Talk:Original equipment manufacturer
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[edit] Origin of the term
OEM has been around for much longer than the 1950's. It has been part of the automotive vocabulary since the 20's or 30's. It has also been used by other "hard goods" manufacturers such as washers and dryers.
In these markets there are 2 kinds of replacement parts - OEM, or "aftermarket".
Ford is an OEM. As is widely known, they are basically a company that puts together cars and trucks. Their factories are called just what they are "assembly plants." They rely on literally thousands of suppliers who sell everything from tire valves to the springs in the car seats to Ford. These suppliers can claim to be "OEM Suppliers."
Here is an example of how it works -
Let's say Ford contracts with Goodyear for fan belts for a specific application. Goodyear manufacturese the belt with Ford's name and part number on the belt. They will supply a large quantity of the belts in bulk for use in the assembly process. And, they will also supply some packaged in "sleeves" for retail sale by the Ford dealer's parts departments. These belts, both the bulk for assembly and the sleeved, Ford branded belts for sale by the dealers are referred to as OEM, since they have the Ford label.
In many cases there is an exclusivisity agreement in the contract, which would keep a supplier from selling that item under their own brand, or to anyone else for rebranding. That may be the case with the fan belt.
But, in this case, Goodyear already sells fan belts under it's own brand and several others, and is a supplier of private label belts to others. So, while maybe not exactly the same dimensions as the belt they make for Ford, they do have a belt in their product line that will serve the same purpose, on the same vehicle.
So, Goodyear can now say they have a belt for that application. It won't say Ford, it will be marked as a Goodyear, or Kelly-Springfield, or some other brand. And it's won't be OEM. They cannot say on the belt sleeve "We make this for Ford." They can say they are an OEM supplier. The aftermarket belt may actually be superior to the one they made for Ford. They can't claim that, either.
So, when Joe Carowner needs a fan belt for his Ford product, he can go to the local Ford dealer and buy an OEM fan belt for let's say $ 25.00. Or he can go to his local auto parts store and by virtually the same aftermarket belt under the Goodyear label for probably $ 15.00.
In some cases, "name brand" parts can be both OEM and aftermarket. Tires are one example, all OEM tires are also available in the aftermarket. Spark plugs are another example. The car manufacturers don't have their own brand of spark plugs, but use the same ones that are available in the aftermarket.
These terms, OEM and aftermarket, have been in use ever since the first aftermarket replacement parts began being marketed. By the 1920's there were any number of companies selling replacement parts. While there is no definitive proof when the term OEM was first used, it has been around quite some time.
PeteVA
[edit] Cleanup
There is a lot of junk in this article, and it's all unsourced. Most of it should be just deleted, I think. I tried to clean it up a bit before, but my deletions got reverted. Note though that the section on contradictory usage is all sourced. Folding Chair 04:31, 13 August 2007 (UTC)
[edit] Merge proposal
There is really no reason to have separate articles for Original Equipment Manufacturer and Original Equipment Manufacturers, so I merged them Folding Chair 01:08, 12 March 2007 (UTC)
[edit] Contradictory Usage in Manufacturing
I think the discussion of confused usage is integral to the article, as I have seen no such discussion anywhere else. Folding Chair 07:17, 8 March 2007 (UTC)
[edit] Cleanup
I just cleaned it up quite a bit, placing much of the intro material into sections of the main body. It will be easier for those with knowledge of specific areas to edit the individual sections now that they are under their own titles. Folding Chair 07:34, 8 March 2007 (UTC)
[edit] Deleted "term origin" section
There were contradictory stories given for the origins of the term OEM in the two articles that were merged (see discussion above), and since neither story was attributed to a source I deleted the section altogether. If anyone finds the true etymology of the term and can cite the source, please reinstate the section. Folding Chair 01:42, 12 March 2007 (UTC)
[edit] "team origin" conflict
The article says: "OEM is a term that predates the computer/electronics industry."
...and later states that...
"The term OEM (original equipment manufacturer) was coined in the 1950s by IBM.", which is part of the computer/electronics industry.
[edit] Deleted "misuses" section
I deleted the 'misuses' section because it began with the phrase 'People who heard the term adopted...' without a source for this anecdote. Also, I found it difficult to understand what was being communicated. Feel free to reinstate it if you can cite a source. Folding Chair 07:44, 8 March 2007 (UTC)
[edit] Cars
what is OEM in context of a car?
probably no such thing as n OEM car.. but OEM car parts are parts made for a particular car by a different company
OEM parts are often devoid of the warranty that VAR's offer.
[edit] Abbreviation vs. Acronym
"An original equipment manufacturer (frequently abbreviated OEM)" i'm sorry but isn't OEM an acronym or is it used as an abbreviation in the context of the sentence?
Response: Actually, "acronym" isn't as encompassing as "abbreviation". For something to be an acronym, it needs to be a 'word', however that's defined. With OEM, you pronounce each letter, O,E,M, rather than say oh-em. Abbreviation would be the more correct term in this case. I don't like it either, but here's dictionary.com's take:
ac·ro·nym: A word formed from the initial letters of a name, such as WAC for Women's Army Corps, or by combining initial letters or parts of a series of words, such as radar for radio detecting and ranging.
ab·bre·vi·a·tion
1. The act or product of shortening. 2. A shortened form of a word or phrase used chiefly in writing to represent the complete form,
such as Mass. for Massachusetts or USMC for United States Marine Corps.
Suggestion: Wikipedia's own acronym page suggestions "initialism" for an abbreviation pronounced as its individual letters.
[edit] Wrong way round?
Isn't the OEM the company that buys parts and puts it together? see: [1] I'm quite sure the in the automobile business the OEM is the car producer in contrast to the supplier.
It's not really the "wrong way around" since the term is used in several different, and contradicting ways. A problem with the article is that it does not cover all the ways. There seems to be an effort here to define the term, and claim that others are misusing it. But if others are using it a certain way, and it is widespread, then it's not "wrong" but a different use. It's probably best to advise readers that the term is ambiguous and it is best not to use it without giving an explanation with its use.
As an example, when IBM's field engineers used to come out to work on my mainframes in the 1980s, they used OEM to refer to components added to their computer that were manufactured by an independent company. That's consistent with what the wiki has. But they used the term for those components, even if they were added by the user, and not by IBM. For example, I had EMC memory in my mainframe, but IBM sold it only with IBM memory. That conflicts with the "usually" part of the definition, and is closer to what the term "aftermarket" is typically used for. Incidentally, "aftermarket" is defined at dictionary.com with the phrase "...as of a car or computer." Wikipedia defines it solely in terms of automobiles. - Hagrinas 21:11, 16 June 2006 (UTC)
Here is my bit from the Electronics Sector:
As evidenced by many articles (Hilmola et al. 2005, Webopedia 2006, Mucha 2005, Coker 2003, and many more), the Electronics Industry might use the term the other way around. A proposal for a simple top-level value chain there is:
EMS=>ODM=>OEM
(EMS: Electronic Manufacturing Services)
Examples for this classification are:
EMS: Flextronics, Celestica, Sanmina-SCI
ODM: Wistron, BenQ, Arima, Compal
OEM: Nokia, Sony, Dell, Apple
There is a lot of confusion about different abbreviations which is not reflected in the current wikipedia article.
references:
HILMOLA, O.P., HELO, P., HOLWEG, M., 2005. On the outsourcing dynamics in the electronics sector: the evolving role of the original design manufacturer. Working Paper Series, University of Cambridge. Pp. 1-31.
WEBOPEDIA, 2006. OEM Definition [online]. Available from: http://www.webopedia.com/TERM/O/OEM.html[Accessed 05th October 2006]
MUCHA, S., 2005. Building OEM-EMS Relationships, Circuit Assembly, 16(3), pp 16-17.
COKER, B., 2003. ODM or CDM?[online]. Available from: http://www.stma.org/files/SMTAI03-Coker.pdf [Acessed 27th June 2006]
I just edited the first paragraph for clarity. I was supposed to explain the term to my Japanese boss in Tokyo yesterday, and I couldn't make head nor tails of the wikipedia entry--which company is considered the OEM. The two uses of the pronoun 'their' left me really confused as to whether it was the seller of the part or the buyer of the part who was the OEM. My edit makes the meaning crystal clear, but I'm not sure if I got it the right way around. If you know the correct answer, please change it in a clear way. (I suggest avoiding pronouns) Folding Chair 03:22, 22 February 2007 (UTC)
I just reversed the meaning. I think this is the correct one, according to Webopedia. Folding Chair 04:33, 22 February 2007 (UTC)
[edit] "OEM" vs. "bulk"
Hi, I think this part of the article:
- OEM hardware can be purchased by end users at considerable savings of 30% or more. For example, OEM hard drives are purchased in a simple plastic bag without the additional cables or bulky box found in the more expensive retail package.
incurs in a common confusion: "OEM" is not the same as "bulk". An OEM product is a version of it customized for a particular vendor (for instance with a different firmware). A "bulk version" is identical to the "retail version" except for the packaging (thus "bulk", as an adjective, should not be referred to the product itself). I know that the two terms are very often used interchangeably, but strictly speaking they have different meanings. Gennaro Prota 12:10, 8 March 2006 (UTC)
Hi, I'm afraid I have to disagree. I believe that the hard drive in the example is an "aftermarket" addition, not "bulk", as it can be purchased in lower quantities than "bulk" would normally signify. I'm not sure whether it would be classed as "OEM" or not...
Sorry to interupt, but a quick clarification: OEM when reffered to in computers is a company, such as Dell, MDG, etc. that buy parts, assemble them, and sell the fully built computer for those incapable or unwilling to built their own. Also reffered a lot to is 'OEM Software'. This is software that comes pre-installed on Dell's, HP's, etc.'s computers THAT WERE NOT PURCHASED NORMALY. They have a specific license to put on an 'OEM Copy' of the software which usualy has limited support and is usualy NOT accepted with 'upgrade' discounts. These are generaly referenced by the company as a 'software bundle' which they give out since they get cheaper (sometimes limited [e.g. trials]) versions. OEM simply refers to it being to do with the company who assembled it as opposed to the company who manufactured the individual parts such as a Seagate hard drive, Sony DVD rewriter, and Corsair RAM.
[edit] OEM merged with ODM
Does the need of the enquirer help form the explanations design
A consumer or ebay scanner who wished to understand terms in sales might well be looking for a definition of OEM, trade, bulk, high street and refurbished: however, that person would be led to the definitions of OEM and ODM from a different point in wikipedia than an inquiry about production and manufacturing.
- ODM should not be merged with OEM - two different subjects. Read the articles. The tags should be removed soon. - Slo-mo 18:43, 6 June 2006 (UTC)
OEM / ODM are very different. As an example: Intel sells CPUs as 'boxed' ('direct' to customer in a branded box with warranty) or as 'OEM' (CPU-only, to system manufacturers). It doesn't do ODM CPUs at all: all of its CPUs are labelled 'Intel'. Huseyx2 15:20, 17 September 2006 (UTC)
Another example is the relationship between semiconductor companies - companies like AMD 'design' the electronic circuit board and ask companies like Chartered Semiconductors/FoxCon which are giants in quality semiconductor manufacturing to just churn out the particular design (OEM). In an ODM, a company subcontracts both the design and manufacturing to a company. One reason we do not see too many ODM's today is because of the real danger that the subcontracted company can start vertically integrating and competing with the contractor. For this reason, an ODM based relationship generally happens within companies owned by a common holding entity whose interest is better served by preventing such competition.
[edit] No need for merging
Although they are about branding, OEM and ODM represent 2 different concepts from business point of view
[edit] Move
An administrator should move this page to Original equipment manufacturer. 71.105.74.192 22:20, 27 June 2006 (UTC) No because its 93.7% wrong 001110010011100010011000001
[edit] OEM is not the same as Bulk
Say a First Party designs and manufacturers an item (this is the manufacturer). When this item is sold through retail channels, the warranty and customer service rights belongs to the end consumer. The end consumer could also purchase these items in bulk--a substantially large enough quantity determined by the manufacturer or distributer to merit a discount in per unit pricing. The bulk per unit price is lower to entice consumers to purchase greater quantities which help bring equilibrium to the supply and demand of the product's supply chain. This helps prevent companies from having to trim production and layoff workers, by stabilizing demand. Bulk packaging may very well be different from regular retail packaging. A visit to a warehouse club will bear many examples of products sold in significantly larger quantity and different packages than the same products sold in regular retail stores. However, the warranty and customer service rights for these products are the same for bulk items as for their retail counterparts.
Purchasing OEM products is significantly different from purchasing bulk products. In most (but not all) cases, when one purchases OEM items, the warranty and customer service rights from the manufacturer end with the original purchaser, not the end consumer. In the computer market, the system builder/assembler is called an OEM. The OEM generally receives a much steeper price break than an end consumer who buys retail. And in some cases the product may not even be sold through regular retail channels. Two factors help lower the per unit price. The first factor, which is less significant, is the quantity of items purchased (this is similar to a bulk discount). However, this factor often does not even come into play. The second factor, which is more significant, is that the OEM provides the end-consumer with a separate warranty and customer service program--the end consumer generally (though not always) receives no direct service, support, or warranty from the manufacturer. The manufacturer supports the OEM, and the OEM in-turn supports the end consumer.
Many consumers purchasing some OEM computer products (like at computer shows), do not realize that they are not entitled to a warranty from the manufacturer. An Intel Pentium processor is good example of such a product. The retail ones have a warranty, the OEM ones do not. Some computer parts manufacturers still provide the end-user with a warranty, such as Hitachi Global Storage Technologies with their hard drives. This tends to lend confusion to what is a bulk product and what is OEM product. In such examples the product package is usually lest robust than the retail counterpart, and often lacks any otherwise included extras.
[edit] OEM or Private Label?
The contrast between OEM and Private Label should also be established. Private Labeling is similar to--but more commonly used than--ODM. With OEM, the branding or name association with the product's actual maker is maintained, whereas the actual maker's name is concealed with private labeling , or ODM.
Yes - OEM's often integrate a product into their own but private labelling (e.g. Sam's Club) is just putting a different wrapper/packaging on someone else's product in my book ...
[edit] may want to include Contract Manufacturing as another way to contrast what an OEM does
[edit] Frequency of Reduced Functionality?
"The functionality of the software is often the same, but it is quite common for the OEM version to be a version with reduced functionality."
The words often and common are too vague to be used in conjunction like this. Can anyone clairify this sentince?
8ushy 02:10, 30 November 2006 (UTC)
[edit] Move
I took the liberty of moving this article from Original Equipment Manufacturer to original equipment manufacturer, which was a redirect. I never move articles in this fashion unless it is clear that the name is incorrect according to naming conventions. Lowercase is the default for article names, and there is no reason to capitalize "original equipment manufacturer", such as it being a trademark or a term used by a particular company (companies like to capitalize such terms). The only reason it ever appears capitalized is to illustrate where the "OEM" acronym comes from. In addition, "original equipment manufacturer" is not capitalized in the article. If you think the article should be moved back, please submit a requested move at Wikipedia:Requested moves. This is more efficient than contacting me since I do not edit every day. Since this page is not on my watchlist, I will be unaware of any responses here. If you would like a response, please leave a message on my talk page. -- Kjkolb 10:58, 11 April 2007 (UTC)
[edit] VAR
The section on VAR begins with the claim that "For those who use the term OEM to refer only to the original manufacturer of the product (Tandon in the above example), the term Value Added Reseller or VAR is used to describe the reseller." However, in the Tandon example IBM was cast as the reseller. IBM is never referred to as a VAR. My understanding of current usage is that IBM, HP, Cisco etc... are usually referred to as 'The Vendor' while VAR almost always refers to those distributors/consultants/systems integrators/channel partners who resell solutions and services to the end-user. SpaceyHopper 11:39, 20 May 2007 (UTC)
[edit] Palm
Would Palm count as an OEM? Mathiastck 00:29, 15 June 2007 (UTC)
[edit] Microsoft OEM licensed Software
FYI
Whatever about local laws over-riding the license agreement, My understanding is that as far as Microsoft is concerned all OEM licensed software must be supplied pre-installed on a full working PC. The only exception they mention is that historically there was a kind of loop-hole for Desktop OS's only if they were sold with a component that would be used in the PC the OEM OS was to be installed on. I think that stopped around Nov 2005. It seems to have persisted as an unbeatable myth. references! Microsoft Blog entry by Eric Ligman,Microsoft US Senior Manager,Small Business Community Engagement 2007 http://blogs.msdn.com/mssmallbiz/archive/2007/08/01/4177790.aspx Microsoft OEM System Builder License 2007 http://www.microsoft.com/oem/sblicense/default.mspx Microsoft Blog entry by Eric Ligman,Microsoft US Senior Manager,Small Business Community Engagement 2005 http://blogs.msdn.com/mssmallbiz/archive/2005/06/06/425681.aspx no I've nothing to do with MS, this is just stuff i picked up whilst trying to buy legit software..... 87.198.131.58 15:02, 7 September 2007 (UTC)
[edit] Editor is the witness
soon after in the early 1960s by Digital Equipment Corporation[citation needed] .... Editor was selling and repaired PDP-8--Namazu-tron (talk) 16:03, 23 November 2007 (UTC)
