Running head: UNIT I CASE STUDY 1

Unit I Case Study

Columbia Southern University

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Timbuk2 is San Francisco-based manufacturing company “known for producing high-

quality custom and classic messenger bags direct to customer order” (Jacobs & Chase, 2010, pg.

36). The key competitive dimensions that are driving sales of the custom messenger bag are its

known superb durability and perceived affordability. This mix of quality and economic

convenience stimulate sales because the mix provides customers with an opportunity to purchase

durable, customizable messenger bags at a price they can afford.

The competitive priorities for the new laptop bags to be sourced in China are not at all

different from that of the custom messenger bags produced locally in San Francisco. The primary

objective is still to provide the “best possible features, quality, and value at reasonable prices”

(Jacobs & Chase, 2010, pg. 37) that has fostered such a strong customer following. Moving the

production of the new laptop bags to China ensures that Timbuk2 can continue to provide such a

product, as this move keeps costs low without compromising the quality of the product or the

standards of the company.

The volume or rate of production of the assembly line in China compared to that in San

Francisco should be virtually the same, as the method of how the products are being assembled is

not changing; therefore, implementing new designs should not have a major impact on the

overall production rate of the company, whether in China or San Francisco. The differences,

however, may lie in the actual production rate of each facility. With the different design

specifications of each type of bag, each facility may have a different production rate, but the

overall volume of which each facility is capable should not change.

The required skill of the workers will vary from facility to facility (Jacobs & Chase,

2010, pg. 37), especially considering the design complexities associated with the new laptop bag
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to be manufactured in China; however, the level of skill needed to assemble either product will

share similarities. An assembly line worker in China may have a different set of skills compared

to an assembly line worker in San Francisco because of the differences in the products, but each

assembly line worker will require a certain level of skill to perform the tasks at hand, making the

skill levels of each worker, as related to their respective duties, similar.

The level of automation and the amount of raw materials and finished goods inventory

may be where the facilities differ most. The complex design of the new laptop bag requires “a

variety of very expensive machines to produce” (Jacobs & Chase, 2010, pg. 37). The machines

needed to produce the new laptop bags in China will differ from the machines currently in used

to produce the customizable messenger bags in San Francisco. While both facilities will have

raw materials on hand, the amount of raw materials and finished goods inventory will differ. The

raw materials will vary from plant to plant due to the differences between products, as the

materials needs to produce the customizable messenger bag will not bear as much resemblance to

the materials needed to produce the new laptop bags.

Since the customizable bags are shipped directly to the customer, the finished goods

inventory will be significantly less than that of the non-customizable bags. If the laptop bags are

produced according to standard design, as opposed to the customizable messenger bags, the

manufacturing plant in China stands to have more finished product inventory on hand than the

manufacturing plant in San Francisco and vice versa.

The supply chain for the products sourced in China begins with raw materials arriving at

the plant from the Timbuk2 plant in San Francisco and then being manufactured according to the

design specifications, and the finished goods are then sent back to the San Francisco plant until
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ordered by customers, unless Timbuk2 ships directly from the China facility, causing the finished

goods to be held as distribution inventory until the time it will be shipped to the customer.

The supply chain for the bags produced in San Francisco begins with the plant receiving

raw materials from the supplier. As orders are received, the bags are assembled according to the

“configuration, size, color, pocket, and strap options” (Jacobs & Chase, 2010, pg. 36) chosen by

the customer and shipped directly to the customer, via overnight delivery (Jacobs & Chase,

2010).

Other than manufacturing costs, Timbuk2 should consider the transportation costs

associated with sourcing to China. Materials have to be shipped to the plant to be assembled and

shipped back once finished. If products are shipped to customers from the China facility,

transportation costs would see another increase, as shipping costs from China may be

significantly more than shipping locally from the San Francisco facility.
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Reference

Jacobs, F. R., & Chase, R. B. (2010). Operations and supply chain management (13th ed.). New

York, NY: McGraw-Hill.