Joint Development Manufacturing – What is an OEM, ODM, and JDM?
Introducing Joint Development Manufacturing:
Technology companies such as LuphiTouch have an abundance of options available to them for manufacturing, such as Joint Development Manufacturing, thanks to the fast-paced innovations in the manufacturing industries. To make the right decisions in an ever-evolving industry, it is important to stay abreast of the important information that can help one in this endeavor.
Add to it the complex relationships the have emerged between different actors in the industry such as manufacturers, integrators, resellers, and suppliers and you have an intricate decision-making process that is almost impossible to understand without having the right kind of knowledge. One, however, has to start somewhere, and doing it requires the understanding of the basics first.
Finding a good balance in the manufacturing process is what Joint Development Manufacturing epitomizes. It is a collaborative process in which both the outsourcing company and the manufacturer work together to ensure quality manufacturing.
However, how does this model work and how is the collaboration made possible, to begin with? Both parties agree that the outsourcer would do its part in designing etc. The other partner would do the rest, such as the final assembly.
For instance, a company having a design it wants to build might not have the manufacturing capacity to realize its idea. What should it do? In such a scenario, it reaches out to another party and asks them to join hands. Hence, the outsourcer enjoys significant control over the manufacturing process while also giving its partner the necessary freedom and control. As a result, a positive collaboration forms working wonderfully for both parties as both get what they want from the deal.
Joint Development Manufacturing & its Alternatives:
Both OEM and ODM leave many glaring gaps. This is where Joint Manufacturing Development kicks in and fills the vacuum generated by the other two. Let us first discuss the other two to understand the situation better. An OEM is a company that manufactures a product under a contract. A company shares only the important details with the hired manufacturer, which serves as a guide for the manufacturing process.
On the other hand, an ODM is an arrangement in which a company also hands some of the designing responsibilities to a manufacturer. This model gives more freedom to an ODM because some of the design processes come under their control, giving them more freedom. Nevertheless, the final product still bears the name of the company that outsources the work to an ODM.
Filling the Gaps:
Now let us see their shortcomings of the other two models. OEM arrangement does not incentivize a manufacturer to have a strong design department because the model by its nature focuses almost entirely on manufacturing.
Therefore, the other partner invests in modernizing its manufacturing. On the other hand, the ODM partner has its deficiencies. By focusing a lot more on the design aspect, there is a risk of time wastage by the manufacturer. For instance, if there is an uncertain but a complicated project, an ODM might spend a lot of time on its design.
The hard work might not pay well in the end. In addition, ODM is a more demanding arrangement, which could take a toll on the manufacturer. When orders pile up and designing gets complicated, it gets harder to meet the deadlines.
Joint Development Manufacturing (JDM) effectively fills these shortcomings. However, how does it happen? For instance, a product is in its design stages. It is not just the responsibility of one party to do this. Both parties collaborate and exchange ideas in a joint venture, which makes the process more transparent and unique.
This is also not just about exchanging ideas. It also holds for exchanging technologies. When such collaboration happens, the exchange of technology happens as well. If there is a weakness in someone’s technological capabilities, filling it becomes easier this way.
Let us summarize the topic and see how they compare to each other. This will lead to a more in-depth understanding and better decision-making. As we have already observed, OEM and ODM both suffer from some flaws. Joint Development Manufacturing (JDM) gets rid of them effectively. LuphiTouch offers unparalleled services for JDM, OEM, and ODM at unbeatable prices.
The OEM is a model, which gives maximum control to the outsourcer. However, this control is a double-edged sword also meaning higher costs. In addition, you would possibly be sharing some confidential information with the manufacturer.
On the other hand, ODM relieves the manufacturer from many responsibilities from designing to R&D. Since it is a less burdensome arrangement, the outsourcing company can focus on more important things. The control over licenses and IPs might not be as strong, however. To counter the shortcomings of this model, effective communications are the key.
Last but not the least; Joint Development Manufacturing (JDM) is all about balancing things up between two partners. If you are relieved of some responsibilities, you have to put those resources somewhere else to keep things balanced.
This is also important to ensure the partnership keeps running smoothly and effectively. These characteristics make the most effective and useful model available today. The modern economy runs on collaboration on an international level. This reality makes JDM a wonderful model to work with.
In the end, one has to make a choice, which might not be an easy process, as it requires a lot of deliberation and thought. A good way to start is to evaluate your position in the market and understand your requirements.
One cannot outsource work without understanding what to demand from the manufacturer. How does one decide, then, about which option to go for? That depends on some crucial factors such as one’s position in the industry but most importantly the vision one has for a particular business.