Jacinto Guadalupe Hernandez Rodriguez has been driving cement trucks in Mexico City for years. He knows every shortcut around this confusing, sprawling metropolis of 16 million people. But his experience can take him only so far. Today, he gets help from a computer, which tells him there is a traffic jam up ahead and lays out a route for detouring around it.

Hernandez Rodriguez, a driver for Cemex SA (www.cemex.com), the Mexico-based cement maker that is the world’s third largest, swings the wheel in his big white truck with the jaunty red and blue stripes. He explains that he has a Global Positioning System unit on his cab, so the dispatcher always knows where he is. Using a sophisticated, electronic scheduling system, the dispatcher sends him messages to reroute him based on traffic information or based on the changing needs of customers.

The wireless system has made Cemex into a virtual river of cement, which the dispatchers can divert to whomever needs it, at almost the exact moment they want it.

As recently as six years ago, Cemex, like most of the industry, could specify a delivery only within a three-hour window. Today, Cemex guarantees delivery within a 20-minute window, and it is aiming for 10. Wet cement mix is more perishable than fresh fish—it turns to useless chunks after 90 minutes—so customers gladly pay a premium for precise delivery times.

At the same time, Cemex’s delivery system is so efficient that Cemex has been able to cut its truck fleet by a third even as business has grown steadily. Cemex has achieved pretax profit margins of 37%, compared with 23% at its largest competitor, and generates 50% greater cash flow than that competitor. Cemex had net income of $1 billion on $5.6 billion of revenue in 2000.

All this from selling a slightly processed version of dirt, based in a country that isn’t exactly known as a center of technology, while spending a relatively modest $200 million on information technology over the past decade.

“First and foremost, the company has been very good at using technology,” says Dan McGoey, an analyst who covers the construction industry for Deutsche Bank (www.deutsche-bank.de).

Cemex also demonstrates how technology practices are leeching from one industry to another, for Cemex developed its system by studying organizations as far afield from the cement industry as 911 operations and FedEx Corp. (www.fedex.com).

Modern technology wouldn’t seem to have much place in the cement world. Portland cement, the material used in construction, has been essentially unchanged since it was patented in 1824 by Englishman Joseph Aspdin. Cemex has been digging limestone and clay for cement out of the same hillsides near its Monterrey headquarters for nearly a century. Lorenzo Zambrano, chairman and chief executive, uses more or less the same process that his grandfather used when he founded the business in 1906: Steam shovels scoop up the quarried material and dump it into freight cars that then coast down to a nearby plant.

At the plant, the process becomes positively primordial. The pulverized ingredients, plus chemical binders are cooked in kilns so hot that they must be rotated constantly to prevent them from drooping.

The cement industry seems to belong to the modern world solely because it is so capital-intensive that managers need to be financially shrewd. McGoey says, “The cost to build a cement plant is in excess of $125 per ton. So 75 million tons of capacity is an investment of close to $10 billion.” He picks that capacity because Cemex annually produces 77 million metric tons of cement worldwide, enough to fill about 1,000 football stadiums to the brim.

Still, the 56-year-old Zambrano has been a technology fanatic since taking an advanced engineering degree at Stanford University, and he has consistently found ways to use technology to great advantage.

As far back as 1988, shortly after Zambrano took over the business, he connected all of Cemex’s offices worldwide through a global satellite communications system. The move provided a backbone for international expansion because he could more easily communicate with far-flung operations, even in some of the underdeveloped Latin American countries where Zambrano began to do business. Although Cemex resolutely limited itself to being a regional player for its first seven decades, global expansion is crucial to Zambrano’s vision of the industry, which he views as a sort of chess game. He wants to be able to threaten the core markets of his big competitors—which are mostly European but are likely to also include more Asian companies in coming years—to warn them against moving too strongly into his.

In the early 1990s, Zambrano built a sophisticated executive information system that lets him monitor operations closely. From his laptop computer, he can see at a glance how business is doing in the 35 countries where Cemex operates. If the region is colored green, it is doing great. Yellow means potential trouble. Red indicates a real problem. If he wants, Zambrano can systematically dig down into the detail for any area, to the point of even reading the e-mail exchanges about a production problem at an individual plant. Zambrano says he sometimes sends e-mail about production issues to workers at the plants, just to let everyone know he’s watching.

Zambrano has also used technology aggressively inside plants. After all, Zambrano has his roots in the plants at Cemex, where he began work as a teenager during summers in the early 1960s while attending the nearby Monterrey Institute of Technology—one of the country’s most prestigious universities, consciously modeled after that other MIT, in Cambridge, Mass. When Zambrano joined the company full time, after earning his M.B.A. at Stanford in 1968, he was immediately put in charge of an inefficient plant in Torreon, about 200 miles west of Monterrey, where he devised a technique that cut three hours off the production time for an important intermediate cement product. By the early 1980s, Zambrano had turned around another plant in Monterrey and was well on his way to the top job. Today, a plant that produces millions of tons of cement a year may be operated by just half a dozen people working from a control panel.

Getting employees to see the value of the technology was initially hard. Almost everyone balked. Jilberto Garcia, director of information-technology business development, says “computer literacy was a problem. When the chairman declared we were going to use Lotus Notes and the standard tools, no one wanted to do it. Finally, he said ‘I will not receive any more memos by paper.’ It was a real challenge at first, but they were forced to adapt.” Eventually, “executives were transformed from spectators to participants” in Cemex’s emphatic use of technology, Garcia says.

By the late 1990s, it was natural that executives would look to electronics to solve what had been an intractable mess: the industry’s ordering system. Dispatchers would take orders for thousands of grades of cement, then forward those orders to a mixing plant, each with its own fleet of trucks. With Mexico’s antiquated phone service, Cemex’s phone lines frequently jammed with calls from customers, truck drivers, and dispatchers, resulting in lost or delayed orders. While Cemex promised to deliver within a three-hour window, it succeeded only if most things went right once the truck left the plant. Add bad weather, traffic jams, labor disputes, and cancellations, and chaos sometimes reigned.

When Zambrano decided to improve customer service—a novel idea in the construction industry at the time—Cemex began by surveying customers to find out their priorities. Was it price? Reliability? The answer: a good product delivered immediately. Price came third, even though cement is seen as a commodity business.

Cemex executives visited FedEx, Exxon Mobil Corp. (www.exxon.com), and Houston’s 911 systems to study what made their systems work. From FedEx, Cemex learned about central dispatching. The Cemex team studied how Exxon took and filled orders for its tankers. From 911, the team members learned how to handle unanticipated calls and emergencies.

Cemex then built its own fast-response digital system, Dynamic Synchronization of Operations, building on the satellite communication it installed in 1988.

Now rather than operating independently and often blindly about the supply-and-demand situation at other plants, each facility is coordinated from a central clearinghouse. Dispatchers know the location, speed, and direction of all vehicles at all times, and can quickly choose optimal combinations of truck and mixing plant locations to fill an order. Customers can bypass operators and go directly to the company’s customer Web site to place orders, check on the status of an order, request account information, or, using the same GPS satellites, pinpoint the location of a delivery.

“Other companies may be cheaper, but they don’t have good customer service like Cemex,” says Jose Maiz, whose construction company, Construra Maiz Mier, has been a customer of Cemex for more than 30 years. “When you’re working on a project, it’s important to have the concrete when you need it. Cemex does a great job of making sure it’s there on time.”

Emboldened by all his successes, Zambrano is now experimenting with whether Cemex’s prowess in technology can be used in other ways. He has set up a technology consulting arm, an online marketplace for construction materials, and a second online marketplace for other supplies, and has taken a stake in an Internet incubator.

In September 2000, Cemex set up CxNetworks, a subsidiary that Zambrano hopes will build a network of new businesses with a strong base in information technology in areas that complement cement. CxNetworks is also chartered with finding ways to take what it learns about the online world and help Cemex exploit it in its core business, says CxNetworks President Juan Pablo San Agustin.

In December 2000, CxNetworks joined the forces of Cemtec (Cemex’s consulting arm) with consulting firms elsewhere in Latin America to form Neoris, an e-business consulting company focusing on the construction, education, manufacturing, and telecommunications industries. Neoris estimates sales of $150 million for 2001.

Cemex also launched ConstruMix, an online marketplace and construction community for producers, distributors, construction firms, and contractors. ConstruMix allows participants to conduct online auctions and purchases and provides construction industry news and market data.

Cemex’s third Internet venture is Latinexus, an online marketplace for office supplies and furniture. It is a joint venture with Mexico’s Grupo Alfa, Brazil conglomerate Votorantim, and Bradespar, the investment arm of Brazil’s largest bank.

These moves are all part of what Zambrano calls “the Cemex Way,” which he defines as “a companywide effort to manage our global knowledge base efficiently, identify and disseminate best practices, standardize our business processes, implement key information and Internet-based technologies, and foster innovation.”

It’s comes out as quite a mouthful from the Mexican cement baron. What it boils down to is his desire “to transform knowledge into profitability.”

Newsome is a free-lance writer in Matthews, N.C. She can be reached at MelbaToast@carolina.rr.com.