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Cemex

Instructor

Institution

Course

Date

I: Understand the cement industry in Mexico and CEMEX’s IT initiatives.

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1.Discuss characteristics of Mexico's cement supply chain and challenges in CEMEX Supply
chain management
CEMEX operates in the Mexican cement industry; thus, its supply chain provides insight
into the country’s supply chain management. CEMEX demonstrates cement supply chain in
Mexico is dynamic in response to market trends, consumer demands, and technological
advancement. The first characteristic of the cement supply chain in Mexico that CEMEX
demonstrates is that it is evolving. The supply chain has undergone efficiency improvement since
the 1990s, when distributors and contractors waited in line for days, to 2005, when
manufacturers had up to 24-hour delivery policies. Notably, the supply chain improves its
efficiency through independent retailers who sell to end-users.

Although CEMEX has an innovative supply chain management, it faces various

challenges. The company's multi-product strategy, for example, poses a challenge to CEMEX’s
ability to control its supply chain. The strategy makes CEMEX’s supply chain complex and
uncertain since it requires distributing materials whose manufacture and delivery time it cannot
control. It is hard for the company to assimilate the delivery of products with unstable delivery
schedules. CEMEX needs to predict the receipt and delivery of products such as rebar. The other
challenge is the shift in consumer demand from bagged to bulk cement. CEMEX needs to adjust
its logistics and distribution procedures to incorporate this market shift.

2. Provide a rationale for and comment on CEMEX's strategic moves in merger and acquisition
and investment in IT since 1985.
CEMEX's mergers and acquisitions present an effective strategy by which the firm aims
to become a global industry leader. Mergers and acquisitions have helped the firm achieve an
international presence, thus remarkable market expansion and diversification. The strategy also
helped CEMEX reduce its dependence on the Mexican market, thus increasing its market scope.
Additionally, mergers and acquisitions have helped CEMEX achieve vertical integration for a
more effective supply chain and lower distribution costs. Mergers and acquisitions have also
helped the firm attain operations, technology, and management synergy. The company has,
therefore, enhanced its international competitive advantage through these ventures.
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Investing in IT has helped CEMEX achieve operational and distribution effectiveness.

Techno-efficient tools have helped the company attain product shortage and potential shortages,
thus, effective inventory control. The use of ERP and SICADI (an in-house IT system)
additionally helped CEMEX process orders more effectively from a central call center in
Mexico. Investing in IT has also made it easier for CEMEX to penetrate the global market
through effective communication and geo-diverse coordination. Technology has thus helped the
company expand and improve its operations and distribution effectiveness, making it more
competitive and customer-centric. The company has, therefore, improved its ability to attain its
goals and objectives.

3. CEMEX investment in information systems was strategically significant to all of its other
supply chain structural changes. Use the "Dimensions of Supply Chain Integration" framework
(which was introduced in the Seven-Eleven Japan case) to illustrate how CEMEX's IT initiatives
(described in the book chapter excerpt, i.e., Reading 2) enable its supply chain integration at
various dimensions
CEMEX IT initiatives enable supply chain integration across various dimensions. Firstly,
the initiative made it possible for the firm to integrate its internal processes through
CEMEXNET. This communication system introduced centralized control and real-time
monitoring of various company facilities for ease in decision-making.

CEMEX IT development also made customer integration possible by aligning its

products and customer service with their demands. IT enabled the company to analyze customer
data and thus customize products to meet consumer preferences. Consequently, the company has
been able to improve its customers' satisfaction, experience, and loyalty globally.

Investing in Information Technology has also helped CEMEX attain supplier integration.
The company is now able to streamline interactions with different suppliers through effective
communication and collaboration. CEMEX is thus able to maintain good relations with its
suppliers based on effective planning and coordination.

Ultimately, IT initiatives have enabled CEMEX to achieve information integration.

Information Technology has made it possible for the company to integrate information across
various parts of its supply chain and avoid information breakdowns through CEMEX and
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Executive Information Systems. Using computerized systems has also helped the company
improve its accuracy regarding data recording and analysis.

II: Discuss the end-to-end transformation of the CEMEX supply chain.

1. The first supply chain innovation that CEMEX adopted was under the "continuous
improvement philosophy ."The innovation aimed to change CEMEX's supply chain to
meet the needs of its customers (retailers and end-users) needs. The initiative
delivered better services, efficiency, and reliability to the retailers and end-users. The
multi-product strategy is also a supply chain innovation that CEMEX applied to
deliver efficiency to its product retailers and end users. The initiative provided
CEMEX customers with a one-stop shop for multiple construction materials while
CEMEX reaped efficient distribution and consumer loyalty. Logistic optimization is
the other innovation that CEMEX implemented. This initiative helped the company
reduce logistics costs logistic providers enjoyed stable and timely deliveries that
made them more productive.
2. Each innovation utilized CEMEX’s operational strength while overcoming various
challenges. The continuous improvement philosophy leveraged CEMEX’s top
management commitment, with the example of the CEO Lorenzo Zambrano. The
initiative also utilized the organization’s ability to implement change while
overcoming resistance to change. It also faced the challenge of rapid training needs
and intensive capital investment requirements. The multi-product strategy, on the
other hand, leveraged the company's ability to handle large amounts of data through
computerized systems. It, however had to overcome the challenge of managing
complex logistics and uncertain production and distribution schedules. Ultimately, the
logistics optimization innovation leveraged CEMEX’s effective logistic network
supply chain management, and faced the obstacles relating to infrastructure and
regional diverse transportation.
3. CEMEX can apply these innovations to improve its global efficiency. The company
can, therefore, invest in constant change, multi-product strategy, and logistic
optimization in developed and developing countries. The strategies can help CEMEX
enhance its supply chain effectiveness outside Mexico.
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III: Recommendations to CEMEX.

1. How should CEMEX respond to the shift in purchasing from bagged to bulk
cement in northern Mexico?
The first step that CEMEX should take in response to the changing consumer
demand is to carry out a comprehensive market study. The analysis should
understand the factors driving the consumer demand shift, evaluate its impact, and
segment customers according to their needs. The company should then use the
findings of the study to realign its product portfolio, investing more in producing
and distributing bulk cement. The firm should also take time to engage with its
product’s retailers and end-users to gather information on the best branding and
marketing strategies and implement such strategies for optimal change
implementation.
2. What can CEMEX learn from its experience of the end-to-end transformation for
the bagged cement and apply it to the bulk cement business?
There are several lessons that CEMEX can borrow from its end-to-end
transformation for bagged cement and apply to bulk cement ventures. The first
lesson the company can use is the need for vigilant market monitoring and
strategic adaptation. The firm should thus apply constant monitoring of customer
behavior, competitive strategies, and industrial trends within the bulk cement
business to capitalize on its strengths and opportunities while overcoming its
weaknesses and threats. The firm should also learn to be innovative and flexible.
Consequently, it should adopt innovative and flexible packaging alternatives to
meet consumer demands. It is also essential for CEMEX to be customer-centered
by understanding the unique needs of bulk cement customers. Similar to the
supply chain management services the company offers its clients, it should tailor-
make customer services to meet the requirements of its bulk cement customers.
CEMEX can also borrow the lesson of supply chain optimization, and IT use from
bagged cement business. Consequently, the firm should have effective
distribution and logistics control and management strategies to succeed in the
bulk cement business.