What is difference between OEM, CM, CEM, ECM, EMS, ODM, JDM, design house contract electronic terms?

By Staff

Designing and manufacturing electronics hardware products has evolved into two camps. One camp is the OEM. The other is comprised of contract electronics solutions providers, who often subcontract with each other for the same OEM customer or program. Details below on differences between these firms plus, why its important you should know.

OEM – original equipment manufacturer

The original equipment manufacturer (OEM) is the brand owner, the company whose logo displays on the final product. Think: Cisco, Dell, Samsung, Lenovo, LG, Microsoft, Apple …

For example. Apple’s iPhone has the Apple logo clearly visible to users. Apple is the OEM.

Apple designs its products, but Apple outsources the majority of iPhone manufacturing production to contract electronics solutions providers. Both EMS and ODM. Apple does this to leverage cost to scale.

Its cheaper for OEMs to pay another company (solutions provider) to purchase and carry land and factory overhead costs, purchase and deploy expensive production and test equipment, and pay a solutions provider to hire, staff and train provider employees inside factories external to Apple’s organization, and pay the solutions provider to manage vendors and suppliers in the supply chain, than for Apple to take on all of this responsibility 100% internally.

Apple still employs a very large number of employees to manage its outsourcing partners and programs. But, as a result of outsourcing iPhone production, Apple carries little manufacturing infrastructure overhead on its books. For OEM vs ODM, keep reading.

Contract electronics solutions providers

The companies (providers of solutions) in this camp contract their electronics services solutions to OEM customers (and other solutions providers)* to bring OEM customer products to market.

Contract electronics solutions providers can be further subdivided into CM, CEM, ECM, EMS, ODM, JDM, and electronics design house.

Contract Agreement for EMS Electronics Manufacturing Services (10 pages)
Contract Agreement for EMS Electronics Design Services (7 pages)
Contract Agreement for EMS Medical Device Design Services (7 pages)
Contract Agreement for EMS Medical Device Manufacturing Services (14 pages)

Some contract electronics solutions providers only offer electronics product design services. Others offer only product manufacturing services with designs the OEM providers and the provider then builds-to-spec.

Find EMS manufacturing providers

In your search results, you can further target providers by End Markets and/or Services.

Other contract electronics solutions providers offer both product design and manufacturing services.

Still, other contract electronics solutions providers are full service and offer additional front-end supply chain services such as procurement of materials and commodities. Even design of these materials and commodities as well as back-end supply chain services (after products are built) such as shipping finished goods inventory (FGI) final products to OEM customers and to OEM end-user customers in the field plus, even offering repairing of products for OEMs that failed in the field. The latter is called reverse logistics, also a back-end service.

Various types of contract electronics solutions across the supply chain, from front-end services, manufacturing, and back-end services can be seen below.

Columns to the left of Manufacturing Services are front-end services.

Columns to the right of Manufacturing Services are back-end services.

Front-end services, before actual manufacturing, and, back-end services (after manufacturing) will carry higher profit margins for the solutions provider compared to margins derived from manufacturing, only.

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Cost Model Templates for SMT, PCB Assembly, Test, Electro-Mechanical EMS/ODM Services

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