Describe the benefits of ODM

A lot of companies around the globe have outsourced their productions to other companies in order to reduce cost, increase productivity, leverage a global knowledge, gain access to offshore resources, delegate responsibilities, just to mention a few. As the productions extend internationally, the product design also expands globally. Previously, companies generally chose local designers to conduct their product design. However, most of the product designs now are done by international team as organizations started to realize the benefits of global product design, which uses the combined efforts of a team of designers who work in different countries and even on different continents (Stevenson & Chuong, 2014). One of the renowned global product designs is ODM, which is an acronym for Original Design Manufacturer. In this essay, I would like to explain what is an ODM and its benefits.

An ODM is a company which designs and manufactures a product, which is specified and eventually branded by another firm for sale (Rockleigh Industries Incorporation). A lot of well-known brand firms such as Sony, Apple, and Dell are no longer produce and design all of their products themselves; instead, they outsourced some of their productions and designs to ODM companies. ODM companies would produce and design the products according to their customers’ needs and specifications, but under their customers’ brand name. There are numerous benefits pertaining to ODM. First, a firm that outsources its product design to an ODM company can produce and design its product(s) without having its own facility. The cost saving from building facility is one of the main reasons a company outsources its product design to an ODM. Second, ODM can lower the cost of production. In this way, companies in developing nations such as China, Cambodia, and Vietnam can produce and design products at a much lower cost than companies in developed countries due to lower labor cost, abundant of natural resources for productions, and proximity to local markets.  Third, some ODM companies can offer higher quality products than an organization can obtain itself due to their expertise, superior equipment, and/or technology. Fourth, capacity constraint has motivated a company to outsource its product design to an ODM. An organization may not have enough time, human resource, equipment, and/or necessary skills to produce and design the product by itself. Fifth, an ODM can understand local customers better and design the products to meet domestic market needs. In this regards, ODMs will adjust their standard designs to accommodate the needs of their customers (Pick, 2009).

To sum up, a lot of brand firms now delegate their product designs to ODM businesses as a result of global product design. ODM has brought many benefits to both consumers and producers. Among those benefits are: cost saving from building plant and production, superior product quality, capacity availability, and the ability to understand customers better and design the products accordingly. Due to its abundant benefits, ODM now has become very popular among production companies.

 Bibliography

Pick, A. (2009, 03 23). Original Design Manufacturer (ODM) Definition, Analysis, Competitors, Research. Retrieved 12 23, 2014, from IHS Technology Website: https://technology.ihs.com/389281

Rockleigh Industries Incorporation. (n.d.). Rockleigh Industries. Retrieved 12 23, 2014, from Rockleigh Industries Web Site: http://rockleighindustries.com/oem-odm-manufacturing.html

 Stevenson, W. J., & Chuong, S. C. (2014). Operations Management. Singaport: Mc Graw Hill Education.