The TAO of TIMBUK2

 A San Francisco original since 1989, creating

loyal following as more than a bag, more than a
brand, Timbuk2 is a bond.
 San Francisco based company known for
.
producing high quality customized messenger
bag.
.
 Having never advertised, people discovered
TIMBUK2 for themselves
 Online reviews, Word of mouth, web search,
wearer.
What makes Timbuk2 unique?
 Each bag is custom design by the customer
itself.
 After the basic bag configuration and size is
selected than various lines, logos, pockets ,
straps are made available to choose from.
 Fast delivery
Expansion
 Started making some of their bags(laptop bags)
at a new location ‘China’
 Companies argues that they have designed best
quality bags at a reasonable price at San
Francisco.
 As it will be more complex to build and require
substantially more labor and variety of expensive
machine to produce.
 Question 1
Comparison of the competitive
dimensions of the messenger bag
and new laptop bag from China

Competitive Dimension Messenger Bag New Laptop Bag

Price Higher Lower

Quality Competitive Competitive

Delivery speed Overnight 3 to 5 business days

Delivery reliability Reliable Risk of late delivery

Other dimensions (color, customization, size, weight) Customized Standard

Manufacturing costs High Low

Durability “Bags that are tough as hell and are build to last a life High High
time”

Philosophy “Its not a brand, it’s a bond” High Lower

Sustainability 1 – 20% discount if you return your old bag High High

Sustainability 2 – “fantastic work environments”, “work High Lower

environment like no other”
Question 1
Comparison of the competitive dimensions of the messenger bag
and new laptop bag ex-China

 While the quality, customization, and price are maintained in the new laptop
bag made in China; from the table, it is visible that delivery speed and
delivery reliability could be compromised. Because of the distance factor, the
overnight delivery option will not apply with bags sourced from China.
Because of cultural and statutory holidays (e.g. Chinese New Year), there
could be periods when Timbuk2 would be less responsive and customers
might not be able to place and receive their orders on time.

 However, from the company’s point of view there is a benefit in terms of low
manufacturing costs through lower labor costs, guaranteed high production
volumes, and these act as trade offs to maintain competitive prices in the
market, although clients have to get used to a slightly longer delivery time
compared to the messenger bag produced in San Francisco.
 The company also stresses that the bags “imported” from China are still
designed in San Francisco and all materials and construction details are
specified by Timbuk2 to ensure that the manufacturing in China uses the
highest quality goods possible and meets the superior quality standards
customers expect.
Question 2
Comparison of the China and the San Francisco
Plants

Criteria China Plant San Francisco Plant

Volume / rate of production High Low

Required skill of the workers Medium-High High and Diverse

Level of automation High Low

Amount of raw materials Lower Higher

Finished goods inventory Higher Lower

Question 2
Comparison of the China and the San Francisco Plants

 From the analysis on the table, it is seen that China would have a
high volume / production rate compared to San Francisco due to the
fact that labor costs are lower (more workers); unlike San Francisco
where the number of workers is 25, labor costs being high, and
therefore the production of laptop bags in this plant would render the
company to be less competitive in pricing.

 On the other hand, the amount of finished goods inventory will be

higher in the China plant as compared to San Francisco which
applies lean manufacturing processes. Because of the distance
factor, this is unavoidable. The San Francisco plant uses ground and
overnight air freighting to regional customers and international
customers to specified delivery times. When compared to volumes
output versus transportation costs, the San Francisco plant would
have a higher ratio.
Question 3
Supply Chain diagram – San Francisco Plant – messenger bags
Supply Chain diagram – China Plant – laptop bags
Question 3
Supply Chain diagram – San Francisco Plant –
messenger bags

 Other than manufacturing cost, when making the sourcing decision Timbuk2
also has to consider the costs of transportation / shipping from the foreign
country to the US, paying special attention to the lead time / transit time; and
also the customs and taxation costs incurred all along the chain on the
product landing in the US. It is important that Timbuk2 fully assess all these
costs so they have a correct picture of the cost of the product landed in the
US.
 Other factors that also impact on the sourcing costs and that Timbuk2 has to
consider are:
 the high supply material quality cost and availability.
 environmentally friendly raw materials.
 reliability and long-term relationship with suppliers.
 the compliance with Timbuk2’s policy on ethical working conditions at the
manufacturing plant.
 dealing with fair trade suppliers that would also provide ethical working
conditions for their employees.