ADT Forms Strategic Fleet Partnerships
Through working with ADT, GE Capital Fleet Services performed significant benchmarking and discussed where it was focused as a business and the capabilities it has as a company.
At a Glance
Through a strategic partnership with its fleet management company, ADT was able to:
- Save more than $6 million per year in operating costs.
- Reduce preventable accidents by 20 percent.
- Increase driver productivity.
Every day, ADT’s 7,000-plus technicians respond to thousands of customer calls and conduct in-person visits to homes and businesses. Faced with volatile fuel prices and aging service vans, the security services provider was looking to replace its fleet. It turned to GE Capital Fleet Services, its fleet management company (FMC) of more than 10 years, to help determine ways to reduce costs and CO2 emissions, and provide technicians with vehicles that would enable them to effectively service its 6 million customers.
ADT’s fleet consists of approximately 7,000 vehicles throughout the U.S. and Canada, with roughly 85 percent being light-duty trucks and 15 percent full-size vans. The company also has about 200 sedans in its patrol fleet.
In 2008, ADT collaborated with its FMC to create a multi-year transformational plan to change the composition of ADT’s overall fleet profile to include vehicle mix and size, carbon footprint impact, overall vehicle tracking and management, and an increased focus on driver safety.
“This event really changed the relationship between ADT and GE Capital Fleet Services from a transactional relationship to a more collaborative, strategic relationship based on a multi-year horizon,” commented David Wade, group director for supply chain for ADT North America.
Wade has worked for ADT for the past 17 years, holding positions in sales, sales management, national account management, general management, and program management. He took over supply chain and fleet in 2008. In 2011, the company consolidated its fleet with SimplexGrinnell and hired a full-time fleet leader.
Re-‘Connect’ with Fleet Needs
Starting in 2008, when Wade became involved in fleet, ADT challenged its suppliers to focus more on strategy and solution delivery, as opposed to the daily activities of keeping the business running, or as Wade characterized it, a “just keeping the lights on” mentality.
In late 2008/early 2009, ADT and its FMC partner held a series of joint meetings and came up with a multi-year transformational plan that focused on changing the security service provider’s fleet profile.
During this process, GE Capital Fleet Services looked at what was happening in the macroeconomic and automotive fleet environment, and translated how those factors would impact a fleet.
“Through working with ADT, we did some significant benchmarking and talked about where it was focused as a business and the capabilities it has as a company,” said Mark Smith, strategic consulting leader for GE Capital Fleet Services. “We looked at historical, financial, and fleet performance information, and used all of those items in conjunction with one another to identify areas of opportunity to make material changes to the way things had been done.”
At the beginning of the process, ADT operated about 98 percent of its fleet as full-size vans. “We never endeavored to change this because that product had been institutionalized at ADT for 50 to 60 years,” Wade said.
That’s where the partnership with GE came in. Today, ADT operates approximately 4,100 Ford Transit Connects. One benefit of the new, smaller vehicles is the increased ease of working in urban areas.
“Driver feedback was paramount in hitting change management head on,” Wade said. “What we heard and continue to hear from drivers is that they feel more comfortable and confident in a smaller van in highly congested areas. The vehicles are less of a nuisance, easier to parallel park, and easier to enter into parking garages. Overall visibility has been significant as well, compared to the full-size vans used previously.”
The company was looking to not only reduce fuel costs, but reduce its carbon footprint and overall environmental impact as well.
“We also wanted to focus on vehicle tracking and management to increase driver safety,” Wade said. “So, I would say the meetings in 2008 really led to the great benefits we’ve been seeing and continue to see.”
These benefits include savings of more than $6 million per year in operating costs as a result of the deployment of new, more fuel-efficient vehicles; expected reduction of carbon emissions by 40 percent (or 20,000 metric tons); and a 20-percent reduction in preventable accidents.
You can watch a video of ADT drivers discussing the new vans here:
Managing Driver Information
In addition to rightsizing its fleet vehicles, ADT also took on a telematics solution. This portion of the transformational plan has resulted in increased driver productivity and the ability to further limit after-hours or unauthorized vehicle use.
Some of the challenges ADT faced instituting its telematics program were simply justifying the deployment of the new technology on a fleet of 7,000 vehicles, creating an overarching strategy around workforce assimilation and management, and controlling and managing the new information that the technology makes available.
To overcome its challenges, the company “took a collaborative approach with all key stakeholders in the company, and conducted a series of planning meetings on how to best adopt and implement the technology, knowing there was a significant ‘change management challenge’ facing this deployment,” Wade noted. “We had more than 50 leaders across HR, finance, operations, operational excellence, customer experience, fleet, and strategic consulting that were instrumental in laying out the roadmap for this technology.”
According to Smith, one of the critical elements to the success of these types of partnerships is “the strong working relationship where you become a combined team, with representatives from both companies that have different functions. It can’t be the traditional supplier/vendor relationship, because these initiatives take a tremendous amount of involvement.”
Fleet Goes ‘Prime Time’
With a humorous yet informational vibe, ADT and GE Capital Fleet Services partnered to create history: fleet and a fleet management company featured on national prime time television.
In a brief, 30-second commercial that ran on major network and cable channels, President John Koch of ADT walked viewers through a day with ADT drivers, explaining what the company does and how it worked with GE to install telematics and rightsize its fleet to Ford Transit Connects.
“This ad is about more than just fleet management. It’s about GE’s commitment to building and supporting the growth of our customers by going farther and doing more than what the relationship requires,” said Mark Smith, strategic consulting services leader for GE Capital Fleet Services.