OEM – A Synonym of Success and Growth

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Xenius

• Humanizing Machines

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OEM A Synonym of Success and Growth!

• Original Equipment Manufacturer (OEM) is one of
  the important factors that has started gaining
  momentum in the manufacturing industries these
  days. It is a concept that was brought into
  practice to assist large organizations, to help
  them maintain their demand and supply curve.
  Before, we move ahead let us first briefly
  understand what OEM means and why is it so
  important.

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• Original Equipment Manufacturer (OEM) is referred
  to as the firm that is responsible for producing
  byproducts for the parent firm which in turn,
  assembles those components into one complete
  finished product and sells it in the market to
  the end consumers. The parent firm or the second
  firm that converts those byproducts into finished
  ones is referred to as Value-added Reseller
  (VAR), because, it augments those components into
  the end product and adds value to the base items.
  The value-added reseller works closely with the
  original equipment manufacturer to produce these
  end products.

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• To better understand the concept of OEM solutions
  let us look at an example. The age-old firm,
  which is very close to each one of us, Maruti
  Suzuki has been outsourcing the manufacturing of
  most of its automotive parts. This has become a
  common fact today but, was unknown a few years
  back. Maruti Suzuki gets the bumpers, exhaust,
  tailgate, banjo beam and many other parts
  manufactured by Jay Bharat Maruti (JBM). They
  have been in a collaboration with one another for
  forever now, so much so that the manufacturing of
  cars by Maruti Suzuki seems impossible without
  JBM pitching in.

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• Similarly, if we look at the computer industry,
  Hewlett Packard gets all the software from
  Microsoft and incorporates them into their PCs
  and laptops before selling the computer in the
  open market. When we talk about a computer, we
  find it impossible to even think of it without
  software or RAM. Had it not been for Microsoft
  and Intel, we wouldnt have probably been able to
  get such high-quality products. In the case of
  the computer industry, Intel and Microsoft act as
  the OEMs while HP, Dell, Lenovo, and other
  computer manufacturing brands act as VARs. When
  the concept of OEMs was introduced, it was
  thought that the OEMs would support the large
  industries and work in the backend. Who knew that
  these OEMs would in themselves become such big
  famous entities so much so that people these days
  take into consideration the OEMs as well, before
  purchasing any product.

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• The emergence of OEMs has undoubtedly brought in
  a lot of employment opportunities for people of
  all hierarchies. They have contributed largely
  towards the growth and development of the
  economy, both monetarily and in terms of
  infrastructure. Apart from employing more and
  more people, the OEMs have also given hope to the
  already existing firms. They have been
  instrumental in their growth and have hence
  facilitated the growth of the economy in turn.
  The OEMs have been very promising in terms of
  cost-efficiency, quality, and timeliness. They
  have helped the bigger companies in meeting their
  targets in the stipulated time along with greater
  profits. They have eased their management process
  and have taken the burden on themselves.

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• With the growth in the number of consumers and
  with the growing purchasing power of people, the
  OEMs have evolved, to support the VARs. There is
  no doubt in the fact that the OEMs are
  instrumental in helping the VARs acquire more
  profits. Also, with the coming of OEMs, the VARs
  can think of expansion and practice the same with
  ease. Since the OEMs already have the desired set
  up for manufacturing the base products, the VARs
  do not have to spend additionally. All they have
  to do is hire a suitable and reliable OEM and get
  their work done. Neither do they have to spend
  additionally on the additional workforce nor do
  they have to worry about the timeliness and
  quality of the byproducts, all of it can be taken
  care of, by, the OEMs themselves.

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• Also, since the OEMs only deal with manufacturing
  of a particular component or a range of
  components, they are the masters in their field
  and hence undoubtedly complete the work in a
  lesser time and in a cost-efficient manner. Not
  only this, the OEMs have lessened the burden of
  the VARs by manufacturing the spare parts or
  components of the base product, they have also
  helped the VARs in providing after-sales
  assistance to their customers. Since the OEMs
  deal with the manufacturing of the components,
  the VARs do not have to manufacture the
  components separately for consumers when they
  need replacements.

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• The day when the OEMs will become the backbone of
  the VARs is not far. The pace at which they have
  been growing and have created a dependency in
  such a less time span is commendable. It is
  because of the OEMs that the VARs have also been
  growing at a rapid pace and have been able to
  generate such huge profits. The reason behind the
  success of VARs is the time they save and the
  consistent quality they serve under the shadow of
  the OEMs.

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