Where in the World Is Timbuk2? Outsourcing, Offshoring, and Mass Customization
The Wharton School, University of Pennsylvania, USA
Kelley School of Business, Indiana University
Volume 9: 2015, pp. 5-28; ABSTRACT
This case chronicles a manufacturer of bicycle messenger bags (Timbuk2) struggling to maintain production in San Francisco. While there is a compelling case to move production to China, the decision is complicated because of the success the company is having in the mass-customization arena. In particular, the company sells profitably to customers who customize and order bags via the Internet and receive the bags after 2-3 days while (less profitable) standard bags are used to fill in the production schedule. The short lead times for the custom bags strongly favors domestic production. Moving the standard bags to China would lower labor costs but increase inventory costs and decrease the ability to run the domestic factory as efficiently.