OEM/ODM
OEM and ODM are transaction models in which the receiving party manufactures apparel products and fabric sold under the requesting party's brand based on specifications, and they are distinguished by the scope of responsibility for planning and design.
Contents6 sections
Definition and Overview
OEM is a model in which the requesting party presents product planning, design, specifications, and so on, and the contracted party handles manufacturing. ODM is a model in which the contracted party is also involved in proposing planning and design, and develops and manufactures products sold under the requesting party's brand.
In practice, the boundary between the two is not always clear. For example, a transaction in which the contracted party prepares the basic design and the requesting party specifies the color, accessories, fabric, size, and so on may be called either ODM or OEM.
Situations in Fabric Transactions
In fabric transactions, this is used in situations where apparel brands or sewing factories select and arrange the fabric needed for a product and request production through to finished goods. The scope of responsibility and management method changes depending on whether the contracted party procures the fabric or the requesting party supplies it.
When using made-to-order fabric, decide the composition, color, fabric weight, fabric width, processing, and quality standards, then confirm whether it will be arranged from greige fabric or whether an existing fabric will be recolored or have its processing changed. Even when using ready-made fabric, confirm early whether stock can be secured and whether additional production is possible.
- Who procures the fabric and who supplies it
- Product number, color number, and lot of the fabric used
- Required quantity including usage allowance and cutting loss
- How color consistency and lot differences are handled in additional production
- Scope of responsibility for determining defects in the fabric and compensation
Key Points to Confirm and How to Handle Numbers
Before requesting a quotation, share the quantity, desired delivery date, sales region, item, size breakdown, specifications, inspection standards, and packaging format. Also make clear how much of the quotation includes the minimum lot, sample production cost, pattern-making fee, plate-making fee, material cost, and transportation cost.
There is no single correct answer common to all quantities or delivery dates. Since these vary greatly depending on the fabric production unit, dyeing and processing conditions, sewing process, and accessory procurement status, it is important to document the order quantity, allowable increase or decrease, delivery date start point, and deadline for specification changes in writing with numbers.
Numerical conditions such as dimensional tolerance, shrinkage rate, color difference, and inspection standards are agreed upon before sample approval. Including not only the numbers but also the measurement method, inspection target, and inspection timing helps reduce differences in interpretation during mass production.
Points to Prevent Misunderstandings
In ODM, confirm in advance the ownership of rights to design proposals, patterns, specification sheets, patterns, plates, and so on, and whether they may be used for other companies. Even in OEM, it is necessary to agree on confidentiality regarding the handling of the supplied design, brand labeling, and sales destination information.
Samples are managed separately by purpose, such as for planning confirmation, size and specification confirmation, and pre-production confirmation. Do not rely only on verbal or email revision instructions; share the latest specification sheet, approval date, and revision history among all parties involved.
In mass production, define the differences between the approved sample and the mass-produced product, the conditions for switching to substitute fabric or accessories, and the deadline and method for responding when defects occur. If both the contracted party and the requesting party designate a single final approver, delays in decision-making can be prevented.
Differences from Similar Terms
OEM and ODM are transaction models related to the planning and manufacturing of finished products. Made-to-order refers to making products by changing fabric, color, processing, accessories, and so on from standard specifications, and it may be done within OEM or ODM transactions.
A converter is a business that plans fabric and arranges weaving mills, dyeing factories, and so on, while handling sales and distribution. An OEM or ODM contractor may procure fabric from a converter, but the role it refers to is different.
Frequently Asked Questions
Which should I choose, OEM or ODM?
If your company can decide the design, pattern, specifications, and even the fabric itself, OEM is suitable. If you also want proposals for planning, design, fabric, and accessories, ODM is a candidate. However, do not judge by the name alone; confirm the person in charge of each process, approval authority, and cost burden.
When requesting OEM or ODM, what should I tell them about the fabric first?
Tell them the desired texture, blend ratio, color, pattern, intended use, required quantity, and desired delivery date. If you have candidate fabrics, share the product number and swatch, and decide whether you will supply the fabric or have the contracted party procure it. Before mass production, also confirm quality conditions such as lot, shrinkage rate, and colorfastness.
What documents are important before mass production?
Using the specification sheet as the standard, prepare the approved sample, pattern, accessories list, inspection standards, and shipping and packaging instructions. Also confirm the quantity, delivery date, unit price, and handling of specification changes in the purchase order or agreement. It is important that all parties involved share the latest version and approval history.
