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ADP LLC
Michael Bieger
Sr. Director Global Procurement
ADP and LEV’s in North America
or How North America went from Last to Last
(but a better last)
• ADP’s first account was in Paterson, New Jersey in 1949
• A comprehensive global provider of cloud-based Human Capital Management (HCM) solutions uniting HR, payroll, talent, time, tax, and benefit administration
• A leader in business outsourcing services, analytics and benefits administration
• 650,000 clients in more than 110 countries
• 2013 Fortune named ADP one of worlds most admired companies
Global fleet; 2009, the view at the beginning
• Known global spend in excess of $60MM annually
• 2 companies; ADP Inc., ADP Dealer Services
• 19 countries; 21 with Canada & US
• 34 makes
• 24 lessors
• 1,388 vehicles EU, 1,854 vehicles North America
• No standardized processes across the globe
• Lack of centralized oversight and direction
• Fix what no one wanted fixed
6
• Understand actual global exposure
• Unified approach to spend
• Consolidated data collection and reporting
• Actionable analysis to drive down costs
• One point of contact for global suppliers and local ADP operations (fleet) personnel
• Environmental oversight at global level
• Leverage (when needed) to drive change
• Coordinate unified ADP response to sales/supplier relationship
• Central control to manage unified approach to spend
Why fix fleet – what’s the benefit
• CO2 reduction
• Lessor consolidation
• Limit assoc. excess ability to contribute to cost of vehicle and options above their selector
• Limit vehicle choice – selectors
• Manufacturer consolidation
• Matrix-bidding
• Multi-bidding
• Pay as you go
• Unbundle insurance
• Unbundle service
• Use fleet management co
Prioritizing Action Items
• CO2 reduction – 2012 start date
• Lessor consolidation
• Limit assoc. excess ability to contribute to cost of vehicle and options above their selector
• Limit vehicle choice – selectors
• Manufacturer consolidation
• Matrix-bidding
• Multi-bidding
• Pay as you go
• Unbundle insurance
• Unbundle service
• Use fleet management co
Go Green or Bust
• Strong movement in control of EMEA fleet in 2012 led to first steps in emissions control
• Global mandate set at 140 g/km fleet average per country
100
120
140
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280
GBR ITA FRA BEL ESP NLD DEU POL CHE SWE CZE ROU USA
2012 Fleet Average CO2 per Country
YE 2012 YE 2013 YE 2014 YE 2015 Ye 2016
100
120
140
160
180
200
220
240
260
280
GBR ITA FRA BEL ESP NLD DEU POL CHE SWE CZE ROU USA
2012 Fleet Average CO2 per Country
YE 2012 YE 2013 YE 2014 YE 2015 Ye 2016
at 258 g/km -we were winning!
Acquisition / Sale Depreciation and Interest
Maintenance Fuel / Battery
Operating Cost Drivers
Cost Drivers Examined
Hybrid optionHigher trim levelsTaxes/tax breaks/registrationOEM DiscountsCurrent fuel pricesMarket demand
Two powertrainsHigher trim levelsRepair expertise Dealer vs. corner shop
Fuel price fluctuationHigh=good / Low=bad
Battery costs / lifecycle
Greater carrying costAdjusted lifecycle
Higher and longer interest payments
Cost Driver Results
15,000
17,000
19,000
21,000
23,000
25,000
27,000
2010 2011 2012 2013 2014 2015 2016 2017
Average Capitalized Cost by Model Year
Eco-boost and mild hybrids
Full hybrid
Capitalized Cost
• Hybrid only on more expensive models and higher trim levels
• Lower OEM discount structure due to hybrid being loss leaders
• Battery cost and 2nd powertrain increase vehicle costs
• Global mandate set at 140 g/km fleet average per country – hybrids needed to meet goal
Cost Driver Results (cont.)
Vehicle Operating Cost
• Monthly operating cost 2012-2017:
• Total - $839/mo. to $724/mo.
• Fuel - $302/mo. to $118/mo.
• Lease - $343/mo. to $395/mo.
343 281 396 396 374 395
302 288 252 162 124 118
-
100
200
300
400
500
600
700
800
900
1,000
2012 2013 2014 2015 2016 2017
Total Monthly Operating Cost per Car
Depreciation Funding & Management Fees Registration & Tax
Fuel Collision & Safety Maintenance, Tires & Rental
51.65
(2.78)
6.45
(183.71)
4.26 9.68
(114.46)
$(220)
$(170)
$(120)
$(70)
$(20)
$30
$80
Depreciation Funding &Management
Fees
Registration &Tax
Fuel Collision &Safety
Maintenance,Tires & Rental
Net
Cost Variance by Category 2012 to 2017 • Increased purchase price
• monthly lease cost
• license and title and tax
• Extended lifecycle to
• ameliorate increased lease
• control funding fees
• Reduction in monthly fuel
• More costly components
• increased cost of repair
• Increased cost of upkeep
Cost Driver Results (cont.)
CO2 Emission Results
100
120
140
160
180
200
220
240
260
280
GBR ITA FRA BEL ESP NLD DEU POL CHE SWE CZE ROU USA
2012 Fleet Average CO2 per Country
YE 2012 YE 2013 YE 2014 YE 2015 Ye 2016
100
120
140
160
180
200
220
240
260
280
GBR ITA FRA BEL ESP NLD DEU POL CHE SWE CZE ROU USA
Fleet Average CO2 per Country
YE 2012 YE 2013 YE 2014 YE 2015 Ye 2016
100
120
140
160
180
200
220
240
260
280
GBR ITA FRA BEL ESP NLD DEU POL CHE SWE CZE ROU USA
Fleet Average CO2 per Country
YE 2012 YE 2013 YE 2014 YE 2015 Ye 2016
100
120
140
160
180
200
220
240
260
280
GBR ITA FRA BEL ESP NLD DEU POL CHE SWE CZE ROU USA
Fleet Average CO2 per Country
YE 2012 YE 2013 YE 2014 YE 2015 Ye 2016
100
120
140
160
180
200
220
240
260
280
GBR ITA FRA BEL ESP NLD DEU POL CHE SWE CZE ROU USA
Fleet Average CO2 per Country
YE 2012 YE 2013 YE 2014 YE 2015 Ye 2016
Still Winning at 158 …
but we beat Romania!
• Expect to hit 140 g/km goal by end of fiscal 2017, June 30
Initiative Results
• Reduced fuel consumption and cost
• 47 gal’s/mo. reduction in fuel; from 93 to 46 gallons
• $1.35M fuel savings since program inception
• $90k savings from fuel price decrease last 3 years
• Reduced GHG footprint by 52%; from average of 23.5 mpg to 35.7 mpg
• Avoided 4,571 tons CO2 since 2013 start of initiative
• Embodies ADP culture of Social Responsibility
• Supports ADP sales efforts for the field
• Moved global goal to a maximum country average of 110 g/km
• Currently reviewing electric vehicles
