Managing the Financial Side of Commercial Fleets

ADP Looks to Save $400,000 Per Year After Moving to Fuel-Efficient Vehicles

September 2013, by Cheryl Knight - Also by this author

As one of the largest providers of business processing and cloud-based solutions, Automatic Data Processing, Inc. (ADP) provides human resources, payroll, benefits, and talent management to employers and automotive dealerships around the world. The organization’s primary objectives: to build configurable solutions that fit each organization’s unique goals and increase productivity.

Roseland, N.J.-based ADP serves about 600,000 organizations in more than 125 countries, including 425,000 small-business clients and 26,000 vehicle dealerships. More than 80 percent of Fortune 500 companies and more than 90 Fortune 100 companies use at least one of ADP's services.

Established in 1949, more than 57,000 employees work for the company worldwide, and its revenues exceeded $10 billion in fiscal year 2012.

Michael Bieger, senior director of global procurement for ADP (right) and Hugo Del Mar, senior director global procurement for ADP in Hungerford, United Kingdom, work together overseeing the company's fleet.
Photo Mark Ja Worski
Michael Bieger, senior director of global procurement for ADP (right) and Hugo Del Mar, senior director global procurement for ADP in Hungerford, United Kingdom, work together overseeing the company's fleet.Photo Mark Ja Worski

Integrating ADP's Corporate Mission Into Its Fleet

ADP's corporate mission to "power organizations with insightful solutions that drive business success" and its company values — integrity is everything, insightful expertise, service excellence, inspiring innovation, each person counts, results-driven, and social responsibility — highly influences its fleet and procurement team.

"At our core, we are a service organization with numerous and varied internal clients," said Michael Bieger, senior director – global procurement, ADP Inc. "Our job is to support them so that they can be successful in delivering results to our company and our shareholders."

A 16-year fleet veteran, Bieger considers his internal and external partnerships crucial to his department's success. Internally, he partners closely with senior management, ADP Risk Management, and ADP Credit Corp. Externally, he coordinates with lessors, manufacturers, and third-party providers to develop solutions that address both parties’ needs.

"Internally, we partner with diverse departments from finance, to risk management, to the analytic and lending arm of our treasury group," Bieger explained, pointing out that these relationships help reduce costs and standardize functions.

These partnerships have led to significant changes in operations, such as the introduction of a global insurance policy that removed the insurance from individual leases and a single global reporting platform that is paving the way to more transparent communications and better purchase agreements with global manufacturers.

In fact, as a global leader in business outsourcing solutions, ADP recognizes that creating partnerships with diverse suppliers is a major competitive advantage and a powerful business tool.

"ADP's supplier diversity mission is to build relationships with and purchase goods and services from certified diverse enterprises," Bieger pointed out.
The organization's supplier diversity program objectives include:

  • Actively seeking certified diverse suppliers.
  • Ensuring the inclusion of diverse suppliers as a part of the company's strategic sourcing and procurement process.
  • Communicating the value of supplier diversity both internally and externally to all stakeholders.
  • Leveraging supplier diversity results to meet ADP's client's supplier diversity requirements.

The company continues to measure its success based upon its ability to attain and exceed these objectives.

Both internal and external partnerships have led to significant changes in operations, such as the introduction of a global insurance policy that removed the insurance from individual leases and a single global reporting platform.
Photo Mark Ja Worski
Both internal and external partnerships have led to significant changes in operations, such as the introduction of a global insurance policy that removed the insurance from individual leases and a single global reporting platform.Photo Mark Ja Worski

Getting to Know the ADP Fleet & Its Structure

ADP operates a fleet of 1,669 vehicles in North America (including 15 gasoline-electric vehicles) and 1,496 vehicles in Europe (including 20 hybrids and one liquefied petroleum gas [LPG] vehicle).

The fleet team's mission includes providing the necessary mobility needed by associates to allow them to perform their specific jobs for ADP at an economical cost to the company.

"Our  biggest strength lies in our department's industry experience coupled with a keen curiosity for new and innovative solutions for the internal client," Bieger said. "The flexibility in our operations allows us to quickly react to market pressures and to amend operational practices to take advantage of these changes in the industry. Early turn of vehicles in the last 16 months would be an example of this."

Within North America, the majority of ADP's vehicles are used in support of sales efforts, while a small portion, approximately 300 vehicles, are used to support the company's Dealer Service business — primarily to implement/support the systems and equipment used for dealerships.

Additionally, the fleet team supports the mobility piece of an international associate's compensation package. Typically, this means providing a single vehicle to an associate to support a specific job function, position, or compensation package.

However, Bieger noted, "This one-size-fits-all solution is increasingly being challenged in the market globally and may someday not be tied to a specific vehicle solution but rather to a suite of mobility solutions."

Vehicle models differ by region, but globally the organization has vehicles from 38 nameplates. And, even with that diversity, only five manufacturer groups account for 78 percent of all the vehicles, and when including an additional three manufacturers, more than 95 percent of ADP's vehicles are represented. Efforts are underway to evaluate and understand this diversity.

In North America, vehicles are leased through Wheels Inc. and in Europe all vehicles leases are being moved to four preferred lessors: ALD, Athlon, GE, and LeasePlan.

The North America fleet team includes two analysts and one administrator who report to the senior director of Global Procurement. Additionally, there are multiple individual contributors/supporters in other countries supporting ADP global leet initiatives and direction.

"Senior management plays a vital role in the fleet, as they are the supporters and champions to the wider world of ADP leaders," Bieger stated. "We meet annually with the operational senior leadership and Finance as needed to prepare and present future budgets. Quarterly, we meet to keep all parties in sync with actual costs and future operating projections."

When assessing fleet financials, the team looks at three areas that they need to react to, control, or influence to maintain or reduce costs:

  • Market pressures and how the team can mitigate them.
  • New technologies available to support the fleet.
  • Driver-centric processes (idling, driving behavior, etc.).

"Our department has regular quarterly meetings with finance to review past-quarter performance and variance to budget," Bieger added. "We also discuss what we see as operational pressures that can impact future costs, and we assess strategies available to mitigate those pressures."

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