OEM vs ODM: What Procurement Teams Should Know Before Product Development

OEM and ODM are common terms in sourcing and custom product development. The choice should begin with the level of design input required, quantity, budget and available time.

What is OEM?

Generally, OEM is suitable for cases where the customer has a specification, concept or product model quite clear and wants the manufacturer to follow that requirement. The level of development may be higher and requires a sampling, material, color, size and production details systematically.

What is ODM?

ODM often starts with the product or manufacturing structure that the factory already exists. Then it is brought to color adjustment, some branding packaging or Feature materials. It is suitable for projects that require rapidity and no need to build all new products.

What kind of choice is good?

No way is better each other. Every case should be considered. Minimum Number Budget Level Custom Development Period, Tooling Risk Production and Delivery Dates

Information to be prepared before talking Supplier

• Reference or type of product required.
• Estimated quantity
• Material / Function / Required Size
• Color and Branding
• Packaging
• Target Budget
• Date of operation or date of delivery
• Quality or Recognition Specifications

Role of Sourcing Partner

Sourcing Partner helps to convert business requirements into requirements that Supplier understands, compares options, coordinates samples and reduces the gap in communication between the suppliers and manufacturers.