Case Study
Reliance Industries
Limited Wins Team
Excellence Award
Competition
Hari Bhatt,
R eliance Industries Limited (RIL) building on the founder’s vision.
Neeraj Dhingra, was set up by the farsighted The Hazira manufacturing unit’s
Akhilesh Jain, businessman Dhirubhai Ambani management team, headed by Shri
Sachin Kale, and (1932-2002) more than three H. S. Kohli, executive director, is
Suketu Vakil decades ago. RIL has emerged as focused on fulfilling the needs of
India’s largest private-sector enter- its various stakeholders through
prise and carved out a distinct excellence in systems, processes,
place for itself in global Fortune technology, and people and toward
500 companies. Reliance’s business fulfillment of the corporate vision:
success and competitive position “To become a globally competitive
reflect the leadership provided by enterprise, driven by the market,
its founder, who said, “Growth has creating and maintaining a lead
no limit at Reliance. I keep revising over competition through quality
my vision. Only when you dream it products and establishing itself
do you get it.” to be the preferred supplier of its
The leadership system defined by customers.”
Ambani is based on value creation, With vertical integration of
particularly for the customers and its chain from refinery to textiles,
shareholders. Now, Shri Mukesh Reliance has a unique fully inte-
Ambani, chairman and managing grated structure, producing fabrics
director, is steering the company, from crude oil. Its existing and
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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
The Reliance Industries Limited team celebrates its Gold Award in the
international polyester recycling facility which produces
2006 International Team Excellence Award competition. Left to right:
polyester fiberfill used for filling and stuffing applica-
Hari Bhatt, Akhilesh Jain, Suketu Vakil, Sachin Kale, and Neeraj Dhingra.
tions. Of course, every effort is made to reduce the over-
all quantity of waste generated in the manufacturing
emerging businesses in exploration and production,
process, but the company’s use of recycled materials
refining and marketing, petrochemicals, textiles, and
is an essential step in making it possible for Reliance
retailing have given Reliance a unique leadership posi-
to serve society by eliminating non-biodegradable
tion in India and the world. Reliance has the distinction
polyester waste from the environment and converting
of being among the top 10 global producers in all of
it into value-added products. In fact, the company not
its major petrochemical product lines. The company’s
only recycles its own waste but also purchases waste
vision is “to grow on a sustainable basis and be the
from external sources.
largest and most innovative, profitable, and admired
In order to achieve Reliance’s quality and productivity
polyester producer in the world.”
targets, the company must carefully control the materials
The Reliance Hazira manufacturing unit began its
put into the polyester production process; therefore, the
quality journey after starting up in 1991, transforming
quantity of recycled waste being used was trending down,
into a quality organization with quality people.
and high-cost oligomer was used instead. The price of
Reliance has built a workplace that proactively fosters
oligomer was rising in conjunction with the escalating
professional as well as personal growth, stressing qual-
price of crude oil, exacerbating the need to improve the
ity of life. The company’s commitment to excellence
quality of recycled fiber. Additionally, the poor quality
and its efforts to continually enhance the quality of all
of polyester waste feedstock required higher doses of
products, processes, and services contribute largely
high-cost toners, raising the conversion cost even more.
to its leadership in its major businesses. Total quality
All of these factors affected profit margins adversely,
management (TQM) has yielded significant benefits
as well as reducing the company’s ability to protect the
in improving productivity, product quality, reliability,
environment with its recycling efforts. Product quality
efficiency, people involvement, etc.
was slipping because of contaminated feedstock, and
As an extension of its TQM practices, Reliance Hazira
customer satisfaction issues were also occurring. The
embarked on a Six Sigma initiative in 2001, delighting
company was growing increasingly concerned about
stakeholders by creating an organizational culture of
the problem, particularly given its mission statement,
zero defects through employee involvement. The proj-
which includes the following two aspects:
ect described in this case study utilized the systematic
• To produce polyester staple fiber and fiberfill per
approach of Six Sigma methodology to reduce variation
market requirements in the most economical way
and improve business process performance, profits,
while achieving total customer satisfaction.
customer loyalty, and the environment.
This case study summarizes the work of the Polyester • To work constantly to encourage employees to
Fiberfill Cost Reduction team, which presented its story develop professional competency and to accept
during the 2006 International Team Excellence Award social responsibility through the company’s safety,
Competition and received the coveted Gold Award for environmental, productivity, and quality efforts.
34 THE JOURNAL FOR QUALITY & PARTICIPATION Summer 2006

Figure 1: Project Alignment With Organizational Core Objectives
Customer Satisfaction
Social Responsibility Employee Satisfaction
Business Growth Sustainability
Organizational
Core
Objectives
Profitability Reliability
Goals Affected
Business Core Objectives Strategic Business Objectives
Customer Focus Customer success and meeting customer QCD requirements Yes
Reliability Consistent high quality and zero failures Yes
Profitability Increased profit margin Yes
Sustainability Sustainable environment and ecological harmony Yes
Employee Satisfaction Employee satisfaction and better learning and growth Yes
Growth Growth and sales turnover Yes
Social Responsibility Trust and responsible care Yes
Furthermore, Reliance’s four foundational values — Stakeholders were involved in the processes of project
identification, evaluation, and also in ascertaining the
trust, environmental friendliness, responsible care, and
impact of a project on their businesses. Stakeholders
ecological harmony — all supported the team’s work to
from the business group were more concerned about
reduce the production cost of polyester fiberfill and
profits, volume growth, and customer satisfaction/
maximize the use of recycled polyester waste materials.
loyalty while operations management placed greater
Figure 1 shows the company’s core organizational objec-
emphasis on productivity and waste recycling.
tives, which were affected positively by the project—most
significantly customer focus (including quality, cost,
Evaluation Criteria Two: Current Situation
and complaint reduction), employee growth, process
Analysis
reliability, and environmental care.
The team formulated a tree diagram to portray the
The project’s key goals are listed below:
cost drivers of fiberfill production and determined that
• Reduce production costs by at least 5%.
the main drivers were raw materials, chemicals, and util-
• Increase the waste recycling rate by 5-7%.
ities, while the sub-drivers were fiber waste, PET bottles,
• Continue Reliance’s commitment toward social oligomer, catalyst, toners, and other components.
responsibility by conducting business in an Various other methods and tools were used to iden-
environment-friendly manner. tify the root cause, such as cause-and-effect diagrams,
A cross-functional team was established at the why-why analysis, regression analysis, and failure-mode-
business-unit level. The team used various fact-and- and-effects analysis. Figure 2 illustrates the relation
data-based tools and improvement methods to deter- diagram created by the team members to portray cause-
mine the project’s effect on performance, including and-effect relationships and help them analyze the
brainstorming, surveys, statistical process control, natural links between different aspects of the complex
and strategy mapping. issue of high production cost for fiberfill. The diagram
All agencies that had direct or indirect influence connects the main issues of low quantity of recycled
on the project were identified as potential stakehold- waste and high consumption of oligomer, catalyst,
ers and were questioned regarding their perspectives. and toners with improper feedstock management,
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Figure 2: Relation Diagram
Improper Improper Unskilled
Low-cost finish
No receipt
feedstock segregation labor
not available,
formulation
management finish loss Low pack
life Charging
Contamination Lower waste
Finish sequence
in feedstock Control consumption
applied time high
High oligomer
properties
for feel consumption
in product
Poor
Nonfunctional
equipment Nonavailability
drain and
High finish
reliability of good quality
vent valves High raw
High cost of
cost feedstock
material cost
chemicals
Upset in
More catalyst Improper
plant High PFF
Low
dosing reaction
production cost
plant
yield
High cost
High
High dosing
Poor quality of catalyst
throughput
of toners Constraint in
variation
the air drying
High High b unit system
High
process color
Variation Low moisture
variability
in polymer
Improper viscosity in flakes
supply
filtration in flakes
Improper Frequent
Reaction High metallic
design stoppages
severity contamination
in extruder
high process variability and reaction severity, and poor pointing toward a high potential for reducing their
waste feedstock quality. cost impact.
The team held brainstorming and consensus-building • Critical to quality (CTQ) elements were evaluated
sessions with process operators to identify the probable and prioritized in reference to the company’s bal-
underlying causes for these factors. Figure 3 shows the anced scorecard perspectives (customer, finance,
results of a series of Pareto analyses of the main cost dri- process, and learning). Maximizing the use of
vers, demonstrating once again that the ratio of oligomer recycled waste and reducing the use of oligomer
and toner to recycled waste was too high. The first Pareto and toner were the major elements.
diagram indicates that raw materials are the highest • Failure-modes-and-effects analysis (FMEA) validated
cost components in the process, as measured in rupees these components as contributing most greatly to
per kilogram. When raw materials costs are broken production costs, and a risk priority number was
down further in the second Pareto diagram, oligomer determined for each component based on its severity,
outranks the cost of monoethylene glycol (MEG) and occurrence, and detectability ratings.
waste feedstock, and the cost of toner/optical brightener Ultimately, the team proved that the quality of
is the most significant item in the third analysis. recycled waste feedstock was too variable and that
Other analyses and tools used included the following: more expensive materials were used to compensate
• Process capability studies of the oligomer, catalyst, for that variability. It became clear that the process
and toner materials showed their high consump- needed changes to eliminate the use of lower quality
recycled waste.
tion and poor process capability (high variability),
36 THE JOURNAL FOR QUALITY & PARTICIPATION Summer 2006

Figure 3: Pareto Analysis
Secondary Level Number 1:
Feedstock Elements
40 100
Cumulative Percent
Rupees/Kilogram
80
30
Feedstock—Includes recycled waste, oligomer, 60
Oligomer
20
and monoethylene glycol (MEG)
40
Chemicals—Includes toner, finish, catalyst,
10 20
and delusterant
Utilities—Includes power and steam 0 0
Oligomer Monoethylene Waste
Glycol feed
Primary Level: Secondary Level Number 2:
Fiberfill Cost Drivers Chemicals and Catalyst Elements
100 100
Cumulative Percent
Cumulative Percent
Rupees/Kilogram
Rupees/Kilogram
40 1.5
80 80
60 60
1.0
Raw material Toner
20 40 40
0.5
20 20
0 0 0.0 0
k
ies
ish
g
nt
yst
1
2
s
ts
er
ata ls
gh al
her
oc
gin
ly s
t en
ner
ner
d C ica
tr a
Bri ptic
ilit
t al
Fin
dst
Ot
ck a
an em
lus
To
To
Ut
Ca
O
Fee
Pa
De
Ch
Evaluation Criteria Three: Action Plan Development Figure 4: Final Solutions and Validation
The team developed a tree diagram to systematically Flakes
Hard/soft waste
identify the best way to achieve the required improve- consumption
consumption
ment actions. Key actions were designed to increase the Fiber waste
amount of recycled waste in the recipe formulation and
Monoethylene
reduce process variability by segregating feedstock more Final Oligomer
glycol
effectively and decreasing reaction severity. consumption
Solutions
consumption
Possible approaches were considered, and data was
analyzed to validate their potential effectiveness. Figure 4
illustrates the team’s final solution set. The following
Toner Catalyst/finish
actions were incorporated into the team’s change plan: consumption consumption
• Improve feedstock quality by segregating the type
and supplier of waste materials more effectively.
A group of stakeholders including site management,
• Control oligomer consumption by improving feed-
internal customers, support functions and suppliers
stock quality and filtration. assisted the team with developing the improvement
• Reduce conversion cost by using lower cost chemicals actions, ensuring stakeholders’ needs would be met.
and reducing reaction severity. Also, the team used the SMART process, as described
below, to guarantee that the selected solution would be
• Increase the waste recycle rate by 40% to reduce the
effective and efficient:
waste charging cycle time.
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Figure 5: Major Cost Drivers Consumption Trends
Recycled Waste Baseline
0.785
0.782
Recycled Waste Consumption
0.900
0.770
0.767
0.759
0.755
0.747
0.747
0.736
0.737
0.729
0.850
0.718
0.710
0.708
0.707
0.702
0.693
0.686
0.800
0.668
0.667
0.659
0.645
0.645
0.636
0.636
0.623
0.750
0.604
0.586
0.583
0.578
0.700
0.563
0.553
0.650
0.600
0.550
0.500
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
Jan-04
Feb-04
Mar-04
Apr-04
May-04
Jun-04
Jul-04
Aug-04
Sep-04
Oct-04
Nov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
0.548
0.533
0.517
0.499
0.490
0.485
0.484
0.600
0.472
0.472
0.469
0.458
0.437
0.550
0.421
0.415
0.398
0.392
0.376
0.376
0.500
0.366
0.368
0.364
0.362
0.352
0.338
0.337
0.331
0.323
0.450
0.315
0.311
0.310
0.294
0.282
0.400
0.350 Oligomer Budget
0.300 Oligomer Consumption
0.250
0.200
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
Jan-04
Feb-04
Mar-04
Apr-04
May-04
Jun-04
Jul-04
Aug-04
Sep-04
Oct-04
Nov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
S—Specific. When an action item is specific it is states of increased usage of recycled waste, both actually
•
improved. Linear regression analysis validated the
in very clear terms the action, result, or behavior that
relation between these performance indicators and
must be demonstrated or achieved.
the changed parameters as statistically insignificant.
• M — Measurable. A measurable action item includes
Each action item in the solution and its expected
information about how much or how well the
outcomes were checked for alignment with stake-
results, outcomes, actions, or behaviors should be
holders’ needs. Simulations validated the linkages
demonstrated.
between specific action items and stakeholders’
• A—Attainable. An attainable action item is one that
needs, indicating the proposed action plan would be
has a reasonable chance for completion given the
acceptable.
time, resources, and personal capabilities available.
They also may cause the team to stretch by taking
Evaluation Criteria Four: Project Buy-In,
on challenges that will bring out the members’
Implementation, Progress, Results
best efforts.
Although the team validated that all stakeholders
• R—Relevant. Clear links are needed between the action
would benefit in some way, there still were concerns
items, manager’s/supervisor’s goals, company’s goals, and resistance to implementing the action plan.
the company’s mission, the company’s values, and the Operations management was willing to contribute by
company’s vision. Each must support the other and increasing waste segregation, providing more training,
lead to the ultimate success of realizing the vision. and implementing other process improvements. That
• T — Time-based. A deadline is needed by which each group feared operational upsets would occur as a side
action item is achieved. Interim timelines also may effect of introducing contaminants along with the
be built into the action plan. recycled waste. The business group feared that the
Contrary to the general belief that plant yield and planned change would reduce product quality and
product quality might be adversely affected because increase market complaints.
38 THE JOURNAL FOR QUALITY & PARTICIPATION Summer 2006

Figure 6: Favorable Trends of Business Objectives Caused by the Project
High-Cost Raw Material
Oligomer Consumption Feedstock (RM) Cost Conversion Cost Production Cost
200
Oligomer Specific Consumption
0.70
Oligomer Consumption
1000 1000
175
Dollars/Meter
0.60
900 900
Dollars/Meter
0.50 150
$ / MT
800 800
0.40 700 700
125
0.30 600 600
GOOD
0.20 500 100 500
2003-04 2004-05 2005-06 Initial Cost 2003-04 2004-05 2005-06 Initial Cost
Cost Achieved Cost Achieved
Low-Cost Raw Material
Process Capability for
Polyester Recycled Waste Production Recycled Waste Process Plant Yield
2.00
1.00
Polyester Recycled Waste Consumption
1.5 100
30000 1.50
0.90
98
28000 1.00
Cpk Index
0.80
96
Percent
26000 0.50
Meters
0.70
94
24000 0.00
-0.43
0.60 92
22000 -0.50
GOOD
0.50 20000 -1.00 90
2003-04 2004-05 2005-06 2002-03 2003-04 2004-05 Earlier Later 2002-03 2003-04 2004-05
Overall, the main challenge for internal customers The team established a new measuring system,
was to maintain product quality and yield while which was strengthened by using statistical process
increasing the portion of recycled waste. This required control techniques. Regular analysis of process capa-
increased supervision, more training, modified stan- bility, the quality-loss index, and critical parameters’
dard operating procedures, and efforts to remove control charts supported corrective actions imple-
process bottlenecks. mentation. Figure 5 shows the improved trends in
Trials and field-change orders were used to ensure usage of recycled waste and oligomer.
the action plans were implemented as intended and Figure 6 indicates how the project favorably affected
on time. Each implementation step was reviewed for the company’s overall business objectives. Raw materials
completeness, and adjustments were made as necessary cost dropped by 10%, usage of recycled waste increased
to attain the required measurements. by 15%, chemicals cost dropped by 20%, and production
To sustain results, some software and hardware cost dropped by 11%. Productivity, process capability,
changes occurred. Process control strategies were and plant yield increased appreciably. Market complaints
formulated, procedures were modified, and opera- dropped by more than 70%, product quality increased
tional guidelines were established. Task force teams by 3%, and product exports increased by more than
were formed with polyester and feedstock suppliers, 50%. Additionally, the project contributed $4 million
and training on diverse technical and non-technical (U.S. dollars) per annum in monetary benefits.
matters took place. Intangible benefits included increased awareness
Similar procedural changes were implemented in of stakeholders` needs, increased employee morale,
the PET bottle collection process. Cooperation with and a positive effect on society. Reliance engaged in a
the community resulted in a better system for bottle meaningful partnership with an unorganized group
segregation, and training was provided as part of a of rag pickers, who would collect post-consumer use
well-defined responsible care program. waste PET bottles for recycling.
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The project also had a positive effect on the com-
Hari Bhatt is the vice president of logistics at Reliance
munity by increasing earnings of rag pickers and
Industries’ Hazira plant, joining the organization in
improving the quality of collected bottles, creating
1990. Bhatt earned his master’s degree in economics.
a win-win situation for all. In fact, the partnership
He has completed assignments in commissioning and
with the rag pickers resulted in their earnings shoot-
stabilizing warehouses and developed strategies in supply
ing up 150%! Most important, the changes improved
chain management. Bhatt can be contacted by e-mail
the local environment by adding value to the littered
at hari.bhatt@ril.com.
PET non-biodegradable waste.
Progress and results were frequently shared with
Neeraj Dhingra is general manager of manufacturing
stakeholders through regular team interactions and
operations at Reliance Industries’ PSF/PFF Hazira plant.
communications. Feedback provided by stakeholders
He is a chemical engineer by qualification and has 20
on the project’s impact was assessed and actions were
years of experience in manufacturing, technical projects,
taken to effectively close the loop.
and general management professions. He is a Six Sigma
Black Belt and is actively involved in TQM activities.
Evaluation Criteria Five: Team Management
Dhingra can be contacted by e-mail at Neeraj_Dhingra@ril.com.
As part of the selection process, team members
were evaluated regarding their capabilities. Specific
Akhilesh Jain is a technical manager at Reliance
knowledge on Six Sigma, quality tools, creativity,
and leadership were assessed. As the team conducted Industries’ PSF/PFF Hazira plant. He joined Reliance in
the improvement project, members were assigned 1977 and has held various positions in the technical
specific responsibilities according to their strengths. service department at Hazira for more than eight years.
Furthermore, analysis of the members’ strengths, Jain obtained his bachelor’s degree in chemical engineering
weaknesses, and opportunities for improvement guide from Harcourt Butlar Technical Institute—Kanpur
the education, training, and coaching provided. University. Jain can be contacted by e-mail at Akhilesh_ Jain@ril.com.
This project had representation from the entire
supply chain of the fiberfill business. The team had Sachin Kale is senior manager of operations in continuous
a perfect blend of members who brought essential polymerization at Reliance Industries’ PSF /PFF Hazira
traits and skills such as leadership, problem solving, plant. He has worked in polyester polymerization for
decision making, and team spirit to their work. 18 years and has core competencies in commissioning
and stabilizing large-scale continuous polymerization
Summary plants. For the past eight years, he’s also been involved
This project significantly reduced production costs in polyester recycling operations and is now establishing the balanced
and helped to achieve the company’s business objectives scorecard system at Reliance. Kale earned a bachelor’s degree in chemical
while simultaneously increasing team members’ capa- engineering. He can be contacted by e-mail at Sachin_Kale@ril.com.
bilities, satisfying stakeholders, and creating a cleaner
environment. At Reliance, the word “TEAMWORK”
Suketu Vakil is manager of operations, continuous
stands for “Together Everyone Accomplishes More
polymerization, at Reliance Industries’ PSF/PFF
With Organizational Responsibility and Knowledge.”
Hazira plant. He has worked in polyester polymerization
for the past 10 years. At Reliance he is actively involved
in polyester recycling operations and is also well versed in
SPC tools and techniques. Vakil earned his bachelor’s
degree in chemical engineering and can be contacted by e-mail at
Suketu_S_Vakil@ril.com.
40 THE JOURNAL FOR QUALITY & PARTICIPATION Summer 2006