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What is ODM?
By Mark L. Casey | August 6, 2008
The acronym ODM remains a bit elusive for many people I encounter. ODM is Original Design Manufacturer (or manufacturing). The similar acronym OEM, Original Equipment Manufacturer, seems to be well understood by most people. An OEM is a company that manufactures its own products for sale under its own brand names. OEMs may manufacture their products in their own captive factories, in outsourced manufacturing plants, or they may use a combination of the two.
So, what is an Original Design Manufacturer? An example would be a manufacturer that is an expert in the design and manufacture of digital video disc (DVD) players. This firm may have its own branded DVD players that it sells into established sales channels. It also offers its DVD player technology to other firms that would like to “private label” the DVD players. When the firm sells its DVD players to other firms and puts their brand name on the units, it is acting as an ODM.
The personal computer industry has many players that function as ODMs for both desktop and laptop computers. The ODM concept is general enough that it applies to many industries in addition to electronics. For companies that are looking to enter a new market segment, using an ODM can be an effective strategy.
Topics: Contract Manufacturing, Design, Global Sourcing, Original Design Manufacturing, Products, Services |
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