...CASO TIMBUK 2 Timbuk2 fue fundada en 1989 por Rob Honeycutt, un mensajero en bicicleta de San Francisco con una vieja máquina de coser. El sitio Web Timbuk2 (www.timbuk2.com) describe la meta de Rob, "para hacer una bolsa de mensajero lo suficientemente resistente para los mensajeros reales de bicicleta, y lo suficientemente elegante como para atraer a un mercado más amplio de jóvenes. Utilizo el lema hecho en “San Francisco” como orgullo y satisfacción de productos nacionales. Al principio, Rob comenzó a interesarse en la fabricación “Lean Manufacturing” (manufactura esbelta) y la personalización en masa, contrató a Brennan Mulligan, para más tarde incluir en el equipo a otros cuatro chicos, que, junto con Rob y Brennan, dirigían a Timbuk2. La colegialidad y la informalidad caracterizan el ambiente de trabajo. En 1996, Timbuk2 fue en una operación de marcha suave vendiendo una variedad de bolsas de mensajero para bicicleta y productos similares, cuyo proceso de fabricación se caracteriza en primer lugar por la manufactura esbelta y luego por la personalización en masa, una vez alcanzado estos dos procesos de manufactura se empezó a reflejar en los numerosos cambios que se habían implementado, ya que si la compañía no lograba estos procesos de manufactura sus procesos no serían aptos para lograr despachar a este tipo de mercado, (personalizado). Lean Manufacturing hace mucho énfasis en la eliminación de residuos y la mejora de la calidad a través de lotes más...
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...The Tao of Timbuk2 1. Consider the two categories of products that Timbuk2 makes and sells. For the custom messenger bag, what are the key competitive dimensions that are driving sales? Are their competitive priorities different for the new laptop bags sourced in China? For the custom messenger bag, the key competitive dimensions that are driving sales are high-quality custom (bags are worn daily for a decade), reasonable price, high differentiated design (customers select the basic bag configuration, size, color, pocket and strap options themselves), convenience in purchasing (customers can buy bags that are tailored to the exact specifications they like by just getting on the website), quick delivery speed (sent by overnight delivery directly to the customer), flexible and very quick new product introduction speed (people design new products online everyday). Since the new laptop bags are made in China, the shipping speed is not as quick as that of the messenger bags made in San Francisco. But other competitive priorities are not so different, especially for the retail price, which is lower comparing to the other laptop bags of the same quality, features and functions. Since these bags are more complex to build and require more labor and a variety of different machines (more expensive) to produce these products, to keep the prices lower for the consumer, outsourcing the manufacturing of these bags is necessary. Putting up factories in China makes labor costs cheaper...
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...The Tao of Timbuk2 There are several companies that rely on advertising themselves as a pure “American made” brand that drives loyalty and alludes to superior quality. The case of Timbuk2 brands lends itself to a similar strategy in that customization requires the product to be hand made. What makes their brand unique is that the many options provided to customers require the company to have workers employed by their craft. Traditionally our minds gravitate towards less quality and value when associated with other manufacturing based countries so much so that our culture jokingly remarks about it regularly in television and through other popular mediums. In the case of Timbuk2, the buyer’s dedication to their bag is in part because of the durability allowed by a team of skilled and veteran workers in San Francisco. The company is in a classic predicament of the sustainability requirements for shareholders in that it needs to continue to make profits while still offering customization for the dedicated consumers. The newly added messenger bags threaten excessively high labor costs that could compromise the organization’s ability to meet future needs and consequently cut into the value for investors. The question lingers that the doubt from steadfast customers concerning the move to China may also threaten the sustainability of Timbuk2. Companies like Timbuk2 are often run by owners that can implement lean manufacturing techniques in the midst of mass customization...
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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...
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...Introduction Timbuk2 has been a San Francisco original since 1989 and has reputation and a loyal following among real-life, hard-working bicycle messengers and cycling enthusiasts. In the case of “The Tao of Timbuk2” the company took some risk of losing its loyal customer base by moving its new productions to China. This paper will address the three questions for the case. 1. Consider the two categories of products that Timbuk2 makes and sells. For the custom messenger bag, what are the key competitive dimensions that are driving sales? Are their competitive priorities different for the new laptop bags sourced in China? The key competitive dimensions driving sales for Timbuk2 are quality and speed of delivery. Product or service is defined by the two characteristics; design quality and process quality allowing for establishing a level of design quality that focuses on the requirement of the customer. (Chase) The most impressive competitive dimension for Timbuk2 is their custom bags are Delivery Speed. Once the order is completed by the customer on the Timbuk2 web site, a custom designed bag reaches the customer two days later. Customers and end consumers now dictate what will be produced, when products will be delivered and what they will pay for that level of service. The local manufacturing for Timbuk2 focus of custom messenger bag is a direct example of the driving need for speed in manufacturing to meet the expectation of customer. Internet ordering capability...
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...Ray Sears P301 Homework #2 1/31/2012 Chapter 2 Problems 3, 4, 8, Tao of Timbuk2 case Problem 3. Find the total productivity = total output/total input OUTPUT Total output = 50,000 cages X $3.50 per unit = $175,000 INPUT Total wages paid = 620 production time labor hours X wages $7.50 per hour = $4,650 Total input = Total wages paid $4,650 + raw materials total cost $30,000 + component parts total cost $15,350 = $49,850 Total productivity = $175,000/$49,850 = 3.51 Problem 4. What is the labor productivity for each car INPUT Deluxe car input = 20,000 labor hours X $12 per hour = $240,000 Limited car input = 30,000 labor hours X $14 per hour = $420,000 Total input = deluxe car input $240,000 + limited car input $420,000 = $660,000 OUTPUT Deluxe car output = 4,000 cars sold X $8,000 per car = $32,000,000 Limited car output = 6,000 cars cold X $9,500 per car = $57,000,000 Total output = deluxe car output $32,000,000 + limited car output $57,000,000 = $89,000,000 Labor productivity deluxe car = $32,000,000/$240,000 = 133.33 Labor productivity limited car = $57,000,000/$420,000 = 135.71 A problem with this labor productivity is that it does not compare the number of cars sold to the number actually produced. Also, It should compare these stats to earlier years. Problem 8. Sales = $45,000 April, $56,000 May 8 full time employees working 40hrs a week = 320 hours total a week April had 7 part-time employees working 10 hours a week for 4 weeks...
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...Success Is in the Bag Timbuk2 began like many entrepreneurial businesses—it was started by someone whose need wasn’t being met by the marketplace. A San Francisco bike messenger designed a rugged and stylish shoulder bag to carry during his workday. It was so popular with friends and acquaintances that he soon quit his job to start making the custom bags. The new company attracted devoted customers among young professionals both male and female—and fellow bike messengers—but within a few years it was nearly bankrupt. Backed by private investors and a venture capital firm, Mark Dwight bought Timbuk2 a few years ago and swiftly turned the company around. It now produces more than 30 different products, and its San Francisco factory turns out a bag every 15 minutes. Business has been so good that Timbuk2 recently distributed a total of $1 million in bonuses to its 40 non-management workers to celebrate a banner year with sales of more than $10 million. Production has doubled; more than 1000 specialty retailers in the outdoor, bicycle, and personal computer markets carry Timbuk2 bags nationwide. The company’s e-business arm has tripled in size. Most important, the firm now operates with a positive cash flow and is solidly profitable. When he bought the ailing form, Dwight knew he would have to bring in experienced managers and impose a carefully thought out vision for the future. He put together a team of industry veterans and with their help mapped out a detailed...
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...Timbuk2 Case Study Page 1 1. COMPANY OVERVIEW Timbuk2 creates, produces, and sells bags. Its products include custom messenger bags, laptop messenger bags, and backpacks, as well as travel bags, totes, duffel bags, camera cases, shoulder bags, laptop sleeves and wallets. The company also offers accessories and clothing. It sells its products through specialty retailers, its own retail store, and online through its website. 2. SWOT ASSESSMENT Strengths At the time Mark Dwight purchased the company, Timbuk2 was a popular bag company that produced a trendy bag at a reasonable price. Timbuk2’s bag was very light but very durable and weather resistant. It had established itself amongst young male and female professionals as a stylish yet practical bag. Timbuk2 had just perfected its production method for creating the custom bags. This system adapted...
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...What is CVP? CVP or Cost Volume Profit analysis is an extremely interesting subject and one of the most useful for helping managers with short-term planning and decision making. This is because CVP analysis emphasizes the interrelationships of costs, quantity sold and price, it brings together all the financial information of the firm. CVP helps the managers understand the relationship between cost, volume and profit in organization by focusing on interactions among the following five elements: Price of products, volume or level of activity, per Unit variable cost, total fixed cost, mix of product sold. The technique mainly involve require costs to be separated into their fixed and variable elements. Fixed costs are those that stay in the same in total regardlss of the number of units produced or sold. For example, depreciation of the machine, no matter wether the machine is used or not, the depreciation expense will be the same because it is based on the number of years the machine will be in service. Then, variable costs are the costs that change in total each time an additional unit is produced or sold. For example, direct material or direct labor. The cost will increase inline with the product produced. Graphically, the total fixed cost is straight horizontal line while the total variable cost lines slopes upward. CVP graphs rely on some important assumptions as follows: 1. A linear revenue function and a linear cost function. 2. The price, total...
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...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...
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...of www.timbuk2.com A Case Study of www.timbuk2.com Timbuk2 is a San Francisco-based company that specializes in manufacturing ready-made and custom-made messenger bags. A messenger bag is also called a courier bag. It is a type of sack, usually made out of some kind of cloth worn over one shoulder and often used by bicycle messengers. To its owner, a Timbuk2 bag is a dependable, everyday companion. Many Timbuk2 bags are worn daily for a decade, or more. It is common for a Timbuk2 bag to outlive jobs. Timbuk2 messenger bags commonly incorporate certain technical features that make them suitable for cycling such as specialized fittings for loosening and tightening the main strap, reflective materials, compression and stabilization straps, and waterproof lining. Timbuk2 is popular among bicycle messengers and cycling enthusiasts. Over the years, Timbuk2 messenger bag has outgrown its working-class roots. It is now increasingly adopted by a growing number of urban, students, and young professionals as a stylish alternative to the ever-present two-strap day pack and the formal black briefcase. Timbuk2 remains faithful as ever to its working-class urban roots, while expanding its city-bred sensibilities to a broader range of products and a wider audience. All its new products share a sense of style, toughness, attention to detail and dedication to quality. Messenger bags are often used as a fashion accessory. Timbuk2 messenger bags are often commonly employed by men to carry...
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...Chapter 7: Timbuk2: The Message Is in the Bag (Summary) Timbuk2, founded in San Francisco more than 15 years ago by former bicycle messenger Rob Honeycutt, manufactures what seems to be a specialized product: messenger bags for cyclists who make their living delivering documents door to door. Today, Timbuk2 still manufactures professional bags for bike messengers. The firm has expanded its offerings to include fashion bags for other consumers-and its goals and plans are much broader than they were fifteen years ago. "Our goal for the future is to remain faithful to our working-class urban roots, while expanding our unique qualities and design sensibilities to a broader range of products and a wider audience," states Timbuk2's Web site. "The difference between strategy and goals is, goals are the endpoint and strategy is the way to get there. The actual steps you take would be the tactics," Dwight explains. Timbuk2's current goal is to move from a tiny, specialized market into a broader market. "Our roots are in the bicycle messenger market ... a subculture that is very interesting.... However, it isn't really a market; there's no growth there. So what we're trying to do is build from that heritage, that authenticity that gives value to our brand as a lifestyle brand," says Dwight. "Then, when we go to sell the company or take it public, there's value there." So every effort, from the development of new products to the marketing of existing ones, focuses...
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...Project Management Case Studies: IKEA and Timbuk2 Table of Contents Case I: IKEA Design and Pricing 3 Case Summary: 3 Key Terms: 3 Case Questions 5 Conclusions 9 Case II: The Tao of Timbuk2 9 Case Summary: 9 Key Terms: 10 Questions: 11 Conclusions: 15 Bibliography 16 Case I: IKEA Design and Pricing Case Summary: IKEA is a Swedish retailer that dominates the home market in 32 countries and is currently expanding in the United States. The success of the company is providing low cost products that include function, modern design, environmental considerations and healthy manufacturing conditions. IKEA designs its products, manufacturing, and distribution systems with the target price in mind. IKEA’s processes and corporate mantras feel unique and cheerful. Both customers and employees count on the company to operate responsibly. IKEA makes customers feel like they are living well even though they aren’t paying for premium product. There is a great deal to learn from its operations and management. The company’s goals have been incorporated into the product design process that IKEA uses. Key Terms: • Triple bottom line – A business strategy that includes social, economic and environmental criteria. IKEA is an example of a company that judges itself by the triple bottom line. While it strives to do good business, it includes a business and operating model designed to minimize the impacts on the environment. The company markets its philosophy...
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...Project Management Case Studies: Ikea And Timbuk2 Project Management Case Studies: IKEA and Timbuk2 Table of Contents Case I: IKEA Design and Pricing 3 Case Summary: 3 Key Terms: 3 Case Questions 5 Conclusions 9 Case II: The Tao of Timbuk2 9 Case Summary: 9 Key Terms: 10 Questions: 11 Conclusions: 15 Bibliography 16 Case I: IKEA Design and Pricing Case Summary: IKEA is a Swedish retailer that dominates the home market in 32 countries and is currently expanding in the United States. The success of the company is providing low cost products that include function, modern design, environmental considerations and healthy manufacturing conditions. IKEA designs its products, manufacturing, and distribution systems with the target price in mind. IKEA’s processes and corporate mantras feel unique and cheerful. Both customers and employees count on the company to operate responsibly. IKEA makes customers feel like they are living well even though they aren’t paying for premium product. There is a great deal to learn from its operations and management. The company’s goals have been incorporated into the product design process that IKEA uses. Key Terms: • Triple bottom line – A business strategy that includes social, economic and environmental criteria. IKEA is an example of a company that judges itself by the triple bottom line. While it strives to do good business, it includes a business and operating model designed to minimize the...
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