Did you know that Tundra Restaurant Supply first started as a parts company back in 1993? Determined to empower restaurateurs to take DIY into their own hands and bypass costly service calls, Tundra quickly grew a diverse restaurant parts catalog that features over 22,000 different kinds of parts for in and out of the kitchen.
When searching for restaurant parts you might come across terms like “OEM,” “OCM” or “Aftermarket”—but what do they actually mean? Find out below:
OEM Parts
OEM parts stands for “Original Equipment Manufacturer” parts, and often refer to parts with specific branding. The best way to think about OEM parts is to think about brand-name versus generic products in the grocery store—in many cases, these products are identical but just feature different marketing.
OCM Parts
OCM parts, which stands for “Original Component Manufacturer” parts, are frequently made in the same factory as OEM parts and undergo the same rigorous testing standards. Though OEM parts are associated as being higher quality, in many instances the parts are completely identical.
Some manufacturers like to scare customers into buying OEM parts by telling them that using non-OEM parts will void their equipment warranty. This is true, but with a catch. For most restaurant equipment, the warranty only lasts a year, with maybe a 2 or 3-year warranty for specific parts. Typically parts fail on equipment well past the warranty date, which if that’s the case for you, there’s no problem in using an OCM part. That said, before purchasing any new parts always check with your manufacturer to see if your equipment (and the parts inside) are still covered under warranty.
Aftermarket Parts
When you see parts marked as “Aftermarket” it indicates that these parts (and accessories) are part of the secondary market, and are typically not made at the same factory as an OCM or OEM part. Aftermarket parts are a great way to acquire replacement parts at a fraction of the cost. For example, parts like replacement cutting boards for prep tables are a great way to save some money while still updating your existing equipment.
By VentureOutsource.com Staff
Designing and manufacturing electronics hardware products has evolved into two camps. One camp is the OEM. The other is comprised of contract electronics solutions providers, who often subcontract (and compete) with each other for the same OEM customer or program. Details below on differences between these different types of business firms and structures and why its important you should know the difference, especially if you are looking to reduce or manage your contract electronics sourcing spend.
OEM – original equipment manufacturer
The original equipment manufacturer (OEM) is the brand owner, the company whose logo displays on the final product. Think: Cisco, Dell, Samsung, Lenovo, LG, Microsoft, Apple …
For example. Apple’s iPhone has the Apple logo clearly visible to users. Apple is the OEM.
Apple designs its products, but Apple outsources the majority of iPhone manufacturing production to contract electronics solutions providers. Both EMS and ODM. Apple does this to leverage cost to scale.
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Its cheaper for OEMs to pay another company (solutions provider) to purchase and carry land and factory overhead costs, purchase and deploy expensive production and test equipment, and pay a solutions provider to hire, staff and train provider employees inside factories external to Apple’s organization, and pay the solutions provider to manage vendors and suppliers in the supply chain, than for Apple to take on all of this responsibility 100% internally. (READ: How to drive cost out of your manufacturing product portfolio)
Apple still employs a very large number of employees to manage its outsourcing partners and programs. But, as a result of outsourcing iPhone production, Apple carries little manufacturing infrastructure overhead on its books. For OEM vs ODM, keep reading.
Contract electronics solutions providers
The companies (providers of solutions) in this camp contract their electronics services solutions to OEM customers (and other solutions providers)* to bring OEM customer products to market.
Contract electronics solutions providers can be further subdivided into CM, CEM, ECM, EMS, ODM, JDM, and electronics design house.
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Some contract electronics solutions providers only offer electronics product design services. Others offer only product manufacturing services with designs the OEM providers and the provider then builds-to-spec.
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Other contract electronics solutions providers offer both product design and manufacturing services. Still, other contract electronics solutions providers are full service and offer additional front-end supply chain services such as procurement of materials and commodities.
Even design of these materials and commodities as well as back-end supply chain services (after products are built) such as shipping finished goods inventory (FGI) final products to OEM customers and to OEM end-user customers in the field plus, even offering repairing of products for OEMs that failed in the field. The latter is called reverse logistics, also a back-end service. (Important reading: Top 10 impacts to EMS/ODM quote pricing OEM programs)
Various types of contract electronics solutions across the supply chain, from front-end services, manufacturing, and back-end services can be seen below.
Columns to the left of Manufacturing Services are front-end services.
Columns to the right of Manufacturing Services are back-end services.
Front-end services, before actual manufacturing, and, back-end services (after manufacturing) will carry higher profit margins for the solutions provider compared to margins derived from manufacturing, only.
Some contract electronics solutions providers only offer their services to OEMs who have product in certain end markets, like medical and healthcare, industrial electronics, consumer wearables, automotive …
Contract electronics solutions providers: CM, CEM, ECM, EMS, ODM, JDM, design house definitions and classification.
CMs and electronics design houses
Electronics solutions providers are called, although less often, CMs, or contract manufacturers. They’re work in electronics is assumed but omitted.
Contract electronics solutions providers focusing on R&D services, like embedded systems design, are called design houses. Electronics design is highly profitable and a highly competitive service offering because paces at which new product introductions (NPI) come to market become faster as companies try to increase value to maintain relevance and competitiveness.
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In your search results you can further target other Industries and/or Services plus, you can add more geographies to your search.
Its common for any of the other types of contract electronics solutions business models (EMS, CEM, ECM, ODM, CM…) to include electronics design in their service offering, although doing so does require additional insurance, liability and certification requirements are met.
CM – contract manufacturer
Contract manufacturers (CM) will offer manufacturing services, and often some limited services related to manufacturing, to OEM customers. They’re called CM or contract manufacturer. These are both common terms in any manufacturing sector where production manufacturing is outsource and is used in the electronics industry, but also in other industries such as pharmaceuticals, construction, food and other consumer packaged goods, and so on.
CEM – contract electronics manufacturer
Unlike CM, contract electronics manufacturers (CEM) distinguish themselves from contract manufacturers that produce foods, paperback books, etc… due to the fact they serve the electronics industry.
CEM is always interchangeable with CM, but CM is not always interchangeable with CEM.
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