In OMM, the OEM outsources product development and production based on a set of product requirements. The supplier demonstrates that the developed product meets the requirements, often based on existing building blocks. The responsibility for production and Life-Cycle Management of the product is also outsourced to the supplier. In this model, the product documentation becomes the property of the supplier. This allows a supplier to sell (more or less) standard solutions to multiple OEMs.
If an OEM itself does not have sufficient competencies or people to develop a product, this model can help launch a product into the market faster. The alternative of building your own competencies can often take years.
Quality – Using experienced developers of the supplier helps to develop a product that meets the desired quality standards.
Total Cost of Ownership – relative to the Black Box model, investments will be able to be lower because a product can be sold to multiple OEMs. It is obvious that the supplier also invests. On the other hand, product costs will be higher because of the higher margins required for the supplier.
Organization – in this model, the collaboration can be set up in a transactional way. In the most extreme form, the supplier itself becomes an OEM of a standard product.
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The OMM model is suitable if…