Where in the World Is Timbuk2?
Outsourcing, Offshoring, and Mass Customization1
Brennan Mulligan paused to admire the San Francisco skyline before entering the leased building that housed all of Timbuk2’s activities, from management to manufacturing (Figure 1). Who would imagine that anyone could profitably manufacture a textile product in San Francisco in 2002? With competition not only from lower-cost centers in the United States but also from China and other places in the Far East, a converted warehouse building in San Francisco was an unlikely location for this manufacturing business. Yet Brennan was not sure Timbuk2 could continue indefinitely to produce everything in San Francisco. While the pride and satisfaction of producing in San Francisco was ingrained in Timbuk2’s culture, and moving production elsewhere would be a huge change for a small company with local roots, Timbuk2 needed to remain profitable. Hence, Brennan knew there was no easy answer to the question on the table: Should Timbuk2 outsource some (or all) of its production to a Chinese firm?

Figure 1: Timbuk2’s neighborhood in San Francisco

This case was written by Professors Gérard Cachon (The Wharton School, University of Pennsylvania), Kyle Cattani (Kelley School of Business, Indiana University), and Serguei Netessine (The Wharton School, University of Pennsylvania) as the basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Some numbers in this case were adjusted to simplify the case analysis and to protect confidential business information. The authors are grateful to Brennan Mulligan for his assistance in writing this case. Copyright © 2007 by Cachon, Cattani, and Netessine.

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History and processes Timbuk2 was founded in 1989 by Rob Honeycutt, a San Francisco bicycle messenger with an old sewing machine. The