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What Is an Original Equipment Manufacturer (OEM)?

An original equipment manufacturer, or OEM, supplies the components that are used in original machinery. Often, these parts are not made by the finished product manufacturer. 

The automotive and computer industries, for example, outsource many of their components. Most OEMs also supply components as replacement parts. Most successful businesses keep critical spares to ensure business continuity whenever major breakdowns arise. 

Unexpected breakdowns and no spares might leave you wondering whether you should order from the original equipment manufacturer (OEM) or find a replacement part from a local source. Keep reading to learn more about the OEM industry and the benefits of buying OEM components.

How Does Original Equipment Manufacturer Work?

An OEM makes equipment and components that other companies use in their finished products. OEMs are most commonly used in the computer and car industries. 

These complex products require an array of components manufactured through very different processes. In the computer industry, big companies, like Dell and Hewlett Packard, buy components from other manufacturers, like Nvidia and Microsoft, to include in their products. 

They sell these under their own brands. In recent years, many big computer names have started to work with partners, even going so far as to advertise the presence of these components in their products. An example of this is Dell computers that carry and advertise Intel chips. 

Why Is OEM Important?

Manufacturers who partner with businesses in the OEM industry free themselves from the need to invest in the assets required to manufacture the components. They leave the component manufacturer to experts, preferring to focus on their areas of expertise. 

OEM manufacturers make it possible to gain economies of scale as they make components for more than one company. This ensures that finished products like computers and cars are more affordable.

Is it Okay To Buy OEM?

Many people prefer to buy OEM parts rather than the third-party manufactured parts available in the aftermarket. This is because OEM parts are designed specifically for the finished product. 

They are often of better quality. Plus, they tend to come with a manufacturer’s warranty. Aftermarket parts may be less expensive, but often they are not as durable as OEM components. 

What Is OEM Quality?

Many big organizations have learned from experience that OEM components are often much higher quality than third-party aftermarket components. As such, OEM parts are made from high-quality materials. These parts are designed for the machines in question, so they fit perfectly while also offering the best performance.

Example of OEM

In the automobile industry, the tire maker Michelin is a typical example of an OEM. The tires that carry the Michelin name are fitted onto cars like Audis, Fords and Toyotas, forming part of the end product. Garmin is also an OEM manufacturer for the automotive industry. In this example, the OEM is a household name, but this isn’t always the case.

For instance, Apple doesn’t make the screens for their iPhones. Rather, an OEM does. The producer of these screens doesn’t brand their product, and they don’t sell their product to customers either. They specialize in iPhone screen manufacturing and leave the advertising as well as the customer relations to the team at Apple. 

Benefits of an OEM

There are many advantages to buying OEM components.  

High Quality

When you buy OEM components, you know that you are buying the same parts that came with your machine. These components are made with similar specifications as those associated with the original machine parts. As such, they are compatible with the equipment and designed to work under similar operating conditions. 

Durable

All OEM components come with a warranty. The manufacturers are confident that the parts will stand the test of time. This is because they use tried and true materials to make the components, and they subject the finished parts to stringent quality tests. 

Longer Life Span

When you buy from an OEM, you can rest assured that the component is similar in every way to the part you’re replacing. The machine should perform the same as it did before, even after the replacement component is implemented. 

The parts should last longer as well because they are often made from more durable materials. OEMs also have stringent quality control processes in place to test the longevity of their components. Perfect part fitment bodes well for machine performance and durability. 

Support

When you buy from an OEM, like Teletrac, you will have access to the team of engineers that designed and produced the parts, which can reassure you in times where you need technical support the most. 

Original Equipment Manufacturer vs Aftermarket

OEM parts are made from the same materials and undergo the same quality tests as original machine components. They are identical to the parts that they will replace. 

Aftermarket components are produced by a third party. They are intended to be replicas of the original parts, but it is impossible to ascertain whether they are manufactured with similar materials or if they have been subjected to the same stringent quality standards. 

Businesses sometimes choose to buy aftermarket parts rather than OEM parts because aftermarket components are often considerably cheaper. They are sometimes also much easier to find. This may seem like a good idea, but these parts carry absolutely zero guarantees when it comes to the fit, function, or quality of the parts. 

Original Equipment Manufacturer vs Original Design Manufacturer 

An original design manufacturer (ODM) typically designs components for their products. They may subsequently modify the original part to meet a client’s specifications. The buyer will relabel these products with their brand name, selling them as their own. 

Since there aren’t any research or development costs for ODM components, they are often less expensive than OEM parts. ODMs will also sell the parts in smaller batches, meaning businesses with fewer requirements tend to opt for ODM parts instead.   

Is OEM Worth It?

OEM components are more expensive but they are also often of higher quality, meaning they tend to last longer. However, there are certain aftermarket products that have built their brand around durability and quality workmanship. 

If you’re looking for machine components that last, make sure you do your research. You might just find components where price and quality are well-balanced in no time.

Great Starts With You

Great Dane provides fleets with the tools they need to thrive in a connected ecosystem, designed to get on the road and stay on the road.

Great Starts With You

Great Dane provides fleets with the tools they need to thrive in a connected ecosystem, designed to get on the road and stay on the road.