Hepworth Communications produces cell phones. One of the four main electronic components is produced in-house. The other three components are purchased from external suppliers. Electronic components and other parts are assembled (by the Assembly Department) and then tested (by the Testing Department). Any unit that fails the test is sent to the Rework Department where the unit is disassembled and the failed component is replaced. Data from the Testing Department reveals that the internally produced component (made by the Components Department) is the most frequent cause of product failure. One in 50 phones fails due to a defective component produced in-house.

Barry Norton is the manager of the Components Department. In a recent performance evaluation, the plant manager told Barry that he needed to be more sensitive to the needs of the department's customers. This charge somewhat disconcerted Barry; After all, the component is not sold to anyone, but is used to produce the plant's cell phones.

Required:

1. Who are Barry's clients?

2. Explain the position of the plant manager to Barry to make him more sensitive to his customers. Also explain how this increased sensitivity could improve the company's time-based competitive ability.

3. What role would cost management play in helping Barry be more responsive to its customers?