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Original Design Manufacturer: What Is It? Advantages and Disadvantages Explained

Have you ever wondered who is responsible for the designs and manufacturing of the products we use every day?

Original design manufacturers (ODMs) are the minds behind it, from laptops to smartphones. ODMs are known for turning an idea into a tangible reality and delivering cutting-edge technology to the market.

In this blog, we’ll take a closer look at the world of ODMs, and uncover the magic behind their creations. We’ll explore the know-how, advantages and disadvantages of original design manufacturers. Let’s dive in!

What Does an Original Design Manufacturer Stand for?

Original design manufacturers (ODM) are companies that design and manufacture a product. This product is specified by their clients who want to implement a particular product idea and bring it to life.

ODM companies are responsible for the research and development of a product, as well as its design, engineering, and production. They typically have the expertise and facilities to bring a product from idea to market.

According to a report by ResearchAndMarkets, the global ODM market size was estimated at USD 104.87 billion in 2020. It is expected to reach USD 126.01 billion by 2023, growing at a CAGR of 3.9% during the forecast period.

Advantages of Original Design Manufacturing


There are several advantages of partnering with original design manufacturers (ODMs), especially in product design and manufacturing. They are listed below:

1. Cost-effective

Developing products through ODMs is cost-effective as compared to in-house development. According to a study by PwC, companies that use ODMs can reduce their manufacturing costs by up to 40% compared to in-house production.

Through ODMs, companies can save significant funds that they would otherwise spend on research and development, product design, and manufacturing.

2. Expertise And Experience

One of the most significant advantages of partnering with an Original Design Manufacturer (ODM) is the exclusive access to their expertise and experience. These qualities often play a vital role in guiding the design and manufacturing of an exemplary product.

Also, ODMs have a keen eye for detail and know how to identify and mitigate potential risks, ensuring that the production process runs smoothly.

3. Faster Time to Market

Partnering with an Original Design Manufacturer speeds up time to market by leveraging their resources and expertise. Besides a strong workforce, ODMs have established supply chains and relationships with suppliers, allowing for a consistent source of materials and components.

As a result, they can quickly adapt to market changes and provide support throughout product development. This streamlines the process and allows for faster market introduction.

4. Flexibility

ODMs offer flexibility throughout the production processes and can adjust and adapt to the unique requirements of their clients. Their proficiency allows them to provide customised solutions to meet specific production goals and changing circumstances.

This level of flexibility is precious for companies that operate in rapidly evolving industries or require a high level of customisation for their products.

5. Reduced Risk

Partnering with an Original Design Manufacturer reduces production risk through:

  • Specialised knowledge
  • Established supplier relationships
  • Creating contingency plans

ODMs are known to provide valuable insights and expertise to minimise risk and ensure a smooth production process. Companies can rely on them to minimise unexpected production disruptions, enabling them to operate confidently.

6. Reoriented Focus

Through an Original Design Manufacturer, companies can focus on their core competencies by outsourcing their product development processes.

Subsequently, it frees up valuable time and resources, allowing them to concentrate on the areas of their expertise via research and development to consolidate their growth prospects.

Disadvantages Of Employing Original Design Manufacturers

While there are many advantages to partnering with ODMs, there are also some disadvantages that companies should consider.

1. Reduced Control

With an Original Design Manufacturer, companies may surrender a degree of control over the design and manufacturing process, which can lead to quality issues and deviations from the planned product vision.

2. Quality Control Issues

Original design manufacturers may not always adhere to the same quality standards as their clients. It can result in product defects and quality control issues.

3. Intellectual Property Concerns

There may be a risk of intellectual property (IP) infringement when partnering with an original design manufacturer, as the manufacturer may use the same design for other clients without proper permission.

4. Communication Challenges

If the original design manufacturer is located in a different country, disparate timezones and cultural and language barriers can impact the effectiveness of the working relationship.

5. Dependence On The ODM

Companies relying on ODM may become heavily dependent on the manufacturer for their product, limiting their ability to switch to another supplier in the future.

6. Cost Overruns

While ODM may seem like a cost-effective solution, some hidden costs may be associated with outsourcing the design and manufacturing process, such as shipping and import fees, taxes, and additional production costs.

Companies may also experience cost overruns if the ODM charges more than expected for the product development process.

Future Prospects of Original Design Manufacturers

Popular statistics indicate that the global demand for ODM services will increase across industries.

For example, a report by IDC states that the global laptop market is expected to grow in the coming years due to the growing demand for remote work and education. This directly translates to growing demands for ODM services for laptops.

Another report by MarketsandMarkets suggests that the global wearable devices market is expected to grow at a CAGR of 17.3% from 2020 to 2025.

Final Thoughts

In a nutshell, original design manufacturers are transforming the electronics sector by offering speedy and efficient production solutions. These allow firms to swiftly launch new products without having to start from scratch and pour in immense resources.

If you’re looking to bring a new product to market or streamline your existing manufacturing processes, we are here to help.

Shipping 500k+ products per month, Oakter offers a one-stop solution, taking care of everything from design to manufacturing.

With a focus on customisation, we make product development stress-free. You can save time, reduce costs, and streamline your operations by partnering with us.

Discover the power of collaboration with Oakter.

Get in touch today!

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