Moving from OEM to ODM or Branding16-Jun-2005
Article published for the awards program
Design beyond Original Equipment Manufacturing (OEM)
In line with the world economy Taiwan is experiencing exiting shifts and changes. Product development processes have moved from an OEM (Original Equipment Man.) to ODM (Original Design Man.) environment and some frontier organizations are even branding or showing interest in branding their own innovations.
Now what does it mean to go from OEM to ODM?
Taiwan has excellent engineering capabilities but when moving to Original Design Manufacturing, superior engineering teams need to be complemented with other disciplines. This to answers crucial questions that go beyond engineering and specifications.
· What is the core value proposition we add to our product?
· Where do we stand out from the crowd?
· How does this proposition translate to added value for our client?
· What works for customer A does not necessarily work for customer.
· How can we customize for a wide variety of target groups?
In the past OEM partners already solved these aspects before releasing projects to Taiwan. Now the same partners are demanding Taiwanese enterprises to answer these questions for them. The solutions need to be found in a company’s core strength and innovation strategy; in marketing, psychographic and trend analysis; and in user, segment and region focused product development.
After ODM companies have launched a product or service they need to immediately investigate and catalogue what they learned from the endeavor and how they are going to improve? History of economics shows us that there is always room for improvement and it is through lessons learned that next generation strategies should be created. Again, under the OEM model this was provided by the partner companies.
What does it mean to go from OEM to Branding?
To become a brand, a much more holistic approach over a long period of time is imperative to create success. An umbrella strategy needs to be directed down from management and it has to radiate throughout an entire organization, from the Directors in the board room to the assembly workers in the factory. This is not done overnight and it is far more complex than creating a name, a logo and some advertising.
At its core, Branding is about creating customer loyalty through brand equity. Brand equity, in terms, is achieved through rigorous consistency; consistency in quality, consistent core value representation, and consistent portfolio extension. Over a long period of time this will generate brand believability.
One bad experience can easily set back years of dedicated commitment so companies are not allowed to falter once! To create such an environment is an enormous task and I will not have enough time today to go into the working details, my speech would last many hours. However with ODM and Branding as a background I came up with the title “Design in Taiwan, Change is more important than ever”.
Why is this the case?
Proper design consulting plays a prominent role in these new business models and designers need to act with persistence and commitment to help guide development strategies in the right direction. By no means can this role be solely fulfilled by the creative disciplines only. But design teams need to act like mediators that glue multidisciplinary teams together. A wide array of experts needs to be brought together. They include:
· Engineering & Manufacturing
· Sociological & trending analysts
· Ergonomic experts
· User interface specialists
· Sales and promotional teams
· Industrial and Graphic designers
Slowly but surely designers in Taiwan will have to work to change mindsets within the corporate culture. In a typical manufacturing structure, industrial, graphic, user-interface and interactive media design are considered to be support functions to engineering. They are a follow up teams that package engineering innovations.
In consumer oriented development design needs to form an integrated part of the planning and strategy process. Product briefs need be accumulated using input from all sides. Design teams will have to step up to the plate to articulate the emotional aspect of product development. They need to infuse the “I want it” factor.
To produce devices that resonate with the targeted market segment is not an easy feat. Designers need to create a balance between desire and meaning, neither of which can be calculated or quantified. It is difficult to explain and defend the importance of design criteria without having volumes of numeric data to back it up. Designers need to be strong and determined even within the most consumer driven development teams.
Why is change more important than ever? Because designers in Taiwan face an uphill battle where they need to educate the importance of these emotional values. They need to defend at-all-cost the balance between the cost driven strategies of the past and the meaningful but still cost effective product development of the future.
Because the emotional value is immeasurable in the beginning of a development process it very difficult to convince previously engineering driven teams to stay the course. Taiwanese designer do not have to improve their design capabilities or taste they are quite good already. They need to learn how to keep the entire development team behind the intended design strategy.
Doing so will lead to a positive total user experience. People will enjoy a product form the moment they unpack it all the way to long-term ownership. This creates return business from ODM partners or even better….. it creates the brand value and equity!