Kia Motors America automates its parts distribution with Kewill's Clippership
More than 700,000 Kia automobiles travel U.S. roads. If one of them breaks down, getting replacement parts to the dealer as quickly as possible becomes Kia Motors America's most important job. About five years ago, Kia decided to automate shipping at its parts distribution centers in Atlanta, Allentown, Pa., Chino, Calif., and Chicago to get cars back on the road as soon as possible.
In the past, the parts distribution centers had many different shipping systems and shipping operators had to learn how to use all of them. When the center shipped an order, the accompanying paperwork would go to the front office where a staff member would manually post the order and bill the customer for the parts. The company wanted to eliminate this double handling of paperwork by standardizing on one system.
"As car sales grew, the company needed to streamline its shipping systems to keep up with the demand for parts," said Derald McDonald, national manager of parts distribution center operations for Kia Motors America. This was a tall order considering the high order volume at Kia's four distribution centers. Kia's Atlanta parts distribution center, with the largest volume of the four, ships as many as 700 orders a day and works with 205 dealers in its region. The other centers average 300-500 shipments a day, with about 65 to 100 of those being truck shipments.
Kia standardized its shipping with Kewill's Clippership application, which automatically selects carriers that can deliver the product as Kia has committed, compares shipping rates and automates the shipping process. It takes two people about five hours per day to run the shipping operations at each center. The Kewill system's ability to interface with the company's central operating system allows Kia to post and invoice orders automatically. The system's ability to rate shop and find the most economical way to ship each order saves $1,000 to $2,000 a day, according to McDonald. Kia's initial return on investment study done on the shipping systems installed at all four parts centers indicated Clippership paid for itself within six months.
Kia chose Kewill for its reputation and helpfulness during the selection process. "Our IT people were impressed with them and their willingness to customize the software system for us," said McDonald "They could give us the product we wanted. They didn't try to sell us an off-the-shelf package."
Automatic rate comparisons save time as well as money
Clippership is a Windows-based shipping application that allows companies to create an integrated system that is easy-to-use,
efficient and flexible. Kia uses Clippership to automate its small parcel shipping through FedEx and its larger shipments through
freight carriers. These less-than-truckload (LTL) carriers often have a minimum charge for a shipment, depending on its destination.
This can complicate comparing FedEx and LTL rates. Clippership automatically compares the rates for a specific shipment
between FedEx and the trucking carriers and gives the operator the least expensive rate within a few seconds.
When Kia ships an order through Clippership, the order's information goes into a holding bucket. Several times a day Kia's AS400 system sweeps the system and automatically posts and invoices each order. Because the shipping information is relayed almost immediately to Kia's central Dealer Communication System, any of Kia's 615 U.S. dealers can immediately access information about the timing of their order. Service personnel at dealerships can see an order's shipping information and get its carrier and tracking number, greatly reducing the number of calls to the parts distribution centers.
The Kewill system has also simplified shipping of hazardous materials which some auto parts contain. Appropriate documentation for the material's safe handling must accompany these shipments. Clippership automatically attaches the information to an order and downloads it into the shipping carrier's system when someone scans the barcode of a package containing hazardous material. Clippership has also virtually eliminated misshipments because this same barcode communicates the shipment's destination, leaving no chance for manual address errors.
Since implementing Kewill, Kia has come to appreciate the vast amount of shipping information the system contains. "We can run various reports daily and monthly, and can track costs to the penny," said McDonald who finds this information invaluable as a manager. The system is so easy to use training is not a serious issue.
"The operator doesn't have to think about how to ship or which carrier to use," he said. "We don't ship any other way. Everything goes through Clippership and it gives us a complete record of our shipping."
Kewill Staff Writer