In China, it is often referred to as “OEM production”, “OEM processing”, “commissioned production”, “commissioned processing”, “branded manufacturing” and “production outsourcing” from different angles. Although the title is different, its essence refers to companies with dominant brands in order to reduce costs, shorten the distance, seize the market, and entrust other companies to process production. And to provide these manufacturers with product design parameters and technical equipment support to meet the requirements of product quality, specifications and models.The production and operation model is that products are posted on the trademark of the client to sell
OEM is a phenomenon that occurs with the refinement of social division of labor. It represents the idea of division of labor and refinement of competition. Its biggest feature is the separation of brand and production, which makes producers more focused on production. Brand owners are freed from the tedious production issues. Focus on technology, service and brand promotion. It can be seen that the operating mechanism of the OEM production mode is to realize the production mode of supply chain management based on the concept of mass customization under the special principal-agent framework.
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