The activities of an original equipment manufacturer (OEM), an original design manufacturer (ODM), an electronic manufacturing service (EMS) provider and a contract electronics manufacturer (CEM) are often confused.
The confusion stems, partly, from the fact that these terms are relatively new and in part, because the activities of these service providers frequently overlap.
Why it is vital to know the difference between an OEM, an ODM, an EMS and a CEM
The terms OEM, ODM, EMS and CEM are becoming increasingly commonplace in the world of electronics manufacturing. This is a result of the rapid expansion and fragmentation of the electronics products industry. This change has been caused by a fast-moving global trend for digitalisation and the increased connectivity that has come with it.
In today’s marketplace, it is very important to know the difference between these providers and to have a clear understanding of the specific services that they provide. More and more companies are outsourcing manufacturing and assembly, and choosing the correct manufacturing partner is integral to the success of this strategy. You need a partnership that is best suited to your manufacturing needs.
What is an OEM, an ODM, an EMS and a CEM?
To help you make the right decision and select the correct manufacturing partner, we have created this quick guide to OEMs, ODMs, EMSs and CEMs, and what they do:
- An OEM is a company that produces parts and equipment that may be marketed and retailed by another manufacturer. However, increasingly OEMs are focusing on product innovation and development, and outsourcing some or all of the manufacturing to partners, such as MPE Electronics.
- An ODM is a company that designs and manufactures a product that is subsequently rebranded and retailed by another business (which doesn’t carry out any manufacturing). ODMs are similar to CEMs, but ODMs usually make only a small number of products and own the intellectual property relating to these products.
- An EMS provider is a contract electronics manufacturer that makes products, such as electronic components and assemblies, for OEMs, and provides specialist assistance in a range of related areas, including design, software development, supply chain management, testing, distribution and repairs.
- A CEM is similar to an EMS provider. They manufacture products and assemblies under contract for other companies, often for OEMs in major industries. However, while CEMs offer support with regard to design, supply chain management, testing and distribution, they generally do not provide services relating to software and applications.
Where does MPE Electronics fit into the electronics manufacturing landscape?
MPE Electronics is a CEM, a contract electronics manufacturer of printed circuit board assemblies (PCBAs) and electronic assemblies. OEM and Tier 1 manufacturers across the industry spectrum outsource PCB and product assembly to MPE and take advantage of a range of business benefits.
Want to know more about how a CEM works? Our blog contains information on how to create a partnership with a CEM, the right time to involve a CEM in your product manufacturing process, how to tell if your CEM partnership is performing successfully, and more.