Case Study

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Case Study

Chapter 11: INTERSTATE HYDRAULIC MANUFACTURING CO.

Interstate Hydraulic Manufacturing Co. is an established, family-owned manufacturer of hydraulic devices used in automobile suspensions and forklift trucks. From the factory in Muncie, Indiana, products are shipped to customers worldwide. All data processing is performed by a minicomputer, which handles payroll, billing, accounts receivable, inventory, and cost accounting. Workers clock on and off the job using time clocks, and they report job progress by filling out a forms packet that accompanies each job lot. Data from the time cards and forms packets is keyed into the computer by data entry operators in the manufacturing division, who use terminals.

Ben Lambert is in charge of customer service, handling complaints, conducting plant tours, and providing information to the plant manager on product performance. One day Lambert is sitting at his desk, handling the backlog of correspondence he has accumulated. He picks up his office recorder and dictates the following letter: Ms. Ellie Nostrom

Purchasing Director
McCullin Enterprises

Thank you very much for being so understanding last week when you called to inquire about your order. As I explained, we have a large number of jobs in process at any one time, and many more waiting in line. It is simply impossible to locate where one is without spending considerable time looking through our records. I'm sure you can understand. I later learned that your order was held up due to lack of materials. We have been having difficulty obtaining the nylon bushing that attaches the actuating arm to the housing. We have had only one supplier that could meet our high quality standards, and we have recently learned that its factory has been on strike for almost half a year. We finally located another supplier in California and placed an order with it. But when the bushings arrived, the receiving report was misfiled, and we didn'l know that they were...
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