Timbuk2
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- Date Submitted: 07/26/2011 11:56 AM
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Timbuk2: Outsourcing, Offshoring and Mass Customization
Introduction:
Timbuk2 was founded in 1989 by Rob Honeycutt, a San Francisco bike messenger. Honeycutt wanted to develop a messenger bag that was rugged enough for everyday wear and tear, but chic enough to set a fashion trend. The company founded its success based on its lean manufacturing and mass customization principles. With many of the American companies now outsourcing their manufacturing processes to China, it became hard for Timbuk2 executives to ignore the labor cost benefits that Chinese manufacturing would provide. Dealing with different channels (wholesale/retailers, e-commerce, etc), Timbuk2 also had to find a way to improve their mass customization processes and determine if it was feasible for them to offer their clients more choices (colors, sizes, patterns, etc). In this case, Timbuk2 has two very distinct problems. The first problem is concerned with Mass Customization of their products. Should the company offer its clients more variety of choices when customizing their very own bags? The second problem is concerned with whether or not Timbuk2 outsource its manufacturing production to China due to it’s significantly low labor costs?
Analysis:
Mass Customization:
Timbuk2 sells its products through different channels, such as the traditional domestic wholesaler and retailers, e-commerce, corporate and international channels. The most profitable channel for the company is the e-commerce channel, with an average of $96.75 per bag. Their least profitable channel is the international channel with an average sale of $29.74 per bag.The e-commerce channel has proven to be their strongest channel with sales of almost $1.6 million a year. Timbuk2 is now faced with the challenge of determining if they should offer more color palettes, different designs, and different logos placements to their customers. Although, offering more variety to their customers will have definite benefits, it will...
Introduction:
Timbuk2 was founded in 1989 by Rob Honeycutt, a San Francisco bike messenger. Honeycutt wanted to develop a messenger bag that was rugged enough for everyday wear and tear, but chic enough to set a fashion trend. The company founded its success based on its lean manufacturing and mass customization principles. With many of the American companies now outsourcing their manufacturing processes to China, it became hard for Timbuk2 executives to ignore the labor cost benefits that Chinese manufacturing would provide. Dealing with different channels (wholesale/retailers, e-commerce, etc), Timbuk2 also had to find a way to improve their mass customization processes and determine if it was feasible for them to offer their clients more choices (colors, sizes, patterns, etc). In this case, Timbuk2 has two very distinct problems. The first problem is concerned with Mass Customization of their products. Should the company offer its clients more variety of choices when customizing their very own bags? The second problem is concerned with whether or not Timbuk2 outsource its manufacturing production to China due to it’s significantly low labor costs?
Analysis:
Mass Customization:
Timbuk2 sells its products through different channels, such as the traditional domestic wholesaler and retailers, e-commerce, corporate and international channels. The most profitable channel for the company is the e-commerce channel, with an average of $96.75 per bag. Their least profitable channel is the international channel with an average sale of $29.74 per bag.The e-commerce channel has proven to be their strongest channel with sales of almost $1.6 million a year. Timbuk2 is now faced with the challenge of determining if they should offer more color palettes, different designs, and different logos placements to their customers. Although, offering more variety to their customers will have definite benefits, it will...