Original equipment manufacturer
From Wikipedia, the free encyclopedia
An original equipment manufacturer, or OEM, manufactures products or components which are purchased by a second company and retailed under the second company's brand name.[1][2][3][4] It is a form of outsourcing.
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[edit] Contradictory Definition
Confusingly, OEM may also refer to a company that purchases a component made by a second company for use in its own product,[5][6] or sells the product of the second company under its own brand name.[7][2] Companies who follow these practices are better termed value added resellers or resellers, respectively.
[edit] Economy of Scale
The practice of utilizing OEMs relies on the original equipment manufacturer's ability to drive down the cost of production through economies of scale. It also allows the purchasing company to obtain the needed components or products without owning and operating a factory.
[edit] Origin of Term
The term OEM was used in the early 1960s by Digital Equipment Corporation and its vendors to refer to value added resellers.[6]
[edit] See also
Contract manufacturer
OEM Off-Highway Magazine
[edit] References
- ^ What is OEM? wisegeek.com
- ^ a b OEM searchitchannel.com's Definitions
- ^ Tracy Kidder ((C)1997). "The Soul of a New Machine - CHAPTER ONE- How to Make a Lot of Money- 16th paragrapgh, "companies known as original equipment manufacturers, or OEMs"". Random House Inc. ISBN 0-679-60261-5. Archived from the original on 2008-08-08. http://www.businessweek.com/chapter/kidder.htm#contents. Retrieved on 2008-08-08.
- ^ Moving On The Economist, Jan 13th 2005
- ^ OEM Definition helpwithpcs.com
- ^ a b Ken Olsen economicadventure.com
- ^ OEM webopedia.com
