Reliance Industries Limited Wins Team Excellence Award Competition

Journal for Quality and Participation, The, Summer 2006 by Bhatt, Hari, Dhingra, Neeraj, Jain, Akhilesh, Kale, Sachin, Vakil, Suketu

Reliance Industries Limited (RIL) was set up by the farsighted businessman Dhirubhai Ambani (1932-2002) more than three decades ago. RIL has emerged as India's largest private-sector enterprise and carved out a distinct place for itself in global Fortune 500 companies. Reliance's business success and competitive position reflect the leadership provided by its founder, who said, "Growth has no limit at Reliance. I keep revising my vision. Only when you dream it do you get it."

The leadership system defined by Ambani is based on value creation, particularly for the customers and shareholders. Now, Shri Mukesh Ambani, chairman and managing director, is steering the company, building on the founder's vision. The Hazira manufacturing unit's management team, headed by Shri H. S. Kohli, executive director, is focused on fulfilling the needs of its various stakeholders through excellence in systems, processes, technology, and people and toward fulfillment of the corporate vision: "To become a globally competitive enterprise, driven by the market, creating and maintaining a lead over competition through quality products and establishing itself to be the preferred supplier of its customers."

With vertical integration of its chain from refinery to textiles, Reliance has a unique fully integrated structure, producing fabrics from crude oil. Its existing and emerging businesses in exploration and production, refining and marketing, petrochemicals, textiles, and retailing have given Reliance a unique leadership position in India and the world. Reliance has the distinction of being among the top 10 global producers in all of its major petrochemical product lines. The company's vision is "to grow on a sustainable basis and be the largest and most innovative, profitable, and admired polyester producer in the world."

The Reliance Hazira manufacturing unit began its quality journey after starting up in 1991, transforming into a quality organization with quality people. Reliance has built a workplace that proactively fosters professional as well as personal growth, stressing quality of life. The company's commitment to excellence and its efforts to continually enhance the quality of all products, processes, and services contribute largely to its leadership in its major businesses. Total quality management (TQM) has yielded significant benefits in improving productivity, product quality, reliability, efficiency, people involvement, etc.

As an extension of its TQM practices, Reliance Hazira embarked on a Six Sigma initiative in 2001, delighting stakeholders by creating an organizational culture of zero defects through employee involvement. The project described in this case study utilized the systematic approach of Six Sigma methodology to reduce variation and improve business process performance, profits, customer loyalty, and the environment.

This case study summarizes the work of the Polyester Fiberfill Cost Reduction team, which presented its story during the 2006 International Team Excellence Award Competition and received the coveted Gold Award for its efforts. Hari Bhatt, Neeraj Dhingra (project leader), Akhilesh Jain, Sachin Kale, and Suketu Vakil comprised the team. Sekhon Jagmohansingh served as the team's facilitator and coordinated its participation in the competition process.

Evaluation Criteria One: Project Selection and Purpose

Reliance is the world's top polyester producer with manufacturing facilities in India and abroad. Since Reliance is the world's largest polyester producer, the company also generates the largest quantity of polyester waste; therefore, the company also operates the largest international polyester recycling facility which produces polyester fiberfill used for filling and stuffing applications. Of course, every effort is made to reduce the overall quantity of waste generated in the manufacturing process, but the company's use of recycled materials is an essential step in making it possible for Reliance to serve society by eliminating non-biodegradable polyester waste from the environment and converting it into value-added products. In fact, the company not only recycles its own waste but also purchases waste from external sources.

In order to achieve Reliance's quality and productivity targets, the company must carefully control the materials put into the polyester production process; therefore, the quantity of recycled waste being used was trending down, and high-cost oligomer was used instead. The price of oligomer was rising in conjunction with the escalating price of crude oil, exacerbating the need to improve the quality of recycled fiber. Additionally, the poor quality of polyester waste feedstock required higher doses of high-cost toners, raising the conversion cost even more.

All of these factors affected profit margins adversely, as well as reducing the company's ability to protect the environment with its recycling efforts. Product quality was slipping because of contaminated feedstock, and customer satisfaction issues were also occurring. The company was growing increasingly concerned about the problem, particularly given its mission statement, which includes the following two aspects: