OEM（Original Equipment Manufacturer）originally referred to the equipment and technology provided by the purchaser, the manpower and the site provided by the manufacturer, the purchaser responsible for the sales, and the manufacturer responsible for the production of a modern and popular production method. However, most of the time, the purchaser provides the brand and authorization, and the manufacturer produces the branded product.
OEM is a necessary path under the trend of socialized large-scale production and large-scale collaboration. It is also an effective way to rationalize resources and is the result of socialized large-scale production. In Europe, as early as the 1960s, an industry association with an OEM nature was established. In 1998, OEM production trade reached 350 billion euros, accounting for more than 14% of European industrial output value. OEM production has become an important component of modern industrial production section. With the further acceleration of the economic globalization trend, it is possible for OEM demanders to select OEM suppliers in a wider range, especially to countries and regions with low processing and manufacturing costs.
In Asia, Japanese companies first adopted the form of international OEM production and trade in order to quickly occupy the market and reduce production costs. The takeoff of "Asian Four Little Dragons" is also closely linked with OEMs. Among them, Taiwan has long been the largest OEM base for PCs worldwide, and India has become the world’s largest computer software exporter through OEM. In the IT industry, from functional modules from technology to components to software, who is all-powerful? When Compafield, President of Compaq, spoke on this issue, he said, “Making money in the most direct way!” and openly stated that it would save the burden of those so-called assets (plants, equipment, office buildings, etc.). Some people even claimed that: OEM created the entire IT industry! American Nike, with an annual sales income of up to 2 billion U.S. dollars, does not own a production plant and only focuses on research, design, and marketing. The products are all OEM-based and have become a successful example of OEM operations in the world.
Some potential limitation of OEM
OEM has its own limitations. Have less control of the production process might drastically increase the supply chain risk. The horse meet scandal in UK half decade ago was an example for this, where the reputation lost alongside UK supermarket chain was indeed a bullwhip effect caused by manufacturer.
Furthermore, the organizational strategy and culture, must be aligned. We can not expect a brand who focus on a high end consumer product to cooperate with a supplier whose whole idea is about minimizing operational cost. This mismatch will turn into a big problem in a long run.
So, What is there for you from 'SWEET PET'?
In Sweet Pet, we aim on building a brand with high quality and lowest supply chain risk for our customer. We love pets, and that is reason we are doing this business. We value our dearest friends as much as human beings, and we are creating products that make them fulfilled & healthy. Of course commerce plays a big role in any business module, we are aiming a commercial grow with a high-quality product under zero-mistake-tolerable attitude to make our friends happier.