The manufacturing industry is composed of a complex web of companies that provide a range of manufacturing services for established companies, but also for startups. Often, acronyms such as EMS vs. OEM are dropped by industry insiders as an afterthought to describe their services. Though for many it may well be just that, for many others who may be in the initial phase of research and development, knowing which is which or what, can be a source of confusion.
In manufacturing-speak, the acronyms do have significance. Knowing which manufacturer to turn to will depend on their specialty and your product. These specialty manufacturers are there to produce, manufacture, contract or provide the specific component or service that will deliver an end-user solution. EMS, OEM, CEM, ECM, CM, and ODM are acronyms which reference companies that manufacture components used by another or other companies in assembling a whole system. In other instances, one company can rebrand another manufacturer’s products to sell as their own.
The acronyms represent the different services that specific manufacturers offer within a broader manufacturing environment. An EMS provides electronics manufacturing services; an OEM is an original equipment manufacturer. CEMs are contract electronics manufacturers and ECM is an electronic contract manufacturer. A CM is a contract manufacturer and an ODM is an original design manufacturer. That said, even knowing one acronym from the other can lead to confusion. To help in your decision making, let’s take a closer look:
What is an EMS?
An EMS is essentially a contract manufacturer in the electronics field. Similar to an ECM, an EMS can design, manufacture, test, ship, or repair electronic components and assemblies for OEMs. They may also be involved in product development, software design assistance, or other value-added services like supply chain management, configure-to-order, and outbound logistics. Some EMS companies are huge multinationals that manufacture parts and components for the likes of Microsoft, Apple, HP, Sony, and Cisco.
What is an OEM?
OEMs have several roles in manufacturing. The original equipment manufacturers may market complete products or produce certain sub-components or assemblies for other companies to use in their end product. They may strictly focus on research, development, and innovation of their own products and retain the intellectual property (IP) rights. OEMs also contract to produce an array of products away from commercial and consumer electronics, such as medical devices and auto parts. Ironically, it is not uncommon for OEMs to subcontract with CEMs or CMs to provide parts for their own products.
What is a CEM?
CEMs are companies that contract to make electronic products for other companies. These contract electronic manufacturers typically provide whole or partial manufacturing responsibility for other OEMs that serve sectors such as communication, transportation, medicine, defense, oil and gas, and computer industries.
What is an ECM?
Like a CEM, an ECM is a contract company that makes electronic parts for other companies. They may manufacture single components or whole assemblies and for a range of industries, or sell the manufactured parts to an OEM for market or sell to specific customers. In reality, electronics contract manufacturer (ECM) is just another acronym for CEM.
What is a CM?
As a form of outsourcing, contract manufacturing essentially is when your company hires another - the CM - as your company’s factory. The manufacturing of your product is based on the processes, labor, and materials required to produce your company’s design. CMs are widely used and are common to the automotive, aerospace, defense, medical, and food and beverage industries.
What is an ODM?
ODMs, though similar to CEMs or ECMs, typically develop and own the IP for products used in CEMs. In other words, contract electronics manufacturers use customer designs and IP to manufacture a wide array of products, while ODMs develop their own specialized IP for specific markets.