Running head: UNIT I CASE STUDY

Unit I Case Study Columbia Southern University

UNIT I CASE STUDY Timbuk is San !ran"is"o#based manu$a"turing "om%any &kno'n $or %rodu"ing high#

(uality "ustom and "lassi" messenger bags dire"t to "ustomer order) *+a"obs , Chase- ./.- %g0 1230 The key "om%etitive dimensions that are driving sales o$ the "ustom messenger bag are its kno'n su%erb durability and %er"eived a$$ordability0 This mi4 o$ (uality and e"onomi" "onvenien"e stimulate sales be"ause the mi4 %rovides "ustomers 'ith an o%%ortunity to %ur"hase durable- "ustomi5able messenger bags at a %ri"e they "an a$$ord0 The "om%etitive %riorities $or the ne' la%to% bags to be sour"ed in China are not at all di$$erent $rom that o$ the "ustom messenger bags %rodu"ed lo"ally in San !ran"is"o0 The %rimary ob6e"tive is still to %rovide the &best %ossible $eatures- (uality- and value at reasonable %ri"es) *+a"obs , Chase- ./.- %g0 173 that has $ostered su"h a strong "ustomer $ollo'ing0 8oving the %rodu"tion o$ the ne' la%to% bags to China ensures that Timbuk "an "ontinue to %rovide su"h a %rodu"t- as this move kee%s "osts lo' 'ithout "om%romising the (uality o$ the %rodu"t or the standards o$ the "om%any0 The volume or rate o$ %rodu"tion o$ the assembly line in China "om%ared to that in San !ran"is"o should be virtually the same- as the method o$ ho' the %rodu"ts are being assembled is not "hanging9 there$ore- im%lementing ne' designs should not have a ma6or im%a"t on the overall %rodu"tion rate o$ the "om%any- 'hether in China or San !ran"is"o0 The di$$eren"esho'ever- may lie in the a"tual %rodu"tion rate o$ ea"h $a"ility0 :ith the di$$erent design s%e"i$i"ations o$ ea"h ty%e o$ bag- ea"h $a"ility may have a di$$erent %rodu"tion rate- but the overall volume o$ 'hi"h ea"h $a"ility is "a%able should not "hange0 The re(uired skill o$ the 'orkers 'ill vary $rom $a"ility to $a"ility *+a"obs , Chase./.- %g0 173- es%e"ially "onsidering the design "om%le4ities asso"iated 'ith the ne' la%to% bag

UNIT I CASE STUDY to be manu$a"tured in China9 ho'ever- the level o$ skill needed to assemble either %rodu"t 'ill share similarities0 An assembly line 'orker in China may have a di$$erent set o$ skills "om%ared to an assembly line 'orker in San !ran"is"o be"ause o$ the di$$eren"es in the %rodu"ts- but ea"h

assembly line 'orker 'ill re(uire a "ertain level o$ skill to %er$orm the tasks at hand- making the skill levels o$ ea"h 'orker- as related to their res%e"tive duties- similar0 The level o$ automation and the amount o$ ra' materials and $inished goods inventory may be 'here the $a"ilities di$$er most0 The "om%le4 design o$ the ne' la%to% bag re(uires &a variety o$ very e4%ensive ma"hines to %rodu"e) *+a"obs , Chase- ./.- %g0 1730 The ma"hines needed to %rodu"e the ne' la%to% bags in China 'ill di$$er $rom the ma"hines "urrently in used to %rodu"e the "ustomi5able messenger bags in San !ran"is"o0 :hile both $a"ilities 'ill have ra' materials on hand- the amount o$ ra' materials and $inished goods inventory 'ill di$$er0 The ra' materials 'ill vary $rom %lant to %lant due to the di$$eren"es bet'een %rodu"ts- as the materials needs to %rodu"e the "ustomi5able messenger bag 'ill not bear as mu"h resemblan"e to the materials needed to %rodu"e the ne' la%to% bags0 Sin"e the "ustomi5able bags are shi%%ed dire"tly to the "ustomer- the $inished goods inventory 'ill be signi$i"antly less than that o$ the non#"ustomi5able bags0 I$ the la%to% bags are %rodu"ed a""ording to standard design- as o%%osed to the "ustomi5able messenger bags- the manu$a"turing %lant in China stands to have more $inished %rodu"t inventory on hand than the manu$a"turing %lant in San !ran"is"o and vi"e versa0 The su%%ly "hain $or the %rodu"ts sour"ed in China begins 'ith ra' materials arriving at the %lant $rom the Timbuk %lant in San !ran"is"o and then being manu$a"tured a""ording to the design s%e"i$i"ations- and the $inished goods are then sent ba"k to the San !ran"is"o %lant until

UNIT I CASE STUDY

ordered by "ustomers- unless Timbuk shi%s dire"tly $rom the China $a"ility- "ausing the $inished goods to be held as distribution inventory until the time it 'ill be shi%%ed to the "ustomer0 The su%%ly "hain $or the bags %rodu"ed in San !ran"is"o begins 'ith the %lant re"eiving ra' materials $rom the su%%lier0 As orders are re"eived- the bags are assembled a""ording to the &"on$iguration- si5e- "olor- %o"ket- and stra% o%tions) *+a"obs , Chase- ./.- %g0 123 "hosen by the "ustomer and shi%%ed dire"tly to the "ustomer- via overnight delivery *+a"obs , Chase./.30 ;ther than manu$a"turing "osts- Timbuk should "onsider the trans%ortation "osts asso"iated 'ith sour"ing to China0 8aterials have to be shi%%ed to the %lant to be assembled and shi%%ed ba"k on"e $inished0 I$ %rodu"ts are shi%%ed to "ustomers $rom the China $a"ilitytrans%ortation "osts 'ould see another in"rease- as shi%%ing "osts $rom China may be signi$i"antly more than shi%%ing lo"ally $rom the San !ran"is"o $a"ility0

UNIT I CASE STUDY Re$eren"e

+a"obs- !0 R0- , Chase- R0 <0 * ./.30 Operations and supply chain management */1th ed030 Ne' York- NY: 8"=ra'#>ill0