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Climate Change and the Environment

Case Study: Ford Fleet Purchase Planner

1. The Task

Scenario: Sam Smith is the Purchasing Manager for Green City, U.S.A.; she purchases about 100 new vehicles per year.

Her challenge is to help reduce the city’s overall fleet emissions. She doesn’t have the information she needs to assess the emissions of her current vehicle fleet and measure improvements over time. And, it’s complicated and time-consuming to weigh the relative benefits and costs of so many alternative fuel and powertrain technologies to decide which are best for her fleet’s drivers.

2. The Tools

Ford’s suite of fleet purchasing tools helps Sam make an informed and effective decision. She can calculate the carbon dioxide (CO2) footprint of her existing fleet, including factors like local fuel costs, electricity costs, electricity sources, miles driven and driving patterns. The tools can also show her the emissions and fuel cost reductions she would get from buying EcoBoost®-powered vehicles, hybrids, plug-in hybrids or battery electric vehicles, rather than just conventional internal combustion engine vehicles.

3. The Options

Ford’s Purchase Recommender gives Sam a range of vehicle purchase options. It makes a recommendation for the vehicle mix that will provide the greatest emissions reduction at the lowest cost. And, it makes additional recommendations for how she can lower her emissions even more, if she has a little flexibility with her budget.

4. The Results

Sam makes a proposal to her management about the best set of vehicles to buy. She explains the specific emission and fuel-cost benefits of different vehicle technologies. And, Sam knows the CO2 footprint of her existing fleet so she can accurately measure how much she would improve it with her proposal, and how much progress she can make toward the city’s sustainability goals.

The growth in eco-conscious vehicle options is great news for customers who want to reduce their environmental footprint and save money on fuel. However, all the new choices do make planning purchases more complicated. Customers now have to determine which vehicle technologies will have the greatest environmental and cost benefits for their specific driving needs. This is especially true for commercial and government fleet customers, who often buy large numbers of vehicles and have to meet a wide range of transportation requirements across a variety of different driving situations.

Researchers at Ford have developed a suite of tools, collectively called the Ford Fleet Purchase Planner™, to help fleet buyers weigh all their options. These tools help buyers choose the best vehicles from Ford’s lineup to manage their costs and reduce their company’s carbon footprint. Fleet customers work with their Ford account manager or a fleet analyst to use the Planner to build a custom fleet of Ford vehicles. Buyers are then able to change their hypothetical fleet until the vehicle mix meets their specific costs and environmental goals.

The Fleet Purchase Planner™ includes several tools. First, it offers an Emissions and Fuel Cost Calculator, which compares the CO2 emissions and fuel cost of two vehicles or vehicle technologies based on their fuel economy and customer-specific factors such as annual miles driven, city versus highway driving conditions and local fuel prices. The results help our customers understand the relative benefits of different technologies, such as an EcoBoost engine compared with a hybrid vehicle; different fuels, like gasoline versus compressed natural gas or diesel; and, for plug-in vehicles, different electricity carbon footprints in different regions of the country. For example, for customers deciding where to place battery electric vehicles in their fleets, the Calculator shows that the Focus Electric emits about 70 g CO2 equivalent/km using electricity from the low-carbon California grid but more than twice as much, about 150 g CO2 equivalent/km, in the more coal-intensive Southeast U.S.

But most fleets deal with hundreds or thousands of vehicles. Comparing all the available vehicle and technology replacement options for cost and sustainability across a fleet of many vehicles is a complex task. So, we developed additional tools to help fleets meet this challenge.

The Fleet CO2 Footprint Status Calculator helps fleets calculate the carbon footprint of their current fleet. Customers provide a list of the Vehicle Identification Numbers (VINs) for all the vehicles in their fleet, and can customize this carbon footprint by adding in specific details on the locations of their vehicles, alternative fuels used, annual mileage, driving patterns and other criteria. This tool also calculates the annual fuel cost for the whole fleet. The CO2 footprint and fuel cost become the baselines for evaluating the benefit of new vehicle purchases.

Finally, the Purchase Recommender helps fleet customers determine the right combination of replacement vehicles to meet their cost and environmental goals. Customers choose the type of cost they want to minimize: purchase price, purchase price plus fuel cost, or total cost of ownership. Then the Purchase Recommender calculates the exact combination of new vehicles they should buy to meet the same transportation needs as the vehicles they are replacing while minimizing their costs and CO2 footprint. It also shows customers combinations of vehicles they could buy to make even greater reductions to the overall CO2 footprint of their fleet, including the associated purchase price and fuel costs.

This tool is delivering benefits to Ford’s fleet customers and the environment. By using this tool, KONE, a leader in elevator and escalator manufacturing, has decided to replace its fleet of 160 Ford Fusion cars with the new Fusion Hybrid by 2018, resulting in a reduction in KONE’s carbon emissions of 850 metric tons – while also saving the company money.

The Ford Fleet Purchase Planner™ is part of Ford’s larger commitment to using data and analytics to benefit our customers and the environment. The unique tool was among three finalists for the 2014 Innovative Applications in Analytics Award by INFORMS, the largest association for professionals in analytics. Ford also won the 2013 INFORMS Prize, which acknowledges a company’s overall achievement in analytics.