OEM, Contract Manufacturing, and Custom Development

Some customers want food machinery under their own brand; others have very specialized products for which no ready-made machine exists. These two needs correspond to OEM and custom development respectively.

The Difference Between OEM, ODM, and Custom Development

• OEM (original equipment manufacturing): The design and specifications are provided by the client or confirmed by both parties; the machine maker manufactures, and the machine carries the client's brand.
• ODM (original design manufacturing): The machine maker uses its own design, adjusted to the client's needs, and ships it under the client's brand.
• Custom development (dedicated machine): A machine designed from scratch for a specific product and process, usually for the client's own use.

In Dong-Yih Machinery's history, a machinery repair and OEM assembly factory was established in 1989; in 1991 a machinery R&D department was set up to build specialized food machinery to order; and after reorganization in 2001, the company has specialized in manufacturing all kinds of automatic food encrusting and forming machines.

Can I Have Dong-Yih Build Machines Under My Brand?

Whether it's possible, and on what terms, depends on the model and the nature of the collaboration; please call Dong-Yih Machinery directly to discuss (06-257-4644). Before the discussion, think about:

1. What type of machine do you want? An existing model rebranded, or modified specifications?
2. Expected quantity and delivery schedule.
3. Which markets will it be sold in? For export, which countries' regulations must it meet?
4. Who is responsible for after-sales service?

Minimum Order Quantity

OEM usually has a minimum order quantity, because rebranding requires nameplates, panels, manuals, and packaging, and sometimes even mold changes, and these setup costs must be spread over volume. Minimums vary by company; please call for Dong-Yih Machinery's terms.

Custom-developed dedicated machines, on the other hand, can often start from a single unit, but development costs are reflected in the labor hours for design, prototyping, and trial builds.

Technical Confidentiality

Before the collaboration begins, we recommend both parties sign a non-disclosure agreement (NDA) that clearly covers:

• Scope of confidentiality: recipes, product specifications, production volumes, customer lists, machine drawings.
• Duration: how long confidentiality lasts after the collaboration ends.
• Exceptions: information already public, and each party's pre-existing technology.

Then agree in the formal contract on:

• Ownership of drawings and intellectual property: Who owns patents and drawings for newly developed mechanisms and dies? Can the client take the drawings to another maker?
• Exclusivity: Can the machine maker sell the same design to others?
• Acceptance criteria: which ingredients, how long a run, and what weight variance counts as passing. See Trial Runs and Acceptance.
• After-sales responsibility: who is responsible for warranty, parts supply, and repairs, which must be spelled out even more clearly when the machine carries the client's brand.
• Regulatory responsibility: who is responsible for obtaining certifications for safety and hygiene requirements of exported products. Under Article 5, Paragraph 2 of Taiwan's Occupational Safety and Health Act (職業安全衛生法), designers, manufacturers, or importers of machinery must carry out risk assessments at the design, manufacturing, or import stage.

General Custom Development Process

1. Requirements interview: product samples, recipe characteristics, target output, factory conditions.
2. Feasibility assessment: trial production with existing mechanisms to see whether it can be done.
3. Design and quotation: confirm specifications, drawings, schedule, and cost.
4. Build and trial run: trial and adjustment using the client's ingredients.
5. Acceptance and handover: acceptance against the agreed criteria, installation, and training.

For what to prepare before requesting a quote, see What to Prepare Before Requesting a Quote.

FAQ

Q: Can Dong-Yih build a dedicated food machine for me?
A: Dong-Yih Machinery set up its R&D department in 1991 and builds specialized food machinery to order. To find out whether your product can be done, you're welcome to call with samples and requirements.

Q: What's the minimum number of units for OEM?
A: Terms vary by company; please call for Dong-Yih Machinery's minimum order quantity.

Q: Who owns the drawings for a custom-developed machine?
A: It must be agreed in the contract. Common arrangements include ownership by the client, by the machine maker, or joint ownership with restrictions on use.

Q: Should we sign an NDA first?
A: When recipes and product specifications are involved, we recommend signing an NDA before providing any information.