By : Alapati Bhaskar, Senior Consultant, McKinsey & Company
Source : http://www.ril.com
Activity: 2 comments 1422 views last activity : 07 03 2012 05:19:16 +0000
Reliance Group - A Happening Giant
A journey from a petrol pump attendant to creating the first Private Indian Fortune 500 Company, Reliance group is extremely inspiring....
I’ve heard a lot abt this company as my school teacher was a big fan of
Mr Ambani and he told me how our good efforts always pay back to us.
I hope u all would like it...................
The Reliance Group, is India's largest
private sector enterprise, with businesses in the energy and materials
value chain. The flagship company, Reliance Industries Limited, is a
Fortune Global 500 company and is the largest private sector company in
India. Backward vertical integration has been the cornerstone of the
evolution and growth of Reliance. Starting with textiles in the late
seventies, Reliance pursued a strategy of backward vertical integration
- in polyester, fibre intermediates, plastics, petrochemicals,
petroleum refining and oil and gas exploration and production - to be
fully integrated along the materials and energy value chain. The
Group's activities span exploration and production of oil and gas,
petroleum refining and marketing, petrochemicals (polyester, fibre
intermediates, plastics and chemicals), textiles, retail and spacial
economic zones. Reliance enjoys global leadership in its businesses,
being the largest polyester yarn and fibre producer in the world and
among the top five to ten producers in the world in major petrochemical
products.The Group exports products in excess of US$ 20 billion
to 108 countries in the world. Major Group Companies are Reliance
Industries Limited (including main subsidiaries Reliance Petroleum
Limited and Reliance Retail Limited) and Reliance Industrial
Key Success Factors of Reliance Group
Quality Management Systems
RIL continues to take quality improvement measures and strengthen quality management systems at all manufacturing locations.
An International Quality Benchmarking System is well in place in all our laboratories which assures best QMS for our entire product profile.
Employee participation in quality initiatives through Quality Circles has won several national awards.
Six Sigma initiatives have contributed to better quality, cost savings and customer satisfaction across all our sites.
Quality Loss Index – a statistical tool to enhance performance and productivity is in practice in all our labs.
Electronic Data Management System – A web based LIMS (Laboratory Information Management System) with process QMI (Quality Measuring Instruments) interlink is in place and operational.
The most advanced techniques and methods are followed by our analytical laboratories to provide reliable services. The in-house developed online Laboratory Information Management System (LIMS) is used extensively at all locations as part of the Quality Management System.
Research & Development
With the implementation of various multi-pronged initiatives at various R&D centers involving product, process and catalyst development projects, the research activities at Reliance received a major boost during the year. This effort was supplemented by sponsored and outsourced collaborative research programs with national and international institutes and labs to leverage expertise across boundaries. This has resulted in creating new business opportunities and intellectual capital rights, value enhancement, cost reduction through various technology and knowledge platforms.
Health, Safety and Environment (HSE) is a high priority issue at Reliance. The aim is to provide comprehensive health services covering preventive, promotive, curative and community health care services.
Further, the management’s vision to put safety of personnel above all, is evident from the policy statement, “Safety of persons overrides all production targets”. This vision drives the company to continuously look for ways to break new barriers in safety management for the benefit of all.
To establish a direction towards attaining world-class environmental management, the Company has identified key performance indicators such as material consumption, energy efficiency, GHG emission, air quality, ozone depleting substances, water consumption, waste water discharge, hazardous and non-hazardous waste generation and disposal.
Human Resource Development
One of the “Key” reasons for the exponential growth of Reliance is undoubtedly its “People”. Given the right environment and nurturing that is provided, time and time again seemingly “Ordinary” people surprise the company as they deliver “Extraordinary” results. This has indeed been the cornerstone of Reliance’s resounding success. While continuing to harness the limitless potential and capability of the Human Mind, Spirit and Energy, the Company constantly endeavours to provide a platform for individual opportunities and growth of its people across diverse businesses, manufacturing sites and services in multiple locations.
Social Responsibility & Community Development
Social welfare and community development is at the core of Reliance’s Corporate Social Responsibility (CSR) philosophy and continues to be a top priority for the Company. It revolves around the Company’s deeply-held belief in the principle of symbiotic relationship with the local communities, recognizing that business ultimately has a purpose - to serve human needs. Close and continuous interaction with the people and communities in and around the manufacturing divisions has been the key focus while striving to bring around qualitative changes and supporting the underprivileged.
Reliance’s contributions to the community are in the area of health, education, infrastructure development (drinking water, improving village infrastructure, construction of schools etc.), environment (effluent treatment, tree plantation, treatment of hazardous waste), relief and assistance in the event of a natural disaster, and miscellaneous activities such as contribution to other social development organizations etc. The Company’s CSR teams at all manufacturing divisions interact with the neighbouring community on regular basis. The Company takes pride in the fact that its CSR representatives are known by their first names in the regions that it operates.
Launch & Building of Reliance
Dhirubhai was born on December 28, 1932, to Hirachand Govardhandas Ambani and Jamunaben Hirachand Ambani. He was the middle of five children, three boys and two girls. His father was a local school teacher in a village called Chorwad in the Junagadh district of Gujarat. After his matriculation in 1949, Dhirubhai left for Aden(now in Yemen) at the young age of 17. His first job was to fill gas and collect money at a Shell petrol station, earning Rs 300 a month. Within a few years, he rose to the position of a sales manager in the same company.
After working for eight years in Aden, Dhirubhai decided to come back to India and start something on his own. On December 31, 1958, he came back to Mumbai and started the Reliance Commercial Corporation (RCC) with a borrowed capital of Rs.15,000. RCC was mainly involved in exporting commodities like ginger, cardamom, pepper, turmeric, and cashewnut. Using his connections in Aden, he exported a wide range of commodities to Aden. Aden, being a free port attracted lot of exports. In the mid 1960s, the Government of India (GoI) introduced an export promotion scheme under which the earnings from the export of rayon fabrics could be used for the import of nylon fiber. This attracted Dhirubhai's attention and he decided to switch from spices to textiles. In 1966, he set up a spinning mill at Naroda 20 kms from Ahmedabad with borrowed funds of Rs 2,80,000 and registered it (Reliance Textile Industries) as a powerloom unit with a paid up capital of Rs 150,000... he started Reliance at a time when most companies in India were owned by the government, and the private players were given step-motherly treatment by the government while offering licenses and permits
Another program, the High Unit Value Scheme introduced by the GoI in 1971 gave tremendous boost to Reliance textiles. The scheme allowed the import of polyester filament yarn against the export of nylon fabrics. RCC was benefited the most from this scheme and its exports constituted more than 60% of exports under this scheme. There were rumors that the scheme was solely devised for Dhirubhai. Dhirubhai strongly denied the allegations saying that Reliance cannot be blamed for taking advantage of the scheme ‘when others kept their eyes shut
The Stock Market Adventure
Dhirubhai's biggest contribution to the nation was the development of an equity culture. Having understood the psychology of the Indian capital markets and the mindset of Indian investors, he was instrumental in introducing the equity culture in India. Dhirubhai gave importance to the small investor and his contributions, and by doing so, he involved millions of middle class investors. Similarly, when most Indian business houses depended on government - owned financial institutions for funds, Dhirubhai raised capital from the public by offering shares of his companies...Reliance went public in 1977 and had its first annual general meeting (AGM) in 1977. Reliance Industries had 58000 investors in 1977..
In 2002, the Reliance group with a turnover of Rs 620 billion, assets worth Rs 564.85 billion, and a work force of over 85,000 people accounted for 5% of the Central Government's total revenue. It contributed 3 % of India's GDP, 5 % of the total exports, and 10 % of the GoI's indirect tax revenues. Dhirubhai took Reliance into various areas like petrochemicals, polyester filament yarn, oil and gas exploration and production, refining and marketing of petroleum, textiles, power, telecom services, information management and financial services.
After the death of Dhirubhai Ambani on 6th july 2002,(which Dhirubhai transformed Reliance from a company with a turnover of Rs 640 million in 1976, to one with a turnover of Rs 620 billion in 2002) Reliance had a split in 2003 between the Ambani brothers, Mukesh Ambani and Anil Ambani.
Mukesh Ambani (born April 19, 1957 in Yemen) is the world's 5th richest man, with a net worth of approximately $20.8 billion. Shri Ambani joined Reliance in 1981 and initiated Reliance’s backward integration from textiles into polyester fibres and further into petrochemicals, petroleum refining and oil and gas exploration and production.He is the chairman, managing director and the largest shareholder of Reliance Industries, India's largest private sector enterprise and a Fortune 500 company. In this process, he directed the creation of several new world-class manufacturing facilities involving diverse technologies that have raised Reliance’s petrochemicals manufacturing capacities from less than a million tonnes to about twenty million tonnes per year.
Shri Ambani directed and led the creation of the world’s largest grassroots petroleum refinery at Jamnagar, India, with a current capacity of 660,000 barrels per day (33 million tonnes per year) integrated with petrochemicals, power generation, port and related infrastructure.
Shri Ambani had set up one of the largest and most complex information and communications technology initiative in the world in the form of Reliance Infocomm Limited (now Reliance Communications Limited).
Shri Ambani is also steering Reliance’s initiatives in a world scale, offshore, deep water oil and gas exploration and production program, setting up of a second petroleum refinery at Jamnagar, development of infrastructure facilities and implementation of a pan-India organized retail network spanning multiple formats and supply chain infrastructure.
Reliance Industries Limited has ownership interests in the following subsidiaries - Reliance Petroleum Limited, Reliance Retail Limited, Reliance Fresh Limited, Reliancedigital Retail Limited, Reliance Hypermart Limited, Reliance Retail Travel & Forex Services Limited, Reliance Brands Limited, Reliance Wellness Limited, Reliance Footprint Limited, Reliance Chemicals Private Limited.
Shri Ambani’s accolades include:
- Bestowed the US-India Business Council (USIBC) ‘Global Vision’ 2007 Award for Leadership in 2007.
- Invited to be a member of the World Business Council for Sustainable Development (WBCSD). He is the only Indian CEO to be a Council Member of WBCSD.
- Conferred ‘ET Business Leader of the Year’ Award by The Economic Times (India) in the year 2006.
- Conferred the Degree Honoris Causa, Honorary Doctorate by the Maharaja Sayajirao University in 2007.
- Conferred the India Business Leadership Award by CNBC-TV18 in 2007.
- Received the first NDTV-Profit ‘Global Indian Leader Award’ from Hon’ble Prime Minister of India, Shri Manmohan Singh in New Delhi in the year 2006.
- Had the distinction and honour of being the cochair at the World Economic Forum in Davos, Switzerland.
- Ranked 42nd among the ‘World’s Most Respected Business Leaders’ and second among the four Indian CEOs featured in a survey conducted by Pricewaterhouse Coopers and published in Financial Times, London, in November, 2004.
- Conferred the World Communication Award for the ‘Most Influential Person’ in Telecommunications by Total Telecom, in October, 2004.
- Conferred the ‘Asia Society Leadership Award’ by the Asia Society, Washington D.C., USA, in May, 2004.
Shri Ambani is a member of the Prime Minister’s Council on Trade and Industry, Government of India and the Board of Governors of the National Council of Applied Economic Research, New Delhi. He is a member of the Indo-US CEOs Forum, the International Advisory Board of Citigroup, International Advisory Board of the National Board of Kuwait and McKinsey Advisory Council.
He is the Chairman, Board of Governors of the Indian Institute of Management, Bangalore and a member of the Advisory Council of the Indian Institute of Technology, Mumbai. He is also a member of the Advisory Council for the Graduate School of Business of the Stanford University.
Shri Ambani is the Chairman of Reliance Petroleum Limited and Reliance Retail Limited and a Director of Reliance Europe Limited, and Pratham India Education Initiative.
Reliance continues to cross newer & bigger milestones in its quest for what is known as "Growth is Life".
Anil Ambani (born June 4, 1959)is the world's fastest-growing multi-billion-dollar fortune in percentage terms as his wealth tripled in 1 year. As of October 2th 2008, his net-worth is estimated to be USD $12.5 billion.Anil Ambani heads Anil Dhirubhai Ambani Group with interests in telecom, power, natural resources, infrastructure and financial services with companies like Reliance Communications (RCOM), Reliance Capital (RCL), Reliance Energy (REL) and Reliance Natural Resources Ltd (RNRL), Reliance Power (RPower), Reliance Infrastructure (R Infrastructure Ltd) Reliance Big Entertainment (RBig), Reliance Health (RHealth), RelianceBPO (RBPO),NIS Sparta and Mudra Communications Ltd.
The total investors' wealth in the four Anil Ambani Group firms -- Reliance Communications (RCOM), Reliance Capital (RCL), Reliance Energy (REL) and Reliance Natural Resources Ltd (RNRL) has reached 1,42,384 crore rupees, while total promoter holding is estimated at about Rs 87,000 crore. Anil's wealth comes mostly from his over 65 per cent stake in RCOM, which has a market cap of about Rs 1,03,000 crore. He also has over 50 per cent in RCL (market cap of Rs 24,000 crore), 35 per cent in REL (market cap of Rs 12,700 crore) and close to 54 per cent in RNRL, which has a market cap of about Rs 2,600 crore.His net worth subsequently plunges by over 60% owing to poor stock market condition in India led by ADAG stocks.
What is that you are trying to ask here..you have given a good description, but in the end what is the debate all about.
Problems are every where and this problem solving is a process where one needs to check the loopholes first and then anzlyze them and rectifying it as early as possible and finally verification is also important at the end of the day and learning from...
Today the word is more Agile and being more and more lean, as the supply chain intelligence where more number of process are aligned to cut cost and predict forecast on the demand..nice information...thanks for sharing...