There are a plethora of acronyms in the electronics and manufacturing industries, and keeping track of what they mean and what the differences are can get very overwhelming for those making their way into the industry.
The terms OEM, EMS, ODM, and CEM, are seemingly used interchangeably — but are they the same?
Knowing the differences and similarities between each will help you make a better decision on what qualities to look for when working with partners or hiring an electronics manufacturer.
Here are four terms to note that are commonly used in the electronic manufacturing industry.
What Does an EMS Partner Provide?
EMS stands for electronic manufacturing services. An EMS partner can take care of the entire manufacturing process; most of them can perform design, manufacturing, distribution, assembly testing, delivery, supply chain management, and electronic component repair. Not all EMS providers offer the same services, but you can expect most of these offerings. EMS partners can be hired for as few or as many tasks as needed to fill a client’s needs, making them excellent support during the development and manufacturing phases.
EMS providers are considered Tier 1 manufacturers — they’re usually massive, multi-billion-dollar companies that provide services to the largest electronics companies and products such as Microsoft’s Xbox, Apple iPhones, and HP Printers.
EMS companies usually climb to the “top 10” lists of the biggest electronic device manufacturers. Their specialty is in mass-producing low-complexity devices — which is why they deal with products that pull millions of dollars in demand. They’ll often work with original equipment manufacturers (OEMs) to accomplish this.
On the other hand, EMS providers typically aren’t the best choice for low- to medium-volume products or higher complexities.
What is an OEM?
Original equipment manufacturers design and produce products based on their buyer’s input. When a client wants to buy a product and put their own company’s logo/name on it, that’s where OEMs come into play. A buyer (the client) markets the finished product with their branding on OEM products. Later, the OEM can sell this product to many companies or use it in other turnkey products.
OEM companies upgrade their designs and further developing their devices. They design a big chunk of their products, and they also have intellectual property rights to them.
Nowadays, original equipment manufacturers often outsource their manufacturing workload, which is why many believe that we should omit the letter “M” in “OEM.”
When partnering up with an OEM, many companies opt for overseas OEM businesses because they are less expensive and quicker than U.S.-based ones.
What Does ODM Mean?
We’ve explained the meaning behind EMS and OEM, but what does ODM mean? Simply put, it stands for original design manufacturer. They’re like artisans in the world of electronic supplies. An ODM-and-client relationship is similar to what you would think of as a white-label deal.
ODMs do the research and create items to sell. They design and manufacture products that they market under their name, and they own the rights to the product.
An example of this would be if a phone company made the world’s best charger and let brands like Apple and Sony buy it to sell to their customers as if it were a Sony or an Apple product.
While contract electronics manufacturers (CEMs) manufacture a broad range of devices, ODMs tend to work with niche products.
What Does a CEM do?
Similar to ODM, there are also CEMs — which stands for contract electronics manufacturers. They specialize in electronic parts like circuit board assembly and electromechanical fabrication.
Contract electronics manufacturers are hired to create products under contract for other companies that are either partially or wholly for OEMs. CEMs are the ones OEMs outsource manufacturing to, so they’re essentially creating parts of the final OEM products.
CEM companies are usually certified as they play a vital role in the end product, and most offer services after the sale. They’re a significant part of various industries such as computing, transportation, communication, gas, oil, etc.
Knowing What’s Right for You
Once you understand the core aspects and differences of all electronic manufacturing acronyms, you can decide what is suitable for you and your product.
When searching for a manufacturing partner to work with, there are onshore and offshore options. Both have their own set of pros and cons. If you choose to go with an onshore manufacturer, here are qualities to look for and tips for selecting a partner.