Creating order out of chaos.

Throughout its 100-year history, CEMEX’s business success has depended on its ability to precisely and efficiently integrate massive quantities of such raw materials as limestone, sand, clay, and gypsum to manufacture cement, the oxide powder that when combined with water produces concrete. As it grows its business across 50 countries worldwide, CEMEX is applying its expertise in extracting and integrating disparate ingredients to another raw material—its enterprise data. The mission-critical importance of data in CEMEX operations was underscored when the London-based RMC Group was bought for $5.8 billion in March 2005. On the business side, the acquisition was a tremendous opportunity that made CEMEX the worldwide leader in ready-mix concrete overnight and deepened its presence in Europe.

Cemex has been Spain's top cement supplier since 1992 and opened a US subsidiary based in New Braunfels, Texas in 1994. But it specializes in places that lack highly developed road systems, solid telephone networks and well-educated workers. Surviving in the construction business in those locations is like keeping your head above water in a raging sea. Reliable information has real scarcity value. When equipment breaks down, workers can't get to the site. Exchange-rate fluctuations jack up supply costs. Being competitive boils down to being able to show customers that you can save them from uncertainty.

What Cemex has been looking for are ways to adapt global technology to the developing world's essentially limitless range of local problems. Complexity theory is one answer - systems that take uncertainty for granted and allow solutions to evolve, rather than trying to rigidly engineer them. Ad hoc options in place of schedules. On-the-spot decision-making instead of hierarchies. Those kinds of strategies are not unknown in the mainstream corporate world. Cemex's leap is to apply them to parts of the world where complexity - if not outright chaos - is the defining characteristic. And where the rewards for creating order can be great.

To get started, Cemex took a dozen executives to the Memphis headquarters of another company facing delivery problems: FedEx. There, along with the flashy logistics, was a deeper message: the value of delivering perfect service, what came to be known at Cemex as "impeccability." They also paid a visit to the fire ambulance division of Houston's 911 operation. They were amazed at how quiet it was and wondered, “How can they be dealing with emergencies? The answer was that what was an emergency for us was routine for them." Learnings? The system got the necessary information from people quickly. It pinpointed available resources in real time. And it gave operators on the spot - not distant managers - the authority to respond instantly.

Cemex realized the paramount importance of commitments as a way to cut through chaos and uncertainty. To back up that concept, it brought in Fernando Flores from Business Design Associates, an Alameda, California-based consulting firm. The core of Flores's message: successful systems are driven by loops of people working to fulfill commitments - say, getting a truckload of ready-mix concrete to a certain building site at 1:35 p.m. "No machine can make commitments," according to Flores. "Only a free man can make commitments." And only one who has a clear picture of what's going on.

So, Cemex's mission in Guadalajara was to build a system that could make each ready-mix truck as independent as possible - in effect, an autonomous agent cruising the city, waiting for orders. Instead of stationing an order taker at each plant, Cemex decided on just one central operations room for the whole city. Most important, instead of struggling hopelessly to keep to a fixed schedule, the goal became to keep enough options open to handle any likely request. If you can predict where the orders are coming from and can maintain random distribution of trucks, you should always be able to have one close to where it's needed. If you can have a chaotic distribution of vehicles, then you’re really trying not to control chaos, but to use it to your advantage.