OEM vs ODM Manufacturing: Which is Right For Your Business?

Industrial design is the key to product development. It serves as the bridge between form and function. It’s the process that transforms product ideas into tangible, marketable products. The aesthetics, usability, and manufacturing feasibility depend largely on industrial design.

What could be the most pressing challenge for a product company with an excellent idea? Could it be product engineering, design, prototype development, finances, or developing in-house capabilities? While the answer may vary, the solution to each of these can lie in outsourcing work to competent Original Equipment Manufacturers (OEM) and Original Design Manufacturers (ODM), who help companies generate more value from often-overlooked opportunities.

If you are a budding product company or an established one, looking to get amplified ROI but don’t know how, this article will help you get the exact answers. As leading original design manufacturers in India, we help you get clear insights so that you can make informed decisions for the growth of your business.

But first, let’s understand where exactly each of these comes into the picture in a product development lifecycle.

What Are Product Companies?

Product companies who enter the market often come up with groundbreaking business ideas that solve a particular pain point of customers, or pioneer innovative products based on market requirements. The product development cycle typically involves research & development (R&D), market research, product design, product development, production planning, manufacturing, QA, and distribution. Here are the primary types of product companies classified according to their capabilities.

1. Product Company With End-to-End Capabilities

These companies have the in-house resources to handle every aspect of the product cycle, from initial concept and design to manufacturing and distribution. They are self-sufficient and don’t need to outsource any aspect of the product development to others. Companies like Apple, Tesla, and Samsung fall under this group as they have the internal capability to manage almost 80% of their major manufacturing needs.

2. Product Company With Only Design Capabilities

Product Companies with only design capabilities set the stage through R&D, market research, and product design, but depend on professional third parties like Cubein for production.

3. Budding Product Companies Short on Resources and Capital

Budding product companies, short of internal resources with excellent business ideas and who want to utilize finances effectively, are the ones who outsource both design and manufacturing to contract manufacturers like CubeIn.

OEM vs ODM Manufacturing : Which is Right For Your Business?

The OEM vs ODM debate ends at capabilities related to resources, finances, and the speed at which companies want their product ready for the competitive market. Here’s a detailed look at what makes OEMs different from ODM, their use cases, and what some of the best original equipment manufacturers and original design manufacturers in India bring to the table.

OEM

OEMs use the design and product specifications provided by the product companies and manufacture large volumes of components or entire products with quality assurance. Companies with clear designs and specifications framework can team up with OEMs to produce products or components according to their requirement. Outsourcing work to professional OEMs is best suited if you need help with the manufacturing, production planning, and quality assurance part.

1. What Do OEMs Bring to The Table?

OEMs bring with them expertise in manufacturing and the capability to scale production based on demand. Additionally, by utilizing economies of scale, OEMs help reduce production costs, particularly for companies that lack suitable in-house manufacturing facilities, thus helping them focus on innovation, marketing, and distribution, reducing the time to market.

2. Who Is OEM Best Suited For?

Outsourcing manufacturing to OEMs is best suited for companies in the automotive, and aerospace sectors, that have strong design capabilities but fall short on manufacturing resources. This includes startups and small Businesses that want to focus on product design, branding, and distribution. Additionally, companies looking to expand their base and in need of quick large-scale production needs can benefit by partnering with seasoned contract manufacturers like Cubein, who have the expertise, capabilities, and resources to enable large-volume production using 3D printing, injection molding, and related technology.

ODM Manufacturing

ODM manufacturing is preferred by companies that have done their market research but lack the acumen to design and develop products. Quite often ODMs design products based on their ideas or collaborate with clients. The best part? ODMs handle the entire development process, and the products are sold by the product company under their brand name. By partnering with ODMs, companies can eliminate the need to invest in expensive design and manufacturing facilities.

1. What Do ODMs Bring to the Table?

The keyword differentiator in the OEM vs ODM manufacturing battle is end-to-end product development. ODMs, with their valuable insights into market trends, customer preferences, and product innovations, are capable of handling everything from initial product design to final production, thus offering a turnkey solution for companies. Cubein as a leading Original Design Manufacturer In India, helps companies realize faster time-to-market through resource-rich environments, pre-existing designs, and established manufacturing processes. Another key area of expertise that makes ODMs stand out is the capability to customize product designs to meet specific brand requirements.

2. Who is ODM Best Suited For?

Companies looking to bring unique products to the market with design and customization distinct from white-label products can opt to partner with ODMs to help them bring their vision to reality. Brands without in-house R&D, startups, and small businesses who lack the resources but want to bring products to market quickly can achieve the biggest gains by collaborating with professional ODMs like Cubein. Working with ODMs is best suited for companies looking for ready-made, customizable designs and cost-effective solutions and for new entrants who require fast market entry. It can also come in handy for retailers and businesses looking to sell white-label products under their brand name without investing in product development.

How Can Cubein Support Your Manufacturing?

Cubein provides both OEM and ODM manufacturing services to help startups, new entrants, and established companies alike, in cutting down risks and costs. When you outsource your 3D printing and injection molding projects to Cubein, you are adding our expertise, experience, and technical capabilities to your repertoire.

OEM vs ODM Comparison (3D and Injection Molding)

Wrapping Up

An article published by Infosys states that businesses outsource 70% – 80% of their manufacturing. So, why is it that some of the top companies are outsourcing the most crucial aspect of their businesses to ODMs and OEMs? The answer may lie in the newer technologies/methodologies, processes, skillsets, and capabilities that they have.

Companies can opt for either of the two based on the situation at hand, the needs of the current business, and understanding what’s at stake. Established businesses whose existing systems are in place but are overwhelmed can choose to connect with OEMs to ease off the load.

As the leading OEM and ODM manufacturers in India, with 14+ years of experience, we at Cubein know the manufacturing space well and have the required technical acumen, experience, and expertise to complete complex projects on time with ease.

Still confused about what best suits your business? Visit our website to know more about us and what we do, or schedule a call with our team right now.