Original equipment manufacturer
From Wikipedia, the free encyclopedia
An
Original equipment manufacturer, or
OEM, manufactures products or components that are purchased by a company and retailed under the purchasing company's
brand name.
[1][2][3][4][5] OEM refers to the company that originally manufactured the product.
When referring to automotive parts, OEM designates a replacement part made by the manufacturer of the original part.
[6]
Confusing and contradictory definitions
OEM may also refer to a company that purchases--for use in its own products--a component made by a second company.
[7][8][9] For instance, under this definition, if company 'A Inc' purchases optical drives from company 'B Ltd' to put in 'A Inc' computers, then 'company A' is the OEM.
An even more confusing, contradictory definition is a company that sells the product of a second company under its own
brand name.
[10][3]
Companies who follow the above practices may be better termed
value-added resellers (VARs) or
resellers, respectively.
Economy of scale
OEMs rely on their ability to drive down the cost of production through
economies of scale. Also, using an OEM allows the purchasing company to obtain the needed components or products without owning and operating a factory.
Automotive parts
An automobile part may carry the designation OEM if it is made by the same manufacturer and is the original part used when building and selling the product.
[6] The term
aftermarket is often used for non-OEM replacement parts.
[6]
Origin of term
OEM is defined by
IBM to refer to "a manufacturer of equipment that may be marketed by another manufacturer".
[1]
The term was used in the early 1960s by
Digital Equipment Corporation and its vendors to refer to
value-added resellers.
[9]
See also
References
