The right partnership between an Original Equipment Manufacturer (OEM) and Original Design Manufacturer (ODM) is seminal to delivering the growth strategy for a mid-tier OEM in the tech space – especially now, as market conditions and competition become more challenging.
Many Mid-Tier OEM’s have grown through acquisition. Mergers and acquisitions can deliver cost savings, revenue growth, new expertise and new technology/IP. But showing that the consolidated entity value is greater than the sum of the individual parts is challenging both operationally and culturally. This is especially true for mid-tier tech OEM’s tasked with combining resources and capabilities, eliminating inefficiency, and integrating different cultures, processes and systems – while continuing to deliver meaningfully unique products and services to their customers.
An ODM partner can bridge these gaps and provide ongoing support, efficiencies, and growth opportunities. It’s important to regularly evaluate your current relationship to see whether your needs are being met. If they are—great! If not, there may be another partner that can better serve and scale your business.
Here are the top 10 questions to ask when evaluating an ODM partner.
1. Do you know the BOM (Build of Materials) costs?
In an ideal partnership, an ODM should openly share component and labor costs and specification details.
2. Do you own the reference design and IP for your products?
It’s important that the ODM conveys ownable product differentiation documentation and support.
3. Do you benefit from the ODM’s expertise, and does it create synergy with your team?
The right ODM should complement your internal resources and capabilities.
4. Do you look at design at all levels? (Component, sub-system, system, holistic? Quantity of parts being made, the materials being used, the complexity of surfaces, the tolerances required, etc.)
Your ODM should deliver Design for Manufacture (DFM) to make a better product at lower cost. They should be designing for manufacturability and scale.
5. Do you benefit from working with a certified, experienced testing partner?
The right ODM will understand your project requirements and provide testing to ensure products comply with safety and quality standards.
6. Do you get thought leadership and leading-edge development relevant to your industry?
It is possible to find a best-in-class ODM partner that works with market leaders in your sector, helping you drive innovation.
7. Do you receive the value of purchasing power?
An ODM should have buying clout in the market regarding economies of scale, helping you manage costs.
8. Do you need to use up inventory from former, locked-in agreements with part providers?
An ODM can find alternative markets for disposing of components that may no longer meet cost or application requirements from previous sourcing agreements.
9. Do you get insight into early-stage innovation to inform your product roadmap? And do you have an opportunity to influence what’s next?
Forward-thinking ODMs work with market makers (e.g., chip set manufacturers) which develop next generation hardware, technology, features, and functions.
10. Do you have one partner who can deliver all your design, R&D, cost, supply chain, testing, and differentiation needs under one roof?
The ideal ODM partner should deliver items 1-9 above, delivering value under one umbrella and prevent you from juggling multiple vendors.
If you answered “No” to some or all of these questions, it’s likely time to reevaluate your ODM relationship and seek a new partner that can help to achieve your goals.
One+One works with an ODM partner that checks all the boxes. Contact us to learn how we can help your mid-tier OEM company achieve revenue and cost synergies – and be poised for ongoing growth.
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