Overview of ZED Certification

Ministry of Micro, Small and Medium Enterprises (MSME) under the Government of India launched the Zero Defect Zero Effect, ZED Certification Scheme for the development of MSMEs in October 2016. It enables and facilitates MSMEs to adopt ZED practice and motivates and incentivises them to obtain ZED Certification. It also encourages them to become MSME Champions. Through this ZED Certification, they can reduce wastage substantially, increase productivity, save energy, optimally use natural resources, enhance environmental consciousness, expand their markets, etc. This scheme is totally focused on improving manufacturing culture and productivity.

ZED is basically based on the following principles:

• Zero Defect – production mechanisms where products have no defects.
• Zero Effect – production processes having no adverse environmental and ecological effects.

MSMEs get a subsidy on the cost of this ZED Certification only. Under the Scheme, MSMEs get subsidies as per the following structure:

• Micro Businesses: 80%
• Small Businesses: 60%
• Medium Businesses: 50%

There is an additional subsidy of 10% for the MSMEs owned by women, SC or ST businessmen or MSMEs in the North-Eastern Region, Himalayan, LWE, Island territories or aspirational districts. An extra 5% for MSME that is part of the SFURTI or Micro and small businesses- Cluster Development Programme (MSE-CDP) of Ministry.

ZED Certification Scheme is an integrated and comprehensive certification system. It accounts for productivity, quality, pollution mitigation, energy efficiency, financial status, human resources and technological depth, including design and Intellectual Property Rights (IPR) in products and processes. It aims to develop and implement the ZED Culture in India based on Zero Defect and Zero Effect principles. It also aims at enhancing the competitiveness of the MSME through proper assessment, hand holding, managerial and technological intervention, etc. it has two phases, out of which, Phase I focuses mainly on maximising inclusion of manufacturing MSMEs and taking them through the ZED journey, while Phase II entails the inclusion of services sector MSMEs and strives to integrate manufacturing and services sector MSMEs that are registered under a state government system. Phase II also makes provision to align ZED Certification with international certifications for its global acceptance. There are three levels of certifications, and they are gold, silver and bronze. The MSMEs registered with the UDYAM are eligible to participate in MSME ZED Certification.

Objectives of the ZED Certification Scheme

Following is a list of objectives of the ZED Certification Scheme:

• Creation of an ecosystem for Zero Defect Manufacturing in MSME.
• Promoting adaptation of Quality tools or systems and energy-efficient manufacturing.
• Encourage adoption of ZED practices and recognise the efforts of a successful MSME.
• Enabling MSME for manufacturing of quality products.
• By its graded incentives encourage MSMEs to achieve higher ZED Certification levels.
• Encouraging MSMEs to upgrade their quality standards in products and processes constantly.
• To raise public awareness about the importance of ZED products.
• Drive manufacturing with the adoption of Zero-Defect production processes and without impacting the environment.
• Supporting the Make in India campaign, identifying areas for improvement and assisting the Government with policies, decisions and investment prioritisation.
• Development of professionals in the area of ZED manufacturing and Certification.

Benefits of ZED Certification

Following are the benefits of obtaining the ZED Certification:

• Easy access to loans

For their business expansion, MSMEs require financials and support for the cause; RBI has advised the Indian Banking Association (IBA) to incorporate information on ZED in the MSME loan application form.   

• Credible and Reliable Vendor database 

ZED ensures that the companies investing in India have a ready-made and reliable vendor base to support their activities, the MSMEs rated under this ZED Certification Scheme. 

• Reducing Adverse Effects on the Environment 

Enhanced environment consciousness making them Responsible Manufacturers. 

• Awards and Rewards

High-performing ZED units are recognised nationally by the Ministry of MSME and QCI through an award and reward system that helps them to showcase themselves globally. 

• Aligning with Best Practices 

MSMEs get an opportunity to do benchmark studies and learn best practices across the globe under the ambit of the ZED Certification Scheme. 

• Global Competitiveness 

Enhanced competitiveness of the vendors of both countries in the global market so that the goods manufactured have no defects and thus leveraging the benefits of quality and cost optimisation.

• Visibility & Brand Recognition 

A ZED Mark enables an MSME to be deemed a company with leverage over a non-rated MSME unit.

• Other benefits

Other benefits of having ZED certification are better quality products and thus attracting more customers, improved profits, reduced costs, increased investments, and a boost to start-up culture.

Documents Required for Obtaining ZED Certification

Following are the documents required while obtaining ZED Certification:

• Photos of products
• Nate of entrepreneur/businessman
• Social category
• Special category
• Name of business/enterprise
• Date of commencement of business/enterprise
• Registration Number
• Contact information
• NIC (National Industry Classification) Code
• Category of the unit as per CPC (Central Pollution Control)
• Persons employed
• Shop floor
• Fire Safety Systems
• Product Labelling
• Product Description
• Type of MSME
• Supplier to Defence
• Undertaking

Procedure for Obtaining ZED Certification

The procedure required for obtaining the ZED Certification is as follows:

• First, the applicant has to take a ZED pledge, after which any MSME (applicant) can apply for any certification level (gold, silver or bronze).
• The applicant must conform to all requirements of the level applied to get the ZED Certification.
• Applicant embarking on the journey of ZED has to submit relevant information and documents along with the Undertaking.
• In case of any non-conformity, the applicant is given an opportunity to close the non-conformity within the prescribed time limit to be eligible for the ZED Certification.
• Final ZED Certification is issued based upon the findings and recommendations of the Accredited Assessment Agencies.