Cai Jing Wang·2025-04-11 07:19Core Insights - The manufacturing landscape is evolving from OEM/ODM models to vertical integration due to increasing supply chain uncertainties and rapid market changes [1][4][5] Group 1: OEM/ODM Models - OEM and ODM models have been widely adopted in the context of globalization, allowing manufacturers to outsource production to specialized suppliers, thus optimizing efficiency [1] - These models have led to significant cost savings by establishing production bases in low-labor-cost countries, particularly after China's entry into the WTO [1] - However, the reliance on outsourcing has exposed vulnerabilities, such as quality control issues and instability due to production delays and geopolitical tensions [4] Group 2: Vertical Integration - Companies like Tesla and SpaceX have shifted towards vertical integration, controlling key supply chain elements to enhance quality, accelerate innovation, and scale production without external constraints [2] - Apple transitioned from relying on Intel for processors to producing its own M-series chips, gaining unprecedented control over hardware and software integration [3] - Amazon has invested heavily in building its logistics and distribution infrastructure, moving away from third-party carriers to create a self-sufficient network [3] Group 3: Industry Trends - The trend towards vertical integration is evident across various sectors, including traditional manufacturing, where companies like BYD and major automakers are developing their own critical components [3] - The COVID-19 pandemic highlighted the importance of supply chain security, leading to a fragmented global trade environment that further exposed the weaknesses of the OEM/ODM model [4] - The semiconductor shortage during the pandemic resulted in over 10 million vehicles being cut from production in the automotive industry, illustrating the risks associated with over-reliance on external suppliers [4] Group 4: Future Outlook - Vertical integration, while requiring significant investment and management capabilities, positions companies to thrive in competitive markets by ensuring quality and fostering innovation [5] - The shift from OEM/ODM to vertical integration is seen as a necessary evolution in response to market demands for speed, precision, and supply chain stability [5] - Embracing vertical integration is viewed as a key strategy for companies aiming to lead their industries in the future [5]