The company is the leading Korean automaker. It is multinational that is made up of 18 international subsidiaries and a distribution network that is made up of about 4000 dealers located in 172 countries. They have a combined volume of 1.5 million vehicles (Slack, 2016). The company’s distribution, sales, and marketing agency in the US is the Kia Motors America (KMA). KMA offers a complete line that is made up of more than 700 dealers in the country. The 776 dealers are located in the continental US as well as Hawaii and Alaska. The logistics and distribution team focuses on ensuring the cars to various dealers as cost-efficiently and quickly as possible. However, they face the challenge of orderable configurations. Kia has a manufacturing plant in Georgia that receives imports from Korea as well as the new manufacturing plant in Mexico.
KMA has a weekly allocation procedure, and they rely on the company’s field offices to receive feedback from all the dealers. NADA recently conducted a survey and discovered that the Kia distribution network is one of the best allocation and distribution networks in the industry as voted by dealers. The 776 dealers act as the company’s customers. Nevertheless, working with many dealers can be quite challenging because there are different types of dealers. Some of the dealers are lone operators while others may have multiple dealerships in their business (Slack, 2016). Kia ensures that the ordering and allocation systems will ensure that all the delivery systems are seamless. Furthermore, the company works with Hyundai Glovis as their 3 rd party logistic provider. Hyundai Glovis has no direct relationship with port processing, railroads, and carriers companies. KMA works with its parent company in Korea to assist in defining objectives and goals that are later broken down by product type and supply location.
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All the distribution information is offered to Glovis so that they can plan their requirements and businesses. The information is broken down according to ports. There are two ocean ports located on the East Coast, three ocean port situated on the West Coast, and an inland port located in Texas. The plant in Georgia ships via truck and rail while the products are shipped by short sea and rail from Mexico. The production plans are given to Glovis according to port location, and they determine the various requirement capacities for transport, rail, and space (Slack, 2016). Glovis also offers advice to the port, carrier, and rail vendors on the products they will be receiving or dispatching. Giving information to Glovis is often the starting point, but the plans are dynamic according to the season. The business flows according to the sales, Kia may adjust their production plans while keeping constant communication with Glovis on the various changes.
There are various factors that cause the distribution channels to be adjusted. Some of the issues include port congestion, weather, railroad or trucking problems, and storage situations. Allocation and production may be simple, but the daily running of the distribution and supply channels may be quite challenging. Products originating from Korea come by the ocean while the products from the Georgia plant are distributed by truck and rail. Supplies from the Mexico plant is different because of the strict US border crossing. Kia Motors Mexico and Glovis have had to adjust and integrate their systems to accommodate the border crossing (Slack, 2016). The documentation at the border crossing should be timely and comply with the US Customs Department, or it may result in additional costs and shipping delays. However, the Mexico plant is located close to the border to reduce transport cost while ensuring the accuracy and timeliness of documentation.
Slack, E. (2016). Kia Motors America. Supply Chain World. http://www.scw-mag.com/sections/manufacturing-distribution/773-kia-motors-america