Jim Macklin is chief executive officer of Red Cliff Machinery, Inc. The company adopted a JIT operating environment five years ago. Since then, each segment of the company has been converted, and a complete computer-integrated manufacturing system operates in all parts of the company’s five plants. Processing of Red Cliff Machinery’s products now averages less than four days once the materials have been put into production. Macklin is worried about customer satisfaction and has asked you, as the controller, for some advice and help. He has also asked the Marketing Department to perform a quick survey of customers to determine weak areas in customer relations. Here is a summary of four customers’ replies:

Customer A Customer for five years; waits an average of six weeks for delivery; located 1,200 miles from plant; returns an average of 3 percent of products; receives 90 percent on-time deliveries; never hears from salesperson after placing order; likes quality or would go with competitor.

Customer B Customer for seven years; waits an average of five weeks for delivery; orders usually sit in backlog for at least three weeks; located 50 miles from plant; returns about 5 percent of products; receives 95 percent on-time deliveries; has great rapport with salesperson; salesperson is why this customer is loyal.

Customer C Customer for twelve years; waits an average of seven weeks for delivery; located 1,500 miles from plant; returns about 4 percent of products; receives 92 percent on-time deliveries; salesperson is available but of little help in getting faster delivery; customer is thinking about dealing with another source for its product needs.

Customer D Customer for fifteen years; very pleased with company’s product; waits almost five weeks for delivery; located 120 miles from plant; returns only 2 percent of goods received; rapport with salesperson is very good; follow-up service of salesperson is excellent; would like delivery cycle time reduced to equal that of competitors; usually deals with three-week backlog.

1. Identify the areas of concern, and give at least three examples of reports that will help managers improve the company’s response to customer needs.

2. Assume that you are asked to write a report that will provide information about customer satisfaction. In preparation for writing the report, answer the following questions:

a. What kinds of information do you need to prepare this report?

b. Why is this information relevant?

c. Where would you find this information (i.e., what sources would you use)?

d. When would you want to obtain this information?