Consider the 2 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 bag sourced in China?
For the custom bag produced in San Francisco – certainly quality is a competitive dimension. They have a great reputation for both design quality and process quality. The bags are custom designed with input from the customer, assembled and sewn in San Francisco and offer outstanding durability. The durability is an integral part of the marketing and the bag is said to outlast jobs and even relationships. They also pride themselves on their delivery speed. The bag is usually received
…show more content…
The skill of the workers would be different in that in the San Francisco shop it appears that the workers would be more cross functionally trained to do full assembly, where in China with the addition of the automation through equipment, the skill set would be more individual machine operation driven. Due to the high level of customization from the San Francisco shop, I would say there raw materials inventory would be huge, because they have to be instantly prepared to put together any configuration of bag while their finished goods inventory should be relatively nil. China on the other hand, would be more efficient with raw goods inventory as they are producing specific bags and could have a large safety buffer of finished goods inventory so that they could try to retain some of the competitive dimension of delivery speed and reliability. Having the finished product ready to ship would offset some of the delay of transportation from China.
Draw 2 diagrams, one depicting the supply chain for those products sourced in China and the other depicting the bags produced in San Francisco. Show all the major steps, including raw material, manufacturing, finished goods, distribution inventory, and transportation. Other than manufacturing cost, what other costs should Timbuk2 consider when making the sourcing decision?