Original equipment manufacturer
OEM stands for Original Equipment Manufacturer. In this model, the manufacturer produces a product based on the specifications and design provided by another company, which then sells the product under its own brand. The company leveraging OEM services typically controls the design, intellectual property (IP), and marketing, while the OEM focusses on the production aspect.
Advantages of OEM:
- OEM allows businesses to create highly customised products tailored to specific market needs. This is ideal for companies with a clear vision and robust R&D capabilities.
- The client typically retains ownership of the product’s design and intellectual property, providing a competitive edge and protecting innovations.
- Since the product is sold under the client’s brand, there is greater control over brand identity and market positioning.
Challenges of OEM:
- The upfront costs can be significant, especially if extensive design and development are involved. However, these costs can be offset by economies of scale in the long run.
- The design and development process can extend the time it takes to bring a product to market, potentially delaying revenue generation.
Redefining value, The manufacturing revolution, Remanufacturing, refurbishment, repair and direct reuse in the circular economy, published by the United Nations Environment Programme in 2018, suggests that original equipment manufacturer (OEM): ‘Refers to the manufacturer of the original parts or equipment, including the items manufactured, assembled and installed during construction of a new product. The OEM may or may not be responsible for marketing and/or selling of the product.’
It suggests that OEM new: 'Refers to traditional linear manufacturing production process activities that rely on 100 per
cent new material inputs, and which are performed by the original equipment manufacturer (OEM).'
[edit] Related articles on Designing Buildings
- Circular economy.
- Construction waste.
- Disposal.
- Embodied energy.
- End of life.
- End of use.
- Equipment.
- OEM vs ODM: A Comparative Guide for Product Development Success.
- Original Design Manufacturer.
- Manufacturer.
- Pre-demolition audit.
- Recycling.
- Refurbishment.
- Reuse.
- Reused construction products.
- Service life
- Upcycling.
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