San Francisco's bicycle couriers.

It all started in 1989 with one product: a custom messenger bag designed for San Francisco's bicycle couriers. That unique carrier became popular with not just cyclists, but also students and professionals who loved its stylish yet durable features. Today Timbuk2 manufactures 30 products, including messenger bags, computer cases, totes, duffles, iPod sleeves, and yoga bags that generate more than $10 million in annual revenues. Loyal customers buy Timbuk2 cases at REI, EMS, Apple, and 1,200 independent specialty retail stores. The messenger bags cost from $60 to $90, depending on size; for $10 more, customers can select custom color combinations.

Although other companies have shifted production to low-cost manufacturing centers overseas, Timbuk2 still produces its messenger bags at its original San Francisco factory. To preserve its local presence and retain jobs while maintaining a financially sound company, Timbuk2 took steps to boost the plant's productivity. Originally Timbuk2 made its bags "on demand" as customer orders came in. Converting to predetermined color combinations allowed the factory to operate independent of demand and to build inventory, greatly improving productivity. "That change alone saved our San Francisco factory from going out of business," says Mark Dwight, Timbuk2's president and chief executive officer. "There is value in the made-in-USA products, and locally produced bags can be customized to customer requests on a very short lead time. That quick response is a unique advantage."