WELCOME TO THE

PRESENTATION ON

ZED(Zero defect zero effect)

scheme IMPLEMENTATION
IN MSME’S

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History of ZED
• Addressing the nation on India's 68th Independence Day, Hon'ble
Prime Minister Shri Narendra Modi urged the industry, especially
the Micro, Small and Medium Enterprises (MSMEs) of India, to
manufacture goods in the country with "zero defects" and to ensure
that the goods have "zero effect" on the environment.

• We must set up market linkages and create intermediaries to

develop the capacity of MSMEs to facilitate their technology,
marketability, backward and forward linkages etc. Worldwide,
Micro, Small and Medium Enterprises (MSMEs) have been accepted
as the engine of economic growth and equitable development.
MSMEs constitute over 90% of the total number of enterprises in
most economies and are credited with generating the highest rates
of employment growth and account for a major share of industrial
production and exports.

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ZED Model
• ZED has presented a model where the concept of quality has a
holistic change from a tool for compliance to a source of
competitiveness.
• It is meant to evolve from a total dependency on inspection of the
final product to correct defects, to a proactive process of improving
processes like quality planning, product and process designing,
optimum processes, efficient resource management, effective
outsources activities and breakthrough outcomes.
• Along with a focus on quality of products and services, there is an
equal emphasis on the elimination of impact on the environment
through adequate planning at product and process design, pre-
production (start-up activities), production and maintenance
activities, post production (disposal after use) and outcome of
environment performance. Overall, the net result is sustainable
development.

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ZED Scheme
• The ZED scheme is an integrated and holistic certification system
that will account for quality, productivity, energy efficiency,
pollution mitigation, financial status, human resource and
technological depth including design and IPR in both products and
processes.
• The parameters of the scheme will cover all aspects of the existing
schemes of Ministry of MSME: Quality Management System (QMS)
/ Quality Technology Tools (QTT), Lean Manufacturing
Competitiveness Programme (LMCS), Design Clinic and Technology
and Quality Up-gradation (TEQUP), and Building Awareness on
Intellectual Property Rights (IPR).
• The ecosystem around ZED model is calibrated to make aware,
assess, rate, counsel, handhold, re-assess & certify MSMEs and
ensure that they rise up the ZED ladder, thus enhancing their
competitiveness in the global marketplace and making them an
important cog in the wheel in the “MAKE-IN-INDIA” campaign.

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VISION & MISSION
The Model shall be applicable for all sectors of manufacturing
industries with focus on MSMEs and small businesses and will address
the quality and ecological needs of domestic and overseas customers,
society, employees, partners, regulators, and investors.
VISION
To enable the advancement of Indian industry to a position of
eminence in the global marketplace and leverage India’s emergence as
the world’s supplier through the ‘Made in India’ mark.
MISSION
To develop and implement a ‘ZED’ culture in India based on the
principles of:
• Zero Defect (focus on customer)
• Zero non-conformance/non-compliance
• Zero waste Zero Effect (focus on society)
• Zero air pollution/liquid discharge (ZLD)/solid waste
• Zero wastage of natural resources

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The scheme envisages promotion of Zero Defect and Zero Effect (ZED)
manufacturing amongst MSMEs and ZED Assessment for their
certification with the following objectives:

• Developing an Ecosystem for Zero Defect Manufacturing in MSMEs.

• To promote adaptation of Quality tools/systems and Energy Efficient
manufacturing.
• To enable MSMEs for manufacture of quality products.
• To encourage MSMEs to constantly upgrade their quality standards in
products and processes.
• To drive manufacturing with adoption of Zero Defect production
processes and without impacting the environment.
• To support 'Make in India' campaign.
• To develop professionals in the area of ZED manufacturing and
certification.

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PARAMETERS
The MSMEs will be assessed & rated only on defined enabler &
outcome parameters on operational level indicators while the
organizational level indicators are also useful pointers towards
implementing a ZED Maturity Assessment Model at the operational
level. These indicators may include:

• Manufacturing capabilities
• Design capabilities
• Quality/Environment/Safety assurance systems
• People development and engagement systems
• Standardization and measurement systems for quality and
environment.
• Learning and improvement systems
• Legal compliances (hygiene factor)

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An MSME applying to be evaluated on the ZED Maturity Assessment
Model shall demonstrate and will be assessed & rated on the following
parameters at the operational level:

• Enablers for Product Quality

• Enablers For Emission, Effluent and Waste Disposal Activities
• Enablers For Resource Management
• Outcomes

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ZED Maturity Assessment Model
ZED Maturity Assessment Model is an integrated and holistic
Certification System, which accounts for processes related to:
• Production Management
• Quality Management
• Design Management
• Safety Management
• Environmental Management
• Energy Management
• Natural Resource Management
• Human Resource Management
• Intellectual Property Management
• Performance Management

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ASSESSMENT CRITERIA
There are 50 parameters on which the MSMEs will be assessed and
rated.
The MSME applicant is required to comply with identified 20 essential
parameters & at least 10 other parameters (as per the MSMEs domain
competency, i.e. sector of operation and type of industry). Hence, the
MSMEs will be rated on a minimum of 30 parameters.

MSMEs may seek ZED rating on more than 30 parameters as per the
processes and systems available at the MSME.
• Each parameter has 5 levels.
• The Rating is based on a weighted average level.
• The company is encouraged, handheld and trained to achieve a
higher level for each parameter and thus elevate itself in the
maturity model.

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Stage for ZED Implementation
• ONLINE SELF ASSESSMENT
• DESKTOP ASSESSMENT
• SITE ASSESSMENT
• ZED RATING & CERTIFICATION

• GAP ANALYSIS & HANDHOLDING

• SURVEILLANCE

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Quality Management and ZED
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ZED PROCESS FLOW

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 World Class Manufacturing
• Safety (Occupational)
• Cost Deployment (Distribution of cost)
• Focused Improvement
• Autonomous maintenance
• Work Place Organization
• Professional maintenance
• Quality Control
• Logistic and Customer Services
• People development
• Early Equipment management
• Environment and Energy

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22,222 MSMEs will be given financial assistance for opting ZED
assessment and certification.
The assessment process consists of three stages as under:
i) Online (e-Platform) self assessment: Nil Fee
ii) Desk Top assessment : Rs 10,000/-per MSME
iii) Complete assessment :
(a) Rs 80,000/- for ZED rating per MSME
(b) Rs 40,000/- for additional ZED Defence rating
(c) Rs 40,000/- for Re-rating
Above rating costs will include cost of Rs 10,000/- as certification
cost by QCI.
iv) Subsidy for Micro, Small & Medium Enterprises will be 80%, 60%
and 50% respectively. However, preference will be given to small
enterprises to enable them to grow bigger because of competition
and to get reasonable economy of scale. The number of micro
enterprises shall not be more than 50%. There will be special
emphasis on SC/ST entrepreneurs.
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Subsidy for ZED Implementation
• Subsidy for Micro, Small & Medium Enterprises will be 80%, 60%
and 50% respectively. However, preference will be given to small
enterprises to enable them to grow bigger because of competition
and to get reasonable economy of scale. The number of micro
enterprises shall not be more than 50%. There will be special
emphasis on SC/ST entrepreneurs.
• Total subsidy for an MSME for all the components of subsidy under
the scheme will be restricted for Rs. 3.145 lakh for Micro, 2.405 lakh
for Small and Rs. 2.035 lakh for medium for a period of next five
years.

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Benefits of ZED
• Easy access to Loans: For business expansion, MSME do require
financials, and to support the cause RBI has issued an advisory to
Indian Banking Association(IBA) to incorporate information on ZED in
the MSME loan application form which has been followed.
http://iba.org.in/advertisement1.asp

• Credible & reliable vendor database: ZED will ensure that the
companies investing in India have a ready-made & reliable vendor base
to support their activities the MSMEs rated under ZED Certification
Scheme

• Reducing negative effect on our environment: Enhanced environment

consciousness making them “Responsible Manufacturers”

• Awards & Rewards: High performing ZED units will be recognized

nationally by the Ministry of MSME and QCI through an award &
reward system which will help them to showcase themselves globally

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• Aligning with best practices: MSMEs will get an opportunity to do
benchmark study and learn the best practices across the globe
under the ambit of ZED Certification Scheme.

• Global Competitiveness: Enhanced competitiveness of the vendors

in the global marketplace so that goods manufactured have no
defects and thus leveraging the benefits of quality & cost
optimization.

• Visibility & brand recognition: A “ZED Mark” to enable an MSME to

be seen as a company with a leverage over non-rated MSME units.

• Other benefits expected to be announced by the Government in

the near future

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THANK YOU

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