Kia Case Study

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  • Published : December 20, 2010
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Gabriel Campozano
Xavier Alfaro
María Fernanda De La Rosa




1. Why was it so difficult for Kia to identify sources of defects in the cars it produced?

Kia had created a system which gives reports of any defect, accident or injuries involving its vehicle to the U.S. National Highway Traffic Safety Administration. The received information stored in at least seven different system run by Kia's warranty, parts, consumer and legal affairs departments. This fragmentation of information in different system prevented Kia to get a complete picture of defect. Kia could have created some software on the fly that merely pushed the required information out of these systems, but then the information would have to be collated manually. This solution would have been very time consuming

2. What was the business impact of Kia not having an information system to track defects? What other business processes besides manufacturing and production were affected?

Without a system for tracking and identifying defects, Kia did not know how serious its quality control problem was until customer complaints piled up. The high incidence of defects in Kia products affected marketplace perceptions of the Kia brand, customer retention rates, and Kia’s ability to continue ramping up sales. The quality problems affected its profitability.

3. How did Kia's new defect-reporting system improve the way it ran its business?

KIA uses information systems to help it identify sources of defects in cars so it can improve cars quality, reduce warranty repair costs, and increase customer satisfaction. The new systems not only assisted Kia in detecting quality problems, it also enabled them to increase profitability and even strategic advantage.

4. What management, organization, and technology issues did Kia have to address when it adopted its new quality control system? Kia...
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