Case Study: Cemex A Digital Firm In The Making
Case Study: Cemex A Digital Firm in the Making
Question 1: How did digital technology transform the way Cemex ran its business?
Because of the vision of the grandson Lorenzo Zambrano, Cemex moved from a very manual mode of operation to one where its processes were now done with the use of technology. With this in mind we can identify how Cemex was impacted by the use of digital technology below:
(a) They were better able to manage “unforecastable demand”, relative to its competitors.
a. All vehicles were connected to GPS tracking system
b. As a result they achieved a reduced delivery time from 3hrs to 20 minutes
c. Dispatchers were better able to monitor trucks
d. They were able to anticipate delivery times and redirect trucks where necessary.
(b) Reduction in Costs was realized as a result
a. Trucks were able to deliver in shorter time frames and 35% less trucks were necessary to deliver the same amount of cement.
b. Software package was used to anticipate power consumption requirements and also to facilitate use of machines during off peak hours resulting in lower electricity costs.
(c) Increased revenue was realized
a. Customers were now willing to pay premium price since Cemex was able to facilitate Just in time (JIT) delivery. This meant customers no longer had to have crews waiting for long periods pending delivery.
b. All production facilities were linked via the satellite communications system and this facilitated better planning/forecasting
c. No lost orders since orders can now be placed on the internet and not dependent on someone to take order over the phone.
(d) Increased levels of customer service, better customer relations
a. Orders can now be made via the internet and tracked by customer
b. This cleared up the congestion on the phone lines.
(e) More prompt and decisive decision making