Digitization of CEMEX

By Indhujha Natarajan

300 workers x 25 dollars/hour x 2 hours=$15000

Fluctuating demand: the cause

•Long lead time•Frustrated customers•High operating costs

Effects

Recommending DigitizationCemexNet: Consolidate data at a central repositoryAchieve Inter-plant communication

Dynamic Synchronization of Operations:Install GPS and computers on trucksRoute delivery trucks in real-time

Reducing Operating costs

Save $100 million in operating costs35% fewer trucksSavings in fuel , power and maintenance.

Reducing Delivery time From 3 hrs to 20 minutesReduced order processing timeWeb network of trucksReduced wastage-prevent hardening

Spreading smilesFast delivery reduces customer’s costHappy customers-98% on time deliveryPremium pricing possibility

Initial price Premium price

0

40

80

120

Cement Prices (per ton)

Cement Prices

Showing a Year by Year SnapshotYear 0 CemexNet Project Begins

$110 Million Investment

Year 1 Year 2

Year 3CemexNet Project launched

Year 4 Year 5 Year 6

Year 7

$100 Million Savings,$1401 Million increase in sales over 4 years-20% YoY growth

Year 8

Digital Synchronization begins and gets launched $90 Million Investment

Year 9 Premium Pricing begins $811 Million increase in sales-25% growth

Acting on the plan

Dynamic Synchronization

CemexNet

Consolidate/Digitize Data

3YEARS

1YEAR

Cost For Entire company

Amount(in MILLION $)

Time period of investment Investment items

CemexNet $110 3 yrsDigitize, Consolidate data and Inter-plant communication

Dynamic Synchronization $90 1yr

Digital network, GPS, computer terminals

Total $200

Savings For Entire company

Amount(in MILLION $) Time period of return

Labor costs $40 Fuel,maintenance $60 Total $100 4 years

Return from salesAmount(in MILLION $) Timeline Percent increase

Increase in sales $1401

4 years after implementation of centralization

20% increase in sales every year for the 4 years

Increase in sales $811

1 year after implementation of Dynamic Synchronization and Premium Pricing 25% increase in sales over 1 year

Projecting sales

Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9

0 1 2 3 4 5 6

1305 1566 1879.2 2255.04 2706.048 3247.258 4059.072

Total increase from 0 to 4 1401.048

Between 5&6 811.8144Figures in million dollars($)