Why Cemex works.

For all the money Cemex has spent on information technology - an estimated 1% of its annual revenue - the first thing its executives say is that none of this was really about computer monitors or digitized truck schedules. The Guadalajara ops center's machines might as well be a pile of rusted-out filing cabinets for all the importance that Cemex's philosopher-engineers attach to them when they are deep into what they call "the conversation."

The conversation is an ongoing process of top-to bottom self-examination. Conversations are where things are invented. People talk about what they do and what they can do better, that's how they find out where they need to focus their efforts. After six to eight months of conversations, Cemex realized that it had to reinterpret what it was doing. Conversations started by asking, “What is it we want?" searching for anomalies and examining the conventional wisdom - which was, 'We have to schedule deliveries one day ahead of time. Why? Because that's the way we’ve always done it.'

The foundation for what Cemex calls its Sincronización Dinámica de Operaciones is a set of business-process software and expert programs painstakingly gleaned by a team of Cemex specialists during nearly a year of meetings - 40 in all - in which the Guadalajara crew were grilled on the realities of their jobs: Thursdays and Fridays are busier because builders like to let concrete set over a weekend. The summertime's afternoon rains mean more morning deliveries. In this kind of world, you can throw linear programming out the window. The time it takes to go from point A to point B is a function of experience. What you're putting together is a world of judgments, not a world of facts. Fed with streams of day-to-day data - customer orders, production, traffic problems, roadwork in progress, even changing weather conditions - the result is what software designers call an adaptive system, one that actually gets smarter the longer it runs.

Operating over a PC-based LAN are the book-sized onboard computers and GPS relays that sit by each driver. The machines have a screen for ops center messages and customized buttons: "Leaving plant," or "Arrived at site," or "Customer not ready." The data meshes seamlessly with the rest of the system. "If a route normally takes 15-minutes, and after 15-minutes the driver isn't there, we'll get an alarm," says Suárez. The result is three integrated systems: one for taking orders, another for checking a customer's financial profile, and the last for tracking software the ops room dispatchers use. And the whole thing is accessible through Cemex's global WAN by any staffer in the world armed with the right passwords.

But the technology only works effectively if the rest of the organization - governance, structure, people and decisions are designed to fit in a complimentary way.