OEM vs. ODM: Which is Right for Your Business? - Katana MRP

Which is right for my manufacturing business?

Choosing the perfect manufacturing model for your company is challenging and shouldn’t be taken lightly. You know your business and its specific needs and processes, so there is no one-size-fits-all solution. One isn’t generally better than the other, but one could offer more benefits to your business. Here are some key points you may want to consider when deciding on a manufacturing model.

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Design expertise

If your business has strong design capabilities and can create unique and innovative products, then ODM may be your better option. On the other hand, if you lack design expertise and need products to be made to your specific requirements, OEM may be a better fit.

Cost considerations

ODM products are generally less expensive to produce, as the manufacturer has already invested in design and tooling. If manufacturing cost is a significant factor for your business, then ODM may be the better option.

Brand identity

If you want to build a strong manufacturing brand identity and market your products as your own, OEM may be the best solution for your business. However, ODM may be a better fit if you are willing to sell products under the manufacturer’s brand and focus on delivering quality products at a lower cost.

Industry and market requirements

Some industries and markets require specific certifications or compliance with regulations. If your products require particular certificates and standards, OEM may be the better option, as you can outsource to a manufacturer who has already taken the time to get certified.

How can Katana help manage your manufacturing?

Katana is a cloud-based production planning and inventory management software for small and medium-sized manufacturers, including ODM, OEM, and CM businesses. Whether you create your own products from scratch or outsource your manufacturing, in both cases, there are many areas of the business to oversee.

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Inventory management

One of the most essential features of Katana is its inventory management capabilities. It allows manufacturers to track their inventory levels in real time, including raw materials, work-in-progress, and finished goods. This can help OEMs and ODMs optimize inventory levels and reduce waste and stockouts.

Outsourced Purchase Orders (OPO)

Outsourcing refers to sending some or all of your purchase orders to be fulfilled by a contract manufacturer outside your own business. Outsourcing can be useful for companies that don’t have the capacity to produce goods in-house or need to access specialized equipment or skills. We’ve even put together a video series explaining OPOs and how they work in Katana.

Production planning and scheduling

Katana allows manufacturers to schedule production, create and manage manufacturing orders, assign tasks to employees, and track the progress of each assignment. Shop-level workers can access their tasks in the Shop Floor App, where they can view and edit them, triggering changes in inventory levels and production operations. This way, manufacturers can streamline their production processes and eliminate inefficiencies.

Bill of materials management

Using Katana, manufacturers can create and manage bills of materials for their products. This can help ODMs ensure they have the necessary raw materials and components to manufacture their products, and OEMs keep track of their supplies and parts.

Live data and insights

Katana provides users with real-time information and manufacturing analytics about their production processes. With this feature, manufacturers can track sales, monitor the progress of production orders, and identify areas where to optimize their operations to reduce manufacturing waste and increase efficiency. The data and insights feature also includes customizable dashboards and reports, which allow users to visualize their data and highlight the statistics most essential to their business.

Integration with other software

With Katana’s open API, users can integrate with other software tools, such as accounting software, e-commerce platforms, and CRM systems, to fulfill their specific business needs. There are also many existing integrations to build a custom workspace and create personalized workflows.