Cemex Case Study

Another multinational that is well known for its supply chain and logistics is CEMEX, also known as Mexican Cement. This is a global Mexican company that sells cement and clinker, it was founded in 1906. This multinational offers high-quality products and services in more than 50 countries worldwide. CEMEX has been distinguished by the growth that led it to become the market leader in Mexico. The company is now ranked as the second largest company worldwide in sales of building materials, with a production capacity of 96 million tons per year and is the leading producer of ready-mix concrete, with a production capacity of approximately 77 million tons per year (Cemexusa.com).

A great part of CEMEX success is linked to several factors such as its integration processes, international expansion, and its supply chain management and logistics. After the mid-eighties, the company has faced various phases of learning and transformation, which have led to better economic outcomes. Under the direction of former CEO Lorenzo Zambrano, CEMEX applied efficient logistics techniques into the firm’s globalization of operations. For example, the firm focused its resources on more sophisticated communications systems. It is well known that having an efficient communication system with customers and suppliers is vital when managing the firm’s supply chain. CEMEX uses an advanced communication system to interact and work closely with its transportation staff, suppliers, inventory managers, as well as its customers. By following this communication system, the firm is able to improve its logistics, transportation activities and the flow of materials (TheEconomist, 2001).

CEMEX logistics function works in both internally and externally ways. Internally, it is responsible for keeping an efficient supply chain performance that allows the company to lower costs and improve inventory levels. Another key factor of CEMEX’s internally logistics success is the number of distributors and suppliers that uses. This company deals with a great number of small distributors rather than a few large ones. At the same time, the company keeps tracks of every transaction in an online database. This has allowed the firm to improve its logistics, operate with lower inventory levels, reduce costs, as well as increase customer satisfaction. Externally taking, CEMEX logistics is responsible for meeting the customer’s expectations, as well as improving the customer service provided (Vargas, 2014).