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April 16, 2020
2 minutes to read  

Is my EMS CM also an ODM?

Working with engineers is very similar to working with military personnel in that to communicate effectively, you need to learn acronyms quickly!  Follow along:

An ID firm can create the concept and DS (or DMS) produces the drawings you need for a CM to manufacture your product. OEMs work with CMs to bolster their supply chain. If your OEM produces electronics, then your CM might be an EMS, but may not be an ODM.

East_West_Manufacturing_EMS

Confused yet?  The reality is that each global contract manufacturing services company offers a unique value to your supply chain.  Somewhere among the acronyms is an organization or two that can really help.  Here is a quick simple run-down of the players:

INDUSTRIAL DESIGN

Industrial designers develop the concept for new products. They use a combination of art, science, engineering and business to create an engaging user experience. It is the first step in taking your idea and making it look like a real product.

DESIGN MANUFACTURING SERVICES

These experts turn the concept created by the industrial design team into a set of engineering drawings and bill of materials (specifications, tolerances, dimensions, materials, 3rd party certifications, assembly and test procedures, etc..) that a contract manufacturer uses to make the product.

Engineers in design services

OEM (ORIGINAL EQUIPMENT MANUFACTURER)

According to Investopedia, this is a company whose goods are used as components int he products of another company, which then sells the finished product to consumers. Examples could be automobile parts, air conditioner motors, or electronic controls boards for energy or medical products. An antonym for OEM would be "aftermarket."

ODM (ORIGINAL DESIGN MANUFACTURER)

These companies design and manufacture products; like speakers, cell phone cases and fans. Since this type of company designs the product to sell, it owns the rights (and the bill of materials). The ODM is really focused on the functional design of the product, and their strength is in product design on behalf of the OEM. Design it, prototype it, test it, and build a lot of them.

CM (CONTRACT MANUFACTURER)

This is a company that produces components, sub-assemblies or finished goods for another.

EMS (ELECTRONICS MANUFACTURING SERVICE)

Also the CM for this discussion, the EMS provider will offer feedback about manufacturability. Their focus is the manufacturing of the product.


CMs ARE ADDING VALUE

& BLURRING THE LINES

Today the lines have become less clear as many EMS companies are performing ODM (design) services for their OEM clients.  It is much easier for and EMS to provide ODM services than for an ODM to offer the manufacturing services of an EMS company.  EMS companies became more vertically integrated by adding ODM (design services).  This shift has helped OEMs achieve a greater speed to market as they are working with one organization that understands manufacturing vs. two organizations and a longer development to market timeframe.  The EMS may be at mercy of the ODM unless they move that service in-house. Who loses? You. You simply want your product in the hands of your customers as soon as possible.

Another layer is the EMS (CM, a little redundant) who starts at the DFM stage.  The OEM has a design and product that is achieving some degree of commercial success.  The EMS (CM) can offer DFM feedback to potentially increase the value of the product or reduce cost with component substitution or packaging modification to achieve greater efficiencies in transportation. 

ODM wants to turn your concept or drawing into a product.  A good EMS partner wants to take your product, offer input to make it better (maybe even cheaper) and deliver lots of them to the ship to addresses that you provide.

Roles used to be more clearly defined, but CMs are adding more services to become more valuable to their customers.


FREE White Paper: 5 Important Questions to Ask a Prospective EMS Partner

Filed Under: Contract Manufacturing, EMS