEM mean? ›

The 11+ tests used by secondary schools to help decide which pupils to select are often written by either Granada Learning (GL) or CEM (Centre for Evaluation and Monitoring). This blog provides an insight into the differences between these exam boards and outline how best to prepare for each 11+ test.

What does CEM after a name mean? ›

Certified Energy Manager® - CEM.

What is the full form of EMS in electronics? ›

Electronic manufacturing services (EMS) are provided by companies that design, assemble, produce, and test electronic components and printed circuit board (PCB) assemblies for original equipment manufacturers (OEMs). EMS companies may provide a variety of manufacturing services, including design, assembly, and testing.

What does ECM stand for in manufacturing? ›

Engineering change management (ECM) in modern manufacturing require process optimization.

Can I trust OEM products? ›

Buying OEM hardware or products is perfectly safe and legal, but you need to be aware of the risks. You can usually save a decent amount of money with OEM products, but you might find yourself entirely without support if you run into an issue.

Is Tesla an OEM company? ›

The Lion Electric Company, Anhui Jianghuai Automobile Group Corp Ltd, Tesla Inc, Kia Corp, and Force Motors Limited are the top 10 Automotive OEM companies in 2021 by Enterprise Value to EBITDA ratio (EV/EBITDA).

Is Samsung OEM or ODM? ›

OEM stands for “original equipment manufacturer”. In the smartphone industry, this term refers to companies who manufacture their own phones in their own factories. Some examples of Android OEMs are Samsung, LG, and NUU Mobile.

What companies are ODM? ›

ODMs, like Quanta Computer, Compal Electronics, Wistron and Inventec do not sell products on the open market under their own brand names. 2. An Original Design Manufacturer (ODM) business model is different than electronics manufacturing service providers (EMS) like Sanmina, Celestica, Elcoteq.

Is Dell an ODM? ›

ODM Original Design Manufacturer

An ODM is a factory that has white label designs of say a laptop ready to be customized and labeled by a private label: like Dell. ODMs are accessible to any company that can afford its MOQ.

What is ODM management? ›

Operational Decision Manager combines decision making and change detection tools to provide a business rule management system that is easy to evolve, trace, audit, and test.

What is ODM in supply chain? ›

- ODM (Original Design Manufacturer): The ODM factory has the capability of designing the products. The importer will select the already-existed product design, use their brand name to sell the products by labeling the products or use specific package to makes the products could be recognized as their brand products.

What are the benefits of ODM? ›

Benefits of ODM include:

If any special tools or moulds are required, the supplier pays for them. Usually faster to market than OEM. Your company isn't responsible for paying for new tools or equipment required to manufacture. Save time and money on R&D because it has already been done for you.

What are the 4 types of consent EMS? ›

EMT-Basic/Preparatory/Medical Legal
  • 3.1 Expressed Consent.
  • 3.2 Implied Consent.
  • 3.3 Involuntary Consent.
  • 3.4 Consent of Minors.
  • 3.5 Forcible Restraint.

How many types of EMS are there? ›

The National Registry of EMT New Educational Standards for EMS renamed the provider levels as follows: Emergency Medical Responder (EMR), Emergency Medical Technician (EMT), Advanced EMT (AEMT), and Paramedic.

What are EMS standards? ›

An environmental management system (EMS) can be developed in compliance with the ISO 14001 standard as part of an organization's strategy to implement its environmental policy and address governmental regulations.

Which is better OEM or ODM? ›

When deciding to use an OEM vs an ODM, it really comes down to available resources. If a company has a research and development budget, along with a reasonable time-to-market plan, then using an OEM is a good fit. If time and resources are scarce, then ODM is the route to go to launch a product.

Is OEM the same as original? ›

After all, an OEM product is the same product manufactured by the original manufacturer. Though there are cheaper versions, the price of the OEM product reflects its quality.

What is EMS in semiconductor? ›

EMS - What does it mean

Electronics manufacturing services (EMS) is a term used for companies that design, manufacture, test, distribute, and provide return/repair services for electronic components and assemblies for original equipment manufacturers (OEMs).

What is the difference between manufacturer and OEM? ›

An OEM partner is a company that manufactures products for another business. The manufacturer is the original equipment manufacturer because they manufacture the product for use in other brands.

What are ODM products? ›

ODM, or original design manufacturing, is also also referred to as “private labeling.” This is where an importer selects an already-existing product design from a factory catalog, makes a few small changes and sells it under their own brand name.

Are Tesla cars made in China? ›

More than half of the 1.31 million EVs that Tesla delivered globally in 2022 were made in China.

Are Tesla cars made of plastic or metal? ›

Bauxite: The Tesla Model S body and chassis are built almost entirely from aluminum, which comes from bauxite ore. Aluminum is lightweight, which helps to maximize the range of the battery beyond that of other EVs.

Who supplies battery to Tesla? ›

CATL is the world's largest electric vehicle battery maker and supplier to the likes of Tesla and Ford.

What are examples of OEM? ›

In the hardware industry, the original equipment manufacturer (OEM) usually refers to a company that builds a product designed for end-users, like a PC, laptop, or printer. Apple, HP, Dell, Canon, and Brother are all examples of original equipment manufacturers.

What is the opposite of OEM? ›

An OEM is the opposite of a third-party manufacturer that produces parts for sale in the aftermarket. An OEM refers to something made specifically for the original product, while the aftermarket refers to equipment made by another company that a consumer may use as a replacement.

How can you tell if something is OEM? ›

OEM parts are made by the car manufacturer's factory, not by a third party. They tend to fit perfectly because the car manufacturer backs them. Aftermarket parts are often manufactured by a company other than your car's manufacturer.

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