What Is an Original Equipment Manufacturer?

Written by Kentec Medical

Developing and manufacturing your own medical equipment, devices, and instruments can be complicated and expensive. Original equipment manufacturers can help shoulder these burdens.

Aspiring medtech developers and smaller medtech companies seldom have the infrastructure to manufacture their products at scale. In such cases, medtech developers and companies often choose to collaborate with an original equipment manufacturer (OEM).

Broadly, an OEM is a company that produces the goods and components that other companies use to build their products before making them available to consumers. In the context of advanced medical equipment manufacturing, OEMs produce the devices, equipment, and instruments that help healthcare providers improve patient outcomes. This includes everything from simple tools like tongue depressors, surgical trays, and tubing to advanced imaging and NICU medical equipment.

A common practice in the world of OEM manufacturing is own-brand labeling, or “private labeling,” wherein a company purchases a finished product from a manufacturer and puts their own label on it. Sometimes known as “virtual manufacturing,” this process allows companies to more easily round out their equipment and service portfolios without having to design, produce, and package individual niche devices (which is the ultimate goal of OEM manufacturing).

What Do OEMs Do?

When developing parts for OEM production, manufacturers and product teams typically work through a few stages, beginning with a feasibility study that assesses any potential risks, technical specifications, material needs, and costs. This allows OEMs to determine whether a particular project is viable and worth pursuing.

From there, OEMs go through a product costing process, which breaks down the critical costs for procurement, prototyping, and assembling advanced medical equipment with the end goal of establishing production at accessible, profitable price points. Then, once a precise manufacturing schedule is in place — which is vital for avoiding delays and improving productivity — OEMs can move into the prototyping phase. Prototyping is a rigorous process of testing part designs to identify flaws or latent defects before production begins, thereby avoiding costly, time-consuming revisions down the line. Once approved, production begins, and the OEM starts shipping units to the medtech developer or company.

Why Use an OEM?

Working with an OEM is an excellent option for individual medical device developers or smaller companies who want to work on a large scale, but need help with the business and production sides of medical device development (since their own business models are typically built on bulk manufacturing, some OEMs will only take jobs that exceed a certain production volume threshold). OEMs do the majority of the heavy lifting — prototyping, manufacturing, distribution — so small device developers don’t have to.

Medical equipment suppliers and distributors can also benefit from partnering with an OEM. OEMs typically operate at much higher economies of scale and create products in larger quantities, which means suppliers and distributors are able to purchase certain kinds of medical equipment at more affordable rates.

From a regulatory standpoint, OEM-produced medical equipment is held to the manufacturer’s quality and testing standards, guaranteeing that you receive devices that consistently perform as designed. In some cases, you may even be able to take advantage of specialized components or proprietary technology that an OEM owns. By outsourcing the production of a medical device to an OEM, you’re freeing yourself up to focus on your core responsibilities while reducing your operating expenses and gaining access to better-quality products in the process.

Go To Market with the Right Team

If you’re a developer looking to get your medical device in front of a wider audience or a medical equipment supplier looking to purchase high-quality bulk products at great prices, you need a partner like Kentec Medical.

We can help you get to market faster, maximize value, and increase your ROI so you can focus on improving the health outcomes of patients in delicate health. We believe that every one of our clients needs reliable, high-quality devices in order to meet the needs of their patients and communities, which is why we’re committed to providing you with best-in-class support and a hassle-free customer experience. Contact us today to learn more.