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.
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.
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."[PAGEBREAK]Recent Fleet Initiatives Focus on Leaner Operations
Over the past 18 months, ADP has taken a strong global approach to the fleet and, as a result, the company has successfully implemented several key initiatives involving its lessor programs, insurance policies, greenhouse gas (GHG) emissions, motor vehicle record (MVR) checks, and replacement policy.
Recent global rationalization efforts have resulted in reducing ADP’s global preferred lessor base from over 25 to five: four in Europe and one in North America. These efforts have allowed the company to implement a unified insurance policy that currently has over 82 percent penetration and has reduced premium costs by more than $390,000. More vehicles will follow as leases expire.
ADP's focus on the environment has led to initiatives that have reduced its GHG emissions by more than 11 percent in two years with a fleet-wide average in Europe of under 128 g/km, along with a corresponding reduction in fuel costs. In North America, this initiative manifested itself by early cycling of older vehicles.
"ADP has reduced its CO2 output by more than 400 metric tons since 2011," Bieger said. "This emissions initiative was undertaken for both environmental reasons and for cost reductions in the form of taxation burdens (outside North America currently) and operational fuel savings."
Another change during the past two years included completing a replacement initiative in North America that successfully replaced 88 percent of older vehicles with newer, more fuel-efficient vehicles — with 54 percent replacement in 2013 alone. These changes saw older vehicles with 23 mpg combined being switched out for newer vehicles with a combined EPA mileage of higher than 29 mpg, a 26-percent increase that is expected to save more than $400,000 a year in fuel alone (at current prices).
Finally, the fleet team assumed responsibility for annual MVR checks for personal car drivers, as well as fleet drivers.
"ADP Fleet is working to create a true global reach that seeks to harmonize and standardize service, policies, and practices where it makes sense,” Bieger stated. “And when individual country laws and practices demand, to benchmark with the best in the industry to develop and implement policies and practices that improve service and reduce costs."
ADP Fleet’s Perspective on Green Initiatives & Technology
The ADP fleet team believes that any initiative, whether it falls under sustainability or some other category, needs to be evaluated on its merits, from both a cost and a productivity standpoint, as well as a sustainability perspective.
"When viewed holistically, sustainability is an integral piece of what some of our major clients expect, so being able to deliver on this front touches more than just the operating cost of the fleet; it also impacts our ability to compete in the marketplace,” Bieger said. “Trying to view this through the lens of only cost, which I believe short-changes the company, is too narrow a focus."
When it comes to any fleet initiative, including sustainable programs, Bieger believes the best way to get buy-in at all levels is to convince senior management of a program’s benefits.
"With any initiative that has the possibility of impacting the financials of fleet operations, not just sustainable initiatives, it is best to obtain senior leadership buy-in first," he explained. "However, sustainability is a part of the commitment to social responsibility, and support can be found."
In addition to consistently evaluating green programs, the team also regularly assesses technology options within the fleet. And, because the fleet team is a lean department, it depends heavily on its partners for innovative technological solutions.
"One of the most innovative pieces of our partnership with Wheels Inc., from a financial standpoint, would be the many interfaces developed to support our financial reporting and journal entry creation," Bieger noted. "These custom communications and reports support everything from general ledger reconciliation and reporting to associate payroll deductions."
And, according to Bieger, these basic, though complex, interfaces literally cut days every month from the team’s financial reporting responsibilities, allowing them to focus on more value-added support and service to the field.
Keeping Up with an Evolving Industry
Moving forward, Bieger plans to proactively investigate more efficient and streamlined ways of doing business for the ADP fleet in order to keep up with a constantly evolving industry.
"The industry changes rapidly, and in order to remain effective in this changing landscape, we, as fleet professionals, need to stay cognizant of the pressures shaping the industry so that we can effectively contain costs (always an upward pressure), improve service, and support our clients’ ever changing needs," Bieger concluded.
He also sees a strong future for the ADP fleet department, where its operation will play an even larger role in supporting ADP associates and their mobility needs.