Case Study

Reliance Industries
Limited Wins Team
Excellence Award
Competition
Hari Bhatt,
Neeraj Dhingra,
Akhilesh Jain,
Sachin Kale, and
Suketu Vakil

eliance Industries Limited (RIL)

was set up by the farsighted
businessman Dhirubhai Ambani
(1932-2002) more than three
decades ago. RIL has emerged as
Indias largest private-sector enterprise and carved out a distinct
place for itself in global Fortune
500 companies. Reliances 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 founders vision.

The Hazira manufacturing units
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

www.asq.org

33

its efforts. Hari Bhatt, Neeraj Dhingra (project leader),

Akhilesh Jain, Sachin Kale, and Suketu Vakil comprised
the team. Sekhon Jagmohansingh served as the teams
facilitator and coordinated its participation in the
competition process.

The Reliance Industries Limited team celebrates its Gold Award in the
2006 International Team Excellence Award competition. Left to right:
Hari Bhatt, Akhilesh Jain, Suketu Vakil, Sachin Kale, and Neeraj Dhingra.

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 companys
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 companys 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

34

THE JOURNAL FOR QUALITY & PARTICIPATION Summer 2006

Evaluation Criteria One: Project Selection and

Purpose
Reliance is the worlds top polyester producer with
manufacturing facilities in India and abroad. Since
Reliance is the worlds 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 companys 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 Reliances 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 companys 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:
To produce polyester staple fiber and fiberfill per
market requirements in the most economical way
while achieving total customer satisfaction.
To work constantly to encourage employees to
develop professional competency and to accept
social responsibility through the companys safety,
environmental, productivity, and quality efforts.

Figure 1: Project Alignment With Organizational Core Objectives

Customer Satisfaction
Employee Satisfaction

Social Responsibility
Business Growth
Profitability

Organizational
Core
Objectives

Sustainability
Reliability

Business Core Objectives

Strategic Business Objectives

Goals Affected

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, Reliances four foundational values

trust, environmental friendliness, responsible care, and
ecological harmony all supported the teams work to
reduce the production cost of polyester fiberfill and
maximize the use of recycled polyester waste materials.
Figure 1 shows the companys core organizational objectives, which were affected positively by the projectmost
significantly customer focus (including quality, cost,
and complaint reduction), employee growth, process
reliability, and environmental care.
The projects key goals are listed below:
Reduce production costs by at least 5%.
Increase the waste recycling rate by 5-7%.
Continue Reliances commitment toward social
responsibility by conducting business in an
environment-friendly manner.
A cross-functional team was established at the
business-unit level. The team used various fact-anddata-based tools and improvement methods to determine the projects effect on performance, including
brainstorming, surveys, statistical process control,
and strategy mapping.
All agencies that had direct or indirect influence
on the project were identified as potential stakeholders and were questioned regarding their perspectives.

Stakeholders were involved in the processes of project

identification, evaluation, and also in ascertaining the
impact of a project on their businesses. Stakeholders
from the business group were more concerned about
profits, volume growth, and customer satisfaction/
loyalty while operations management placed greater
emphasis on productivity and waste recycling.
Evaluation Criteria Two: Current Situation
Analysis
The team formulated a tree diagram to portray the
cost drivers of fiberfill production and determined that
the main drivers were raw materials, chemicals, and utilities, while the sub-drivers were fiber waste, PET bottles,
oligomer, catalyst, toners, and other components.
Various other methods and tools were used to identify the root cause, such as cause-and-effect diagrams,
why-why analysis, regression analysis, and failure-modeand-effects analysis. Figure 2 illustrates the relation
diagram created by the team members to portray causeand-effect relationships and help them analyze the
natural links between different aspects of the complex
issue of high production cost for fiberfill. The diagram
connects the main issues of low quantity of recycled
waste and high consumption of oligomer, catalyst,
and toners with improper feedstock management,

www.asq.org

35

Figure 2: Relation Diagram

Improper
feedstock
management

No receipt
formulation
Contamination
in feedstock

Nonfunctional
drain and
vent valves

Poor
equipment
reliability
Upset in
plant

Low-cost finish
not available,
finish loss

High cost of
chemicals

High
throughput
variation
High
process
variability

Finish
applied
for feel

Control
properties
in product

Low
plant
yield

High oligomer
consumption

High finish
cost

Variation
in polymer
supply

Improper
filtration

high process variability and reaction severity, and poor

waste feedstock quality.
The team held brainstorming and consensus-building
sessions with process operators to identify the probable
underlying causes for these factors. Figure 3 shows the
results of a series of Pareto analyses of the main cost drivers, demonstrating once again that the ratio of oligomer
and toner to recycled waste was too high. The first Pareto
diagram indicates that raw materials are the highest
cost components in the process, as measured in rupees
per kilogram. When raw materials costs are broken
down further in the second Pareto diagram, oligomer
outranks the cost of monoethylene glycol (MEG) and
waste feedstock, and the cost of toner/optical brightener
is the most significant item in the third analysis.
Other analyses and tools used included the following:
Process capability studies of the oligomer, catalyst,
and toner materials showed their high consumption and poor process capability (high variability),
THE JOURNAL FOR QUALITY & PARTICIPATION Summer 2006

High b
color

Reaction
severity

Lower waste
consumption

Charging
sequence
time high

Nonavailability
of good quality
feedstock
More catalyst
dosing

High cost
of catalyst

Poor quality

Unskilled
labor

High raw
material cost

High PFF
production cost

Improper
design

36

Low pack
life

Improper
segregation

Low
viscosity
in flakes
Frequent
stoppages
in extruder

High dosing
of toners
High
moisture
in flakes

Improper
reaction

Constraint in
the air drying
unit system

High metallic
contamination

pointing toward a high potential for reducing their

cost impact.
Critical to quality (CTQ) elements were evaluated
and prioritized in reference to the companys balanced scorecard perspectives (customer, finance,
process, and learning). Maximizing the use of
recycled waste and reducing the use of oligomer
and toner were the major elements.
Failure-modes-and-effects analysis (FMEA) validated
these components as contributing most greatly to
production costs, and a risk priority number was
determined for each component based on its severity,
occurrence, and detectability ratings.
Ultimately, the team proved that the quality of
recycled waste feedstock was too variable and that
more expensive materials were used to compensate
for that variability. It became clear that the process
needed changes to eliminate the use of lower quality
recycled waste.

Figure 3: Pareto Analysis

FeedstockIncludes recycled waste, oligomer,

and monoethylene glycol (MEG)
ChemicalsIncludes toner, finish, catalyst,
and delusterant
UtilitiesIncludes power and steam

40

100

30

80
60

Oligomer

20

40

10

20
0

0
Oligomer Monoethylene
Glycol

Cumulative Percent

20
0
s

0.0
her

g
Pa

ck a

gin

ish
Fin

ies
Ch
an em
d C ica
ata ls
ly s
ts

ilit
Ut

k
oc
dst
Fee

Evaluation Criteria Three: Action Plan Development

The team developed a tree diagram to systematically
identify the best way to achieve the required improvement actions. Key actions were designed to increase the
amount of recycled waste in the recipe formulation and
reduce process variability by segregating feedstock more
effectively and decreasing reaction severity.
Possible approaches were considered, and data was
analyzed to validate their potential effectiveness. Figure 4
illustrates the teams final solution set. The following
actions were incorporated into the teams change plan:
Improve feedstock quality by segregating the type
and supplier of waste materials more effectively.
Control oligomer consumption by improving feedstock quality and filtration.
Reduce conversion cost by using lower cost chemicals
and reducing reaction severity.
Increase the waste recycle rate by 40% to reduce the
waste charging cycle time.

40

0.5

Ot

60

Toner

20

1.0

To
ner

40

80

60

Raw material

1.5

To
ner

80

O
Bri ptic
gh al
t en
er
De
lus
tr a
nt
Ca
t al
yst

40

100
Rupees/Kilogram

Rupees/Kilogram

100

20

Waste
feed

Secondary Level Number 2:

Chemicals and Catalyst Elements
Cumulative Percent

Primary Level:
Fiberfill Cost Drivers

Cumulative Percent

Rupees/Kilogram

Secondary Level Number 1:

Feedstock Elements

Figure 4: Final Solutions and Validation

Hard/soft waste
consumption

Flakes
consumption

Fiber waste

Monoethylene
glycol
consumption

Final
Solutions

Toner
consumption

Oligomer
consumption

Catalyst/finish
consumption

A group of stakeholders including site management,

internal customers, support functions and suppliers
assisted the team with developing the improvement
actions, ensuring stakeholders needs would be met.
Also, the team used the SMART process, as described
below, to guarantee that the selected solution would be
effective and efficient:

www.asq.org

37

THE JOURNAL FOR QUALITY & PARTICIPATION Summer 2006

0.770

0.767
Oct-05
0.311

0.310

Oct-05

Nov-05

Nov-05

0.759
Sep-05
0.331
Sep-05

0.782

0.785
Jul-05

Aug-05
0.337

0.294
Jul-05

Aug-05

0.736
Jun-05
0.338
Jun-05

0.718

0.708
0.362

Apr-05
0.352
Apr-05

May-05

May-05

0.729

0.686
Feb-05

Mar-05

0.376

0.368

Feb-05

Mar-05

0.702
Jan-05
0.392
Jan-05

0.747

0.737
Dec-04
0.323
Dec-04

Nov-04
0.315
Nov-04

0.755
Sep-04

Oct-04
0.366

0.282
Sep-04

Aug-04

Oct-04

0.707
Aug-04
0.398

0.693

0.604
Jun-04
0.421

Jul-04
Jul-04

Jun-04

May-04

Apr-04

Mar-04

Jan-04

Feb-04

Dec-03

Oct-03

Nov-03

Sep-03

Jul-03

Aug-03

Jun-03

May-03

SSpecific. When an action item is specific it is states

in very clear terms the action, result, or behavior that
must be demonstrated or achieved.
M Measurable. A measurable action item includes
information about how much or how well the
results, outcomes, actions, or behaviors should be
demonstrated.
AAttainable. An attainable action item is one that
has a reasonable chance for completion given the
time, resources, and personal capabilities available.
They also may cause the team to stretch by taking
on challenges that will bring out the members
best efforts.
RRelevant. Clear links are needed between the action
items, managers/supervisors goals, companys goals,
the companys mission, the companys values, and the
companys vision. Each must support the other and
lead to the ultimate success of realizing the vision.
T Time-based. A deadline is needed by which each
action item is achieved. Interim timelines also may
be built into the action plan.
Contrary to the general belief that plant yield and
product quality might be adversely affected because

38

0.376

0.583
May-04
0.499

0.586

0.578
Apr-04

Mar-04
0.490

0.485

0.563

0.623
Jan-04

Feb-04
0.517

0.458

0.667
Dec-03
0.415

0.659

0.645
Oct-03
0.484

Nov-03

0.469

0.437

Sep-03

0.472

0.668

0.636

0.636

Jul-03

Aug-03

0.472

0.553
Jun-03

May-03
0.548

0.364

Apr-03

0.645

0.747

Recycled Waste Baseline

Recycled Waste Consumption

Oligomer Budget
Oligomer Consumption
Apr-03

0.600
0.550
0.500
0.450
0.400
0.350
0.300
0.250
0.200

0.533

0.900
0.850
0.800
0.750
0.700
0.650
0.600
0.550
0.500

0.710

Figure 5: Major Cost Drivers Consumption Trends

of increased usage of recycled waste, both actually

improved. Linear regression analysis validated the
relation between these performance indicators and
the changed parameters as statistically insignificant.
Each action item in the solution and its expected
outcomes were checked for alignment with stakeholders needs. Simulations validated the linkages
between specific action items and stakeholders
needs, indicating the proposed action plan would be
acceptable.
Evaluation Criteria Four: Project Buy-In,
Implementation, Progress, Results
Although the team validated that all stakeholders
would benefit in some way, there still were concerns
and resistance to implementing the action plan.
Operations management was willing to contribute by
increasing waste segregation, providing more training,
and implementing other process improvements. That
group feared operational upsets would occur as a side
effect of introducing contaminants along with the
recycled waste. The business group feared that the
planned change would reduce product quality and
increase market complaints.

Figure 6: Favorable Trends of Business Objectives Caused by the Project

High-Cost Raw Material
Oligomer Consumption

Feedstock (RM) Cost

Conversion Cost

Production Cost

0.50
0.40
0.30
0.20
2003-04 2004-05 2005-06

1000
900
800
700

125
100

500

900
800
700
600
500

2003-04 2004-05 2005-06

Initial
Cost
Cost Achieved

Initial
Cost
Cost Achieved

Process Capability for

Recycled Waste Process Plant Yield

Production

2.00

1.00

100

28000

1.00

98

0.50

96

26000
24000

Percent

1.50

0.80
0.70

1.5

30000
Cpk Index

0.90

Meters

Polyester Recycled Waste Consumption

GOOD

150

600

Low-Cost Raw Material

Polyester Recycled Waste

1000

175
Dollars/Meter

0.60

Dollars/Meter

0.70

Oligomer Specific Consumption

$ / MT

GOOD

Oligomer Consumption

200

0.00

94

-0.43

0.60

22000

0.50

20000
2003-04 2004-05 2005-06

92

-0.50

90

-1.00
2002-03 2003-04 2004-05

Overall, the main challenge for internal customers

was to maintain product quality and yield while
increasing the portion of recycled waste. This required
increased supervision, more training, modified standard operating procedures, and efforts to remove
process bottlenecks.
Trials and field-change orders were used to ensure
the action plans were implemented as intended and
on time. Each implementation step was reviewed for
completeness, and adjustments were made as necessary
to attain the required measurements.
To sustain results, some software and hardware
changes occurred. Process control strategies were
formulated, procedures were modified, and operational guidelines were established. Task force teams
were formed with polyester and feedstock suppliers,
and training on diverse technical and non-technical
matters took place.
Similar procedural changes were implemented in
the PET bottle collection process. Cooperation with
the community resulted in a better system for bottle
segregation, and training was provided as part of a
well-defined responsible care program.

Earlier

Later

2002-03 2003-04 2004-05

The team established a new measuring system,

which was strengthened by using statistical process
control techniques. Regular analysis of process capability, the quality-loss index, and critical parameters
control charts supported corrective actions implementation. Figure 5 shows the improved trends in
usage of recycled waste and oligomer.
Figure 6 indicates how the project favorably affected
the companys overall business objectives. Raw materials
cost dropped by 10%, usage of recycled waste increased
by 15%, chemicals cost dropped by 20%, and production
cost dropped by 11%. Productivity, process capability,
and plant yield increased appreciably. Market complaints
dropped by more than 70%, product quality increased
by 3%, and product exports increased by more than
50%. Additionally, the project contributed $4 million
(U.S. dollars) per annum in monetary benefits.
Intangible benefits included increased awareness
of stakeholders` needs, increased employee morale,
and a positive effect on society. Reliance engaged in a
meaningful partnership with an unorganized group
of rag pickers, who would collect post-consumer use
waste PET bottles for recycling.
www.asq.org

39

The project also had a positive effect on the community by increasing earnings of rag pickers and
improving the quality of collected bottles, creating
a win-win situation for all. In fact, the partnership
with the rag pickers resulted in their earnings shooting up 150%! Most important, the changes improved
the local environment by adding value to the littered
PET non-biodegradable waste.
Progress and results were frequently shared with
stakeholders through regular team interactions and
communications. Feedback provided by stakeholders
on the projects impact was assessed and actions were
taken to effectively close the loop.
Evaluation Criteria Five: Team Management
As part of the selection process, team members
were evaluated regarding their capabilities. Specific
knowledge on Six Sigma, quality tools, creativity,
and leadership were assessed. As the team conducted
the improvement project, members were assigned
specific responsibilities according to their strengths.
Furthermore, analysis of the members strengths,
weaknesses, and opportunities for improvement guide
the education, training, and coaching provided.
This project had representation from the entire
supply chain of the fiberfill business. The team had
a perfect blend of members who brought essential
traits and skills such as leadership, problem solving,
decision making, and team spirit to their work.
Summary
This project significantly reduced production costs
and helped to achieve the companys business objectives
while simultaneously increasing team members capabilities, satisfying stakeholders, and creating a cleaner
environment. At Reliance, the word TEAMWORK
stands for Together Everyone Accomplishes More
With Organizational Responsibility and Knowledge.

40

THE JOURNAL FOR QUALITY & PARTICIPATION Summer 2006

Hari Bhatt is the vice president of logistics at Reliance

Industries Hazira plant, joining the organization in
1990. Bhatt earned his masters degree in economics.
He has completed assignments in commissioning and
stabilizing warehouses and developed strategies in supply
chain management. Bhatt can be contacted by e-mail
at hari.bhatt@ril.com.
Neeraj Dhingra is general manager of manufacturing
operations at Reliance Industries PSF/PFF Hazira plant.
He is a chemical engineer by qualification and has 20
years of experience in manufacturing, technical projects,
and general management professions. He is a Six Sigma
Black Belt and is actively involved in TQM activities.
Dhingra can be contacted by e-mail at Neeraj_Dhingra@ril.com.
Akhilesh Jain is a technical manager at Reliance
Industries PSF/PFF Hazira plant. He joined Reliance in
1977 and has held various positions in the technical
service department at Hazira for more than eight years.
Jain obtained his bachelors degree in chemical engineering
from Harcourt Butlar Technical InstituteKanpur
University. Jain can be contacted by e-mail at Akhilesh_ Jain@ril.com.
Sachin Kale is senior manager of operations in continuous
polymerization at Reliance Industries PSF /PFF Hazira
plant. He has worked in polyester polymerization for
18 years and has core competencies in commissioning
and stabilizing large-scale continuous polymerization
plants. For the past eight years, hes also been involved
in polyester recycling operations and is now establishing the balanced
scorecard system at Reliance. Kale earned a bachelors degree in chemical
engineering. He can be contacted by e-mail at Sachin_Kale@ril.com.
Suketu Vakil is manager of operations, continuous
polymerization, at Reliance Industries PSF/PFF
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 bachelors
degree in chemical engineering and can be contacted by e-mail at
Suketu_S_Vakil@ril.com.