Utkarsh: Productivity Enhancement Initiative at HPCL
Published globally at IIM Calcutta and Ivey Publishing. Authored by Prof. Bodhibrata Nag with protagonist Imtiyaz Arshad.
Abstract
In 2007, Hindustan Petroleum Corporation Limited (HPCL) was a Fortune 500 company and its LPG business was a major revenue generator. In 2007, HPCL faced severe issues of low productivity, huge backlog, poor industrial relations, and high absenteeism in its LPG bottling plants in the South Central Zone (SCZ). The management decided to implement a productivity enhancement initiative called 'Project Utkarsh' to address these issues. A Development Plan and a Competency Development Plan was put in place for the officers. This prepared them to take forward the change initiatives by using problem-solving techniques and involvement of workers.
The plant officers were also trained to assess workers' competency levels. After the workers were told about the need for initiating Project Utkarsh, a three-day training program was arranged at the Gitam Institute of Management (GITAM). The program, jointly designed by HPCL and GITAM, covered areas of behavioral competencies such as responsibility, accountability, dependability, 5S, self-discipline and housekeeping. Prior to the training at GITAM, a skills matrix exercise was undertaken for all workers.
To identify the opportunity areas for productivity improvement, a SWOT analysis was done for LPG plants for zone, infrastructure and market environment. After carrying out the SWOT analysis of all locations and problems in the generic categories of man, machine and method, the LPG plants were divided into three categories: "A" indicated minor problems, "B" indicated moderate problems and "C" indicated severe problems. The teams were formed such that they comprised workers with influence and expertise. Statistical tools, along with some processes of Six Sigma problem-solving techniques, were used to identify the root cause(s) and then arrive at appropriate solutions. Quality control tools such as Pareto analysis, control charts and histograms, two sample t-test, process capability, Six Sigma tools and qualitative tools such as cause-effect matrix, why-why analysis, line balancing, etc., were deployed.
The SCZ LPG Zone, that was almost at the bottom of the list of zones in India (2008-09) in terms of productivity, reached the top of the table by end of the year (March 2010). The improvement in productivity was about 20% in just one year (106.6% in March 2009 to 125.6% in March 2010). Encouraged by the achievement, it was decided to extend implementation of Project Utkarsh in all the other zonal plants.
In the year Project Utkarsh was implemented (2009-10), HPCL grew by 9.4% as against BPCL's 6.7%, pushing BPCL to the third position primarily due to growth in bottling volumes by 10.9%. All-India average production rate increased from 1,140 cylinders per hour to 1,222 cylinders per hour, a 7.2% increase in the year. HPCL further consolidated this gain and increased its market share since then.
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