Original Equipment of Manufacturer (OEM)

            OEM (pronounced as separate letters) is short for original equipment manufacturer, which is a misleading term used to describe a company that has a special relationship with computerand IT producers. OEMs are manufacturers who resell another company's product under their own name and branding.
            OEM is Similar to VARWhile an OEM is similar to a VAR (value-added reseller), it refers specifically to the act of a company branding a product to its own name and offering its own warranty, support and licensing of the product. The term is really a misnomer because OEMs are not the original manufacturers; they customize the original product.          An Example of OEMWhen a computer technology producer manufacturers its product, for example, a computer graphics card, they will usually make two or more versions of the product. One version is distributed by the manufacturer direct to the consumer retail market, using its own branding and offering its own warranty and support.  

        

          Other versions of the manufactured product will be distributed through the manufacturer's OEM and authorized reseller distribution channels. Usually OEM products are the same quality as the retail versions, but warranties may be different, the manual and bundled software may be non-existent, and the cables and connectors required for installation might not be included. In some cases it may be large quantities of the product purchased in bulk by the OEM for mass-production of pre-built systems.OEM stands for Original Equipment Manufacturer. The OEM is the original producer of a vehicle's components, so OEM car parts are identical to the parts used in producing a vehicle. Aftermarket parts are produced by other vendors and do not necessarily have a consistent level of quality or compatibility with the vehicle.Consumers replacing damaged vehicle components may choose to purchase OEM parts in order to ensure replacement parts are fully compatible with the vehicle and produced at the same quality standards. As the original suppliers of a vehicle's components, OEMs often have their products sold by branded car dealerships and available for order through the automaker directly. OEM products are endorsed by the automaker and are often significantly more expensive than aftermarket parts. OEM products and aftermarket products both have distinct benefits and disadvantages for the customer. In the future, new technologies such as 3D printing may transform OEM supply chains and improve competitiveness.

          For customers, many OEM and aftermarket products are nearly equivalent. Aftermarket components differ in quality but have many high-quality products available, often at a lower price than OEM parts. Competition with aftermarket manufacturers drives down prices and may eventually bring OEM prices in-line with aftermarket offerings. OEM products are usually only available for purchase directly through dealerships while aftermarket parts may be purchased online from a variety of vendors.OEM parts are usually guaranteed by the automaker to be compatible with the vehicle; installation of the parts may also be guaranteed in some cases. Aftermarket parts may or may not be compatible and many vendors do not certify compatibility. A broad range of companies produce aftermarket parts at many different price points, which allows for a wide range of choices but can also make for a confusing experience. OEM parts usually only offer one or two options for consumers, making the experience of replacing parts rather less complicated.Fierce competition in the automotive parts industry creates a strong need for OEM and aftermarket manufacturers to distinguish themselves in the parts market. Among aftermarket manufacturers, this competition results in a wide range of prices and unique features of parts. The quality of some aftermarket parts equals or exceeds OEM products, while other parts companies compete by offering lower-priced products of inferior quality.OEM companies, competing with aftermarket businesses, increasingly innovate supply chains and product lines to deliver a superior product at competitive pricing. Both OEM and aftermarket companies are actively using technologies such as 3D printing to efficiently create on-demand parts and make their supply chains more flexible. Rapid changes in product demand may be costly for traditional production to respond to and may require companies to maintain higher inventory levels. On-demand production is providing auto parts manufacturers with additional production options.