The Comprehensive Guide on When to Work With a System Integrator vs. an OEM

8 min read

This two-part article starts with a detailed introduction to System Integrators and Machine Builders (or OEMs) to help industry professionals understand their roles in industrial automation.

Understanding their responsibilities and capabilities will help companies decide who to hire based on a project’s nature, allotted time, and flexibility requirements. The second part of the article concludes by offering a detailed guide on what to look for when choosing an automation partner.

This post has two parts: read the second installment, “What to look for when working with a system integrator or an OEM,” here.

The second part takes a deep dive and shares the key factors to consider when collaborating with a System Integrator or a Machine Builder (OEM) for a successful system installation.


Industrial automation projects often represent a significant investment of time and resources. The timeline of such projects can be long, and the impacts on employees, stakeholders, and customers are far-reaching. Therefore, it is vital to choose the right partner for these projects.

Manufacturers can work with a System Integrator (SI) or a Machine Builder, also called Original Equipment Manufacturers (OEMs). Understanding their service offerings and technical capabilities can help manufacturers find the best match for their automation projects.

Role of System Integrators in industrial automation

System Integrators are the go-to experts for industrial automation. They are responsible for designing, implementing, and maintaining systems tailored to their client’s goals. System Integrators have a wide range of knowledge in sourcing and integrating hardware, software, networks, and sub-systems into a single system that can automate processes in the manufacturing sector. Other possible responsibilities include project management, staff training, and system maintenance.

System Integrators work with manufacturers in different sectors to understand their needs and develop the best automation solution to meet their objectives. However, each System Integrator may have a unique set of verticals they focus on. The most common verticals include water wastewater, warehouse & fulfillment, chemical, food & beverage, automotive, pulp & paper, and life sciences.

Depending on the company’s size and expertise, System Integrators that service multiple verticals have a broad scope of knowledge and the advantage of cross-pollinating best practices. They may be more creative in finding solutions. Conversely, specialized System Integrators will have a deep understanding and solid domain expertise in their industry. The firm size may be smaller than generalized System Integrators, but they tend to be more responsive and efficient. Most generalized System Integrators will have multiple offices to maximize the benefits of having a broader business portfolio, whereas specialized firms tend to have fewer locations.

Role of Machine Builders in industrial automation

Machine builders, also known as Original Equipment Manufacturers (OEMs), design, build and manufacture process equipment used in industrial automation. Their business model enables them to become highly trained in specific production processes of particular industries. Since OEMs own their equipment fabrication plants, compared to System Integrators, they can more easily demonstrate their equipment’s capabilities to potential clients. Pre-installation tests can also be done onsite rather than at a customer’s plant. OEM companies also offer additional services such as staff training and repair like their counterpart.

OEMs will supply to end-users (manufacturers) and System Integrators who integrate their production equipment into a cohesive industrial automation system. However, OEMs will also source hardware components from reputable suppliers critical to the machinery’s performance.

When should a manufacturer hire a System Integrator or an OEM for industrial automation?

Automation projects are long-term investments aiming to improve productivity, reduce waste, and lower production costs. Choosing the right partner is the first step to a successful installation.

Greenfield vs. Brownfield projects

A greenfield project in industrial automation refers to the construction or development of a new manufacturing facility from scratch without any existing infrastructure. It is a completely new automation project with no previous limitations, allowing for more flexibility in designing and implementing automation systems.

Hiring System Integrators for greenfield projects is generally ideal, as these projects involve integrating multiple technologies and production equipment from different vendors. System integrators have the expertise in integrating various components into a cohesive system that meets the end user’s requirements. They also work with multiple OEMs to source specialty equipment and components and ensure they work together seamlessly. Additionally, they should be able to integrate the system data with the end user’s ERP or database. 

Finally, experienced System Integrators are crucial to a smooth hand-off by providing plant-wide training to operators and educating in-house engineers on their equipment. They can also be the source of contact if any new equipment needs to be fixed.

Brownfield projects involve upgrading or retrofitting existing automation systems, which often involve legacy equipment and technology. Since brownfield projects are making incremental improvements to the existing facility, the project scope is generally smaller than a greenfield project. An OEM with specialized knowledge of replacing or upgrading equipment can provide a better solution.

OEMs have in-depth knowledge of their equipment and can provide technical support, troubleshooting, and maintenance services specific to their products. They can help ensure the new equipment is compatible with the existing system and can be integrated effectively.

Using a warehouse as an example, building an automated warehouse from the ground up requires experts with intimate knowledge of the flow of goods from receiving to shipping. The process encompasses many sub-systems, such as conveyors, scanning, shelving, packing, transporting, etc. A System Integrator specialized in warehouse automation would be the appropriate choice as they are experienced in collaborating with suppliers and designing an all-encompassing solution that meets the end user’s goals.

Conversely, when a meat processing plant is looking to improve employee safety by reducing the number of people working at the sawing stations, an OEM specializing in meat processing is the perfect candidate. The OEM company would have extensive knowledge in automating sawing of different animal parts and may already have machines with proven track records.

Degree of customization required

System Integrators are solution-driven. They may work on projects in the same industry one after another, but each solution shares only 70-80% in commonality. OEMs are product-driven, offering ready-to-deploy technologies for manufacturing plants of certain industries. Each of their installations deviates very little from one another, sharing about 90% in commonality.  

System Integrators are specialists in bringing together various sub-systems into a complete system that meets specific production requirements. Selecting from a wide range of suppliers allows them to build systems with better production flexibility. When the business operation requires a manufacturer to adapt to changing business needs quickly, it is ideal to work with a System Integrator to implement a highly-tailored automation solution.

OEMs are deeply knowledgeable in production processes in the fields they serve. OEMs typically provide pre-designed, pre-configured systems unmatched in productivity, precision, and accuracy. Additionally, OEMs have already tested the system, which allows for extremely efficient and rapid deployment, saving time and resources. However, they only offer customization to some extent to their clients. While they may seem to offer less production flexibility than System Integrators, their specialized equipment is often so efficient that it becomes the industry standard highly sought-after by manufacturing plants.

Because System Integrators can create highly-customized solutions, they tend to be big in project scope. It is, therefore, prudent to allow more time when working with them. Additionally, unlike the OEMs, whose equipment is pre-tested for deployment, most System Integrators do onsite system testing. Therefore, reserving sufficient time for equipment testing and program adjustments is advisable when working with a System Integrator. This approach requires more time and resources than working with an OEM, but a thorough run-through is necessary to ensure the automation system works as end-users intended.

What’s the takeaway?

Choosing the type of automation partner to work with often is not a clear-cut process, as there are more business aspects to consider. Also, knowing that one is not inherently better than the other is vital. Along with customization requirements and the nature of the project, additional factors such as budget and project management capabilities will also impact the decision. Companies searching for an automation partner should use a weighted decision matrix to help them conclude what best suits the company’s unique requirements.

Should you automate in-house?

Many major manufacturers have an engineering team that takes on automation projects and system integration for their facilities. There are tremendous benefits to owning an in-house automation team: complete customizability, control over proprietary algorithms, and intimate industry knowledge. However, working with a System Integrator or an OEM has the advantage of accessing the latest knowledge with proven results. Their vast clientele allows more innovation by cross-pollinating best practices from different industries. In-house engineers often lack the opportunity to witness first-hand how automation in other sectors works.

Only some manufacturers have a full-stack engineering team to take on automation projects on their own. Establishing a team would require significant investment in hiring and training personnel, purchasing equipment, and infrastructure setup, which may only be financially feasible for some. Additionally, these valuable resources tend to be underutilized as it is impractical to have capital upgrades year after year.

As such, creating an internal task group to collaborate with automation professionals such as a System Integrator and an OEM company is highly recommended. Automation companies have established processes and procedures that enable them to complete projects on time and within budget. Automation companies can also quickly scale up or down resources according to an end user’s requirements and timeframe, which is the flexibility an in-house engineering team may not have.

The first part of “The Comprehensive Guide on How to Choose the Right Partner for Industrial Automation Projects” illustrates the differences between a System Integrator and an OEM and when to work with whom. However, the task can be daunting when selecting from many qualified automation companies. The second installment of this article shares a comprehensive guide on what to look for when searching for the right fit. To stay up-to-date with the latest article, sign up for our newsletter or follow us on LinkedIn.

This post has two parts: read the second installment, “What to look for when working with a system integrator or an OEM,” here.

The second part takes a deep dive and shares the key factors to consider when collaborating with a System Integrator or a Machine Builder (OEM) for a successful system installation.

About The Author - Terry Hermary

Co-founder of Hermary.

Terry is the customer-facing machine vision expert at Hermary with over 30 years of experience. With a background in electrical engineering, he specializes in developing 3D vision applications with system integrators and machine builders. He is passionate about solving unique automation challenges using 3D vision technologies. Over the past three decades, Terry and his team have established Hermary as the leading innovative 3D machine vision provider, revolutionizing industries from sawmilling to meat processing.


  • Co-founded Hermary Machine Vision in 1991
  • Patent holder of many 3D machine vision inventions