The term OEM, Original Equipment Manufacturer, refers to manufacturers who build products for others to sell under their own brand names. Such products are often also known as OEM. In the watch industry there are several ways in which OEM may occur. For example:
1. A manufacturer is contracted to produce the entire watch for the brand owners e.g. Sea-Gull building chronograph watches for Wagner in Germany and Plazeon in Thailand.
2. A watch assembling company is contracted to produce a watch made from bought-in components e.g. Million Smart Enterprises assembles watches for Aeromatic and Tauchmeister brands , using movements bought from Liaoning Watch Factory , and cases from some other company in Shenzhen.
3. A watch design company is contracted by a brand owners to produce an original design watch. They design the watch case around existing movement specifications and order the cases from a case maker. Assembly is subcontracted to yet another company. Some IK Colouring branded watches may fall into this category.
In this last example, the designing company may sometimes identify themselves as a 'manufacturer', especially if they also undertake the final assembly. The reason for this is that through the use of CAD (Computer Aided Design) feeding into CNC (Computer Numeric Control i.e. the programmed automation of multi-stage processes), the designer effectively 'controls the entire manufacturing process'. The out-sourced operators of the manufacturing equipment become almost incidental as it is the program that determines the output.
As these examples demonstrate, there are potentially many possible combinations of designers, manufacturers and marketers that may be involved in the production of a watch. Lower-priced watches are often ordered by a brand owner from an OEM catalogue, hence the frequency of identical watches with different names among so called ' mushroom brands '.