6 minute read

ZED Best Practices Based on Version 2

Introduction & Background


Adopt Best Practices Through ZED to be Competitive in Emerging Markets.

Make in India.

What is the meaning of Make in India for you?

  • Made in India.
  • Consumed in India and in International Market.
  • Employment for Indian.
  • Participation of Indian People in the Economy.
  • Big MNC invest in India and collaborate with local vendors to make International Quality Products.

To Make in India initiative successful the only way is for Indian MSMEs to contribute and become partners to Indian or International Manufacturers or Service providers.

How to Make Indian MSME Competitive?

  • Reduce Operational Cost
  • Improve Quality

How to bring qualitative change in the Indian MSME

The answer to this question is ZED.

What is ZED

  • a unique & holistic Maturity Assessment Model for Micro, Small, and Medium Enterprises (MSMEs)
  • Includes Assessment, Rating and Handholding
  • Parameters in ZED model are related to production, design, quality, safety, environment, etc.

MSME Champions

  • Holistic Approach to unify, synergize and converge various schemes and Interventions with a single purpose.
  • The end objective is to pick up clusters and enterprises and
    • modernize their processes,
    • reduce wastage,
    • sharpen business competitiveness and
    • facilitate their National and Global reach and excellence.

Six Components of MSME Tech Upgradation Scheme.

  1. Zero Effect Zero Defect
  2. Lean Manufacturing Competitiveness Scheme
  3. Support for Entrepreneurial and Managerial Development of MSMEs through Incubators
  4. Building Awareness of Intellectual Property Rights (IPR)
  5. Design Expertise in Manufacturing MSME sector
  6. Digital MSME Scheme.

What is needed to do these?

  • Making MSME globally competitive in processes, technologies, and products
  • Training, capacity building, certifications, and handholding


  • These 6 schemes needed a different focus to integrate so that enterprises become competitive.
  • We also need to keep in mind changing market conditions and technologies in mind.

Benefit of ZED for MSMEs:

  • Aligning with best practices: Streamlined operations and lower costs
  • Superior quality, reduced rejection, and higher revenues
  • Easy access to Loans
  • Reducing negative effects on our environment: Increased environmental consciousness and social benefits
  • Awards & Rewards
  • Global Competitiveness: Part of the supply chain of national & international OEM
  • Credible & reliable vendor database: Credible recognition for international investors seeking investment in India
  • Visibility & brand recognition: “ZED Mark” to enable an MSME to be seen as a company with a difference

ZED Version 2 is for the Following Sectors

  • 10-Manufacture of food products
  • 11-Manufacture of beverages
  • 12-Manufacture of tobacco products
  • 13-Manufacture of textiles
  • 14-Manufacture of wearing apparel
  • 15-Manufacture of leather and related products
  • 16-Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials
  • 17-Manufacture of paper and paper products
  • 18-Printing and reproduction of recorded media
  • 19-Manufacture of coke and refined petroleum products
  • 20-Manufacture of chemicals and chemical products
  • 21-Manufacture of pharmaceuticals, medicinal chemical,s and botanical products
  • 22-Manufacture of rubber and plastics products
  • 23-Manufacture of other non-metallic mineral products
  • 24-Manufacture of basic metals
  • 25-Manufacture of fabricated metal products, except machinery and equipment
  • 26-Manufacture of computer, electronic and optical products
  • 27-Manufacture of electrical equipment
  • 28-Manufacture of machinery and equipment n.e.c.
  • 29-Manufacture of motor vehicles, trailers, and semi-trailers
  • 30-Manufacture of other transport equipment
  • 31-Manufacture of furniture
  • 32-Other manufacturing
  • 33-Repair and installation of machinery and equipment

ZED New Scheme

New Scheme Objective

  1. Openness: promoting innovation and lateral thought, leveraging technology, and bringing in transparency
  2. Smart Implementation: Bringing in procedural simplification, flexibility, digitization, efficient flows, active participation and increased data mining benefiting both the beneficiary and the executing agency. Further, a common Policy level structure and a common Programme Implementation Unit are envisaged.
  3. Unified and Coordinated approach: to bring in greater synergies with other schemes of M/oMSME and other Ministries and departments
  4. Outreach: intense promotion, lead generation, greater partnership with States and UTs, and continuous campaigns on electronic, digital, and print media.

The erstwhile three major segments of schemes (ZED, LEAN & others like Incubation Scheme, IPR Scheme, and Design schemes) are named as

  • MSME-Sustainable
  • MSME-Competitive
  • MSME-Innovative

ZED Parameters

  • 20 essential parameters
  • At least 10 other parameters (as per the MSMEs domain competency, i.e. sector of operation and type of industry).
  • In the new model, there are only 20 Parameters.

What are these Parameters?

  • Enabler for process quality
  • Enablers for emission, effluent & waste disposal activities
  • Enablers for resource management
  • Enabler on outsourced activity
  • Enabler of innovation, creativity & safeguarding
  • Outcome for overall company performance
  • Outcomes for quality performance
  • Outcomes for Process Performance
  • Outcomes for environmental performance

ZED Discipline

  1. Production Management
  2. Quality Management
  3. Environment Management
  4. Design Management
  5. Natural Resource Management
  6. Human Resource Management
  7. Intellectual Property Management
  8. Energy Management
  9. Safety Management
  10. Performance Management

Certification & Other Management System

  • QMS - ISO-9001
  • Environmental Management System - ISO-14001
  • Lean Manufacturing
  • Improvement - 5S, Kaizen
  • Clean Development Mechanism
  • Supply Chain Management
  • Energy Conservation
  • IPR

Variant of ZED Model

  • Generic
  • Machinery
  • Food processing
  • Chemical
  • Pharma
  • Electronic
  • Thermal power plant
  • Textile
  • Garments
  • Defence

MSME-Sustainable Parameters & ZED Certifications


  1. Leadership
  2. Swachh Workplace
  3. Workplace (Occupational) Safety
  4. Measurement of Timely Delivery
  5. Quality Management


  1. Human Resource Management
  2. Daily Works Management
  3. Planned Maintenance & Calibration
  4. Process Control
  5. Product Quality & Safety (Testing/Certification)
  6. Material Management
  7. Energy Management
  8. Environment Management
  9. Measurement & Analysis


  1. Supply Chain Management
  2. Risk Management
  3. Waste Management (Muda, Mura, Muri). 7 Defect (TIMWOOD - Transporation, Inventory, Wait, Over Processing, Over Production, Defect
    • Muda: identifying and eliminating waste
    • Mura: remove unnecessary variation
    • Muri: remove overburden
  4. Technology Selection & Upgradation
  5. Natural Resource Conservation
  6. Corporate Social Responsibility

Purpose of Parameters

These parameters Ensure and Improves

  • Outreach
  • Technology specific to domain
  • Risk Assessment
  • Quality System
  • Financial Discipline
  • Security, Safety & Confidentiality
  • Post-delivery and customer feedback
  • Design Discipline

Production Management (Aspects)

  • Waste Management
  • Swachh Workplace
  • Daily Work Management
  • Technology Upgradation
  • Low-Cost Automation
  • Planned Maintenance
  • Overall Equipment Effectiveness (OEE)
  • Plant Layout
  • Materials Management
  • Material Handling
  • Supplier Development
  • Outsourcing
  • Transport & Storage
  • Timely Delivery
  • Customer Education
  • Customer Servicing

How to Ensure these Parameters.

  • Plan: Plan activities related to the Parameters.
  • Deploy: Invest in infrastructure, Training, and executing the plan.
  • Monitor: Monitor the progress against the plan
  • Refine: Improve processes
  • Deliver Outcome

Categories of Parameters


  • Product Design for Quality
  • Product Design for Environment
  • Process Design for Quality


  • Pre-production Activities
  • Post Production Activities
  • Production and maintenance activities
  • Outsourced activities
  • Human Resource
  • Innovation and creativity

Performance Measure

  • Overall Company Performance
  • Environmental Performance
  • Process Performance
  • Quality Performance

Certification & Surveillance

Gap Analysis & Handholding

  • MSMEs with minimum Bronze certification are eligible to apply for handholding support.
  • A provision of up to Rs. 5 Lakhs (per MSME) has been made available for handholding and consultancy support for MSMEs under ZED Certification for assisting them to move towards Zero Defect Zero Effect solutions.
  • Out of this, an amount upto Rs. 2 Lakhs to be utilized for handholding support (as needed) through consulting organizations, and up to Rs. 3 Lakhs may be utilized towards technology upgradation for moving towards zero effect solutions/pollution control measures/cleaner technology.
  • The utilization of the Financial Support of up to Rs. 3,00,000/- for moving towards zero effect solutions will be subject to Consultant’s recommendations, verification by respective MSME-DI, and approval by the PMAC.


  • A surveillance assessment (after a period of 18 months of achieving ZED Certification) will be conducted by QCI’s Accredited Assessment Agencies as a part of the ZED Certification.
  • The surveillance assessment will only be applicable to those MSMEs which have achieved Silver & Gold Certification levels.
  • The surveillance assessment will be conducted as a remote assessment for both Silver & Gold levels and the cost of the assessment will be as under:
    • ZED Silver Level: Rs. 10,000/-
    • ZED Gold Level: Rs. 20,000/-

Renewal after the expiry of ZED Certificate:-

After the expiry of the validity of the ZED Certificate, MSMEs can go for Renewal of their ZED Certification level in order to continue availing associated benefits/incentives

ZED Version 1

ZED Version 2

Resources & References.