... Each record should start with the Item Number record, with a separate line for each Customer No. & summary line (line with '*********' in it.
You need to change your current DETAIL template to an APPEND template and your APPEND template for the lines with the ********** records to the DETAIL template.
That looks like it should work although I don't have a running 5.02 system at the moment with which to check it.
You can then make the table order to be as you need it by moving the field columns as required and sorting on the Item Number (Part Number?) and Customer columns.
To get the output to be in Item Number order in column 1, but with the number displayed on one line only, you will need to create a Summary with Item Number as the first key and then 'suppress duplicates' for that column.
Add the other columns for the output in the order of precedence for the output format you require and that should be job done.
Or you could take the summary analysis potential further by making the relevant numeric field values in the summary and using the drill up/down facilities.