ZIFFPAGE TITLEConsolidating Complaints

By Mel Duvall  |  Posted 2005-06-10 Email Print this article Print

The automaker faced a U.S. government deadline to put in a defect-reporting system. What it got: Cars with fewer glitches.

Consolidating Complaints

Consumer affairs presented a particular challenge for Infogain. Customer service agents answer consumer concerns or complaints received by phone, e-mail or postal mail. When a complaint is received, a case is opened, recorded and managed through the company's Clarify reporting system. Under the new federal requirement, each complaint would also have to be reviewed to see if it had to be reported to the NHTSA. This threatened to essentially double the agent's workload, according to Michelle Cameron, Kia's national consumer affairs manager.

Instead, Infogain created an engine that could search through reports each time a case is created or updated in Clarify to look for keywords that might require further investigation and reporting.

For example, anytime a customer uses words such as "fire," "burn," "spark," "combustion" or "smolder," the software prompts the agent to check on whether a report needs to be made; if so, the application assists in submitting the report. Some human vetting is still required. A customer may have simply registered his dissatisfaction with a salesperson, saying Kia should "fire" that person. In this case, the company may want to investigate the matter, but a TREAD report is not required.

Cameron says the company has about 50 employees at its main call center in Irvine, Calif., and at regional offices. With the automated reporting software, Kia was able to meet its reporting requirements without adding staff.

Once pulled into the SQL database, the information can be sliced and diced using Crystal Analysis data mining software. (Business Objects acquired the software in 2003 with its acquisition of Crystal Decisions.) Infogain created a series of automated reports to look for events such as sudden increases in parts orders, spikes in warranty claims related to a particular vehicle model, or a rise in accidents that result in death or serious injuries. The results are displayed on an early warning dashboard.

Managers can drill down into individual items, such as steering assemblies, to find out how many warranty claims were made, how many parts were sold and how many complaints were received.

For the first time, Lease says, managers are able to look across departments by daily, weekly or quarterly reporting periods, and by specific car models, model years and components.

While the system has only been live for a little more than a year, the company has already gained insights it can put to use. A key finding: Parts sales are a critical leading indicator of defects.

Typically, when a Kia owner has a problem, he takes the vehicle to a dealership for repairs. The dealership orders the necessary parts and, hopefully, the problem is fixed. At the end of the month, the dealership sends in its warranty claims. If the Kia owner's problem has not been solved, the owner will usually return to the dealership to have the vehicle looked at again, and perhaps make a third visit if the problem persists. After that, the owner will likely call or contact Cameron's office to register a complaint.

Parts sales are the first indicator of a defect, warranty claims the second, and consumer complaints the lagging but most damaging indicator. Defect early warning parameters are set by individual department managers based on historical averages. If, for instance, Kia normally receives 2,000 parts orders a month for brakes, an alert can be triggered if incoming orders are 15% greater than the monthly average. Similar parameters can be set for warranty claims; Kia processes about 120,000 a month.

But looking at parts sales doesn't always provide the correct answer. A sudden increase in brake pad orders indicates there is a problem with a particular pad. Normally, Kia would contact its supplier and instruct it to fix the problem, or find a new supplier. By looking at warranty claims, however, Kia might discover that brake pads were being ordered only for four-wheel-drive versions of one of its vehicles, and not for the two-wheel-drive models. The problem, in that case, might be excessive vibration caused by the design of the vehicle, not the brake pads.

That's why, Lease says, having the complete picture is important.

While it is still digesting the information that can be gained from this system, Lease says that Kia can now begin to perform detailed return-on-investment calculations. What percentage of its vehicles is likely to be affected by a problem such as battery defects in extreme heat? Should all vehicles be recalled to fix the problem, or can efforts be limited to Southern states? Battery connectors are just one of an average of 60,000 parts in a vehicle; by using such hard dollar calculations, Kia can calculate potential liabilities and also prioritize fixes and recalls.

Kia declined to disclose the cost of the Infogain system. However, Lease says the company's two initial goals—meeting the TREAD deadline, and limiting the need to hire more agents to handle customer complaints—have been met.

The larger goal of increasing vehicle quality also appears to be on track. In its latest initial-quality rankings, released May 18, J.D. Power said Kia improved its performance from 1.53 problems per vehicle for the 2004 model year to 1.40 problems per vehicle for the 2005 model year. The Kia Spectra finished second for quality in the compact-car category, behind the Toyota Prius and ahead of the Honda Civic and Toyota Corolla, which tied for third.

Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.


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