Cemex Case

CEMEX is one of the world’s top producers of cement and concrete manufacturer and it is rapidly spreading across the globe, serving thousands of customer’s everyday through a worldwide network. CEMEX based in Mexico. At first CEMEX’s strategy are improve and increase their profit to more efficient by selling products and turn into selling of complete solution because they have difficulties in their business, because of lack of well communication system, weather changes, traffic jams and problems with building permits. In 1985, CEMEX developed a series of systems that would enable to manage unforecastable demand better than its competitors. A major plan was to build a telecommunication infrastructure. However, it was difficult to establish fast and reliable telecommunications between CEMEX’s geographically dispersed operations via Mexico’s public telephone company. They apply an information system that gives solutions to the problems, CEMEX Net was established, and it’s allowed data and voice transmission among the 11 production facilities in Mexico. And that CEMEX gain efficient production, distribution and delivery process. It is for the company to increase their productivity and manages operations well.

As the company because larger, more plants in different locations, management had a greater need for accurate, timely and easily information for performance review and decision making. CEMEX needs to be able to accurately detect and assess vulnerabilities to proactively protect the systems on its network. It also needs to proactively prevent data loss, especially the loss of intellectual property. Otherwise, with deliveries of bulk powders, mistakes are not simply an inconvenience. Should CEMEX deliver the incorrect grade of cement to a customer who then used it for the foundations of a building, this would be an incredibly costly and time consuming error to rectify. That’s the challenge was CEMEMX facing to ensure the right vehicle delivers precisely the right product to the right customer site.

CEMEX had trained employees on business software through class room instruction programs. This included training of enterprise applications and a variety of diverse business systems. CEMEX’s IT department faced the challenge of implementing new system throughout CEMEX’s global regions in the United Kingdom, Germany, France, Poland, Ireland and Croatia. This significant project required training 6000 users on the new system located throughout the six different regions and within a short length of time. With such a large training on new system, classroom only instruction for employees at each geographic location would be very difficult and cost prohibitive. CEMEX worldwide users needed to be trained quickly and knowledge needed to be transferred into different languages that’s the training challenges CEMEX faced. Also, CEMEX faced the huge challenge of how to rapidly integrate the newly acquired companies into its existing operations and to turn around any under-performing or poorly managed companies. The post-acquisition integration team, made up of talented and experienced executives and employees, was sent to analyze and integrate every new acquisition.

They performed tasks such as transferring management skills to local managers, eliminating duplicate functional areas and roles, improving information technology, standardizing business processes, and recruiting and training people with talent. To improve information technology, the integration team installed new computers and software according to the CEMEX IT standards and processes. The team believed that changing the values and behaviors of employees in the newly acquired company was important. Communicate with each other can via email and throwing away in trays and out trays. Therefore, integration team often spent months—even up to a year for training people in how to use the IT and follow the new business processes.

Reflecting on experience of integrating the first few acquired companies into CEMEX, building IT infrastructure was not sufficient, therefore CEMEX included being “people oriented” as a selection for hiring IT managers and launched training course on human philosophy as part of the business process program. So that the management team learned how to increase people’s willingness to accept new ideas and adopt new practices. At last, this program was very successful; it helped to shift the focus of global information system design from technological infrastructure to information processes and using it. On the other hand, team members were motivated and rewarded by sharing part of the cost savings.

As well as changing the focus of information system design, CEMEX enhanced its technological infrastructure and reorganized its IT team during this period. In 1992 CEMEX installed ISDN to replace the satellite communications system and adopted JD Edwards’ standard software package for finance and distribution. So they can focus on assessing business requirements for IT. In 1993 CEMEX realized that its IT team had been developing competence in integrating IT platforms and foresaw the potential of leveraging this competence to offer consulting services to other companies. At the same year, CEMEX rolled out Lotus Notes, they fully support paperless information sharing and pushed his staff to adopt the new information technology. Also, reduce using paper, It’s good for environment. CEMEX’s distribution challenge did not depend on the IT infrastructure, it also relied on management practices to collect and process customer feedback. CEMEX give customers short surveys to complete upon delivery and entered into online customer files and displayed graphically. Moreover, collecting detailed client information later facilitated the development of a software that used structure type and climate conditions to calculate the precise strength and durability of the comment a customer would need.

The information system helped change how people managed their time and work. Information was readily available in the system. Employees no longer had to stop what they were doing look for information. It allowed individuals more time for more creative problem solving.

CEMEX also developed an internal worldwide benchmarking database on production and sales to allow employees access to information about operations. Many acquired entities were traditional companies, in which information had generally been reserved only for senior management. It’s help to remove the skepticism of some employees. The information system also let employees to learn from mistakes and increase productively and manage its operations more efficiently. The company has gained a significant competitive cost advantage over its competitors by setting up an excellent distribution infrastructure and centralized, computerized delivery network in which every moment of every truck is monitored in real time, enabling on-time delivery of cement and ready-mix to customers.

They put more time on the technology information cause of CEMEX had the vision to see the challenges presented by that strategy how technology could be used to overcome them. CEMEX understanding the trucks on the road can be re-routed to more immediate needs, but rather that improved communication between CEMEX’s disparate locations could improve company performance as a whole. In addition to this vision, have the fortitude to take on traditional corporate methods of operations and revamp them for success in a technologically driven business environment.

As described in the case, CEMEX’s revenue increased approximately 500% over a ten year period. CEMEX achieved this level of success by having a strong understanding of its industry and by also applying sensible business decisions that leveraged this understanding. Specifically, they understood early on that the company’s primary product, cement, had low labor costs but high transportation costs. Although a simple and evident concept, better customer services and loyalty could be achieved. At last, CEMEX rollout of various companywide e-enabling initiatives such as e-selling, e-procurement and e-workforce. These e-business initiatives were launched to encourage customers, suppliers and employees to leverage on CEMEX’s investment in the internet and intranet in order to deepen the relationship with these stakeholders and to lower costs. CEMEX had numerous options for the future path to global growth, international acquisitions, e-business consulting, procurement portals distribution logistics and expansion in the construction industry. Those trends are very important characteristic of the industry.