OEM is an abbreviation that is widely used in the manufacturing and production industry. But what does OEM really stand for and what does it mean?
Let’s decode the full form and significance of OEM across various sectors.
OEM Full Form
OEM stands for Original Equipment Manufacturer.
It refers to a company that manufactures products or components which are purchased by another company and sold under the purchasing company’s brand name.
OEM Meaning in Automobile Sector
In the automobile industry, OEM refers to the original manufacturer of auto parts and vehicles.
For example, Bosch is an OEM that manufactures windshield wiper systems for cars. But these parts are sold to automakers like Mercedes and BMW to be used in their cars.
OEM in Consumer Electronics
In the electronics sector, Canon may produce printers to be sold by HP under the HP brand name. Here, Canon is the OEM, making these printers specifically for HP.
OEM in Software Industry
Microsoft develops Windows OS as an OEM to be used in computers built by Dell, Lenovo and other companies. These brands sell the computers with Windows OS pre-installed, although Microsoft is the original creator of the software.
Advantages of OEM Arrangements
- OEMs can focus on manufacturing and innovation.
- Brands can use OEM products to enhance quality without investing in manufacturing.
- OEM relationships help bring products faster and more cost-effectively to market.
In summary, OEM refers to the original manufacturer of a product even if it is rebranded and brought to market by a separate company.
OEM arrangements help leverage specialization and expertise for mutual benefit.