Financial Support to MSMEs in ZED Certification Scheme A scheme by

INTRODUCTION TO THE SCHEME “ “Our manufacturing should have ZERO DEFECT so that our products should not be rejected in the global market. We must also keep in mind that our manufacturing is done with ZERO EFFECT so that it does not have any negative impact on our environment.” - August 15, 2014 “ “The Government has decided to implement the ZED Certification Scheme for 22,222 MSMEs unit with a total budget of Rs. 491 Crores (including Government of India contribution of Rs. 365 Crores) during the 12th Five Year Plan”

THE ZED JOURNEY Release of Funds for Pilot Project by DIPP ZED model conceptualized Pilot Project report released Scheme NOTIFIED SFC Meeting conducted Sep ‘14 Mar ‘15 Dec ‘15 Feb ‘16 11-Jul ‘16 Jan ‘15 May ‘15 Jan ‘16 Jun ‘16 22-Aug ‘16 First draft of the ZED Model prepared Ministry of MSME initiated Scheme approval process Pilot Project Completed Guidelines prepared by MoMSME First SSC meeting

The Scheme FINANCIAL SUPPORT TO MSMEs IN ZED CERTIFICATION SCHEME Name The Scheme is an extensive drive of the Government of India to enhance global competitiveness of MSMEs by providing them financial support in assessment, rating and handholding of its manufacturing processes on Quality and Environment aspects

A Message from Shri Kalraj Mishra, Hon’ble Minister of MoMSME

A Message from Shri Giriraj Singh, Hon’ble Minister of State, MoMSME

A Message from Shri Haribhai Parthbhai Chaudhary, Hon’ble Minister of State, MoMSME

PILOT PROJECT (Completed in Jan, 2016) Roadmap National Rollout Scale-up Pilot Project to test ZED Model Evolve an ecosystem around ZED Test existing value proposition and reveal deficiencies Financial Support through subsidy by MoMSME Assess, rate and handhold 22,222 MSMEs units in the next 2-3 years Finalize value proposition for the ZED Scheme Build Capacities and capabilities to Scale-up the model Target to cover 1.25 mn MSMEs in the next 5-7 years

Guidelines of the Scheme – An overview “The Government has decided to implement the ZED Certification Scheme for 22,222 MSMEs unit with a total budget of Rs. 491 Crores (including Government of India contribution of Rs. 365 Crores) during the 12th Five Year Plan” Scheme budget To create proper awareness in MSMEs about ZED manufacturing and motivate them for assessment of their enterprise for ZED rating To drive manufacturing with adoption of Zero Defect production processes without impacting the environment (Zero Effect) To encourage MSMEs to constantly upgrade their quality standards in products and processes To support “Make in India” campaign Objectives Industry awareness programs, regional / state / national workshops, training of officials of DIs, TCs, DICs Training and certification of Assessors & Consultants Online systems including e-platform for assessment and e-content for awareness & training Assessment, Rating & Certification Gap analysis & Handholding for improving rating International Benchmarking Activities The ZED Scheme will allow MSMEs to avail many tangible and intangible benefits

Methodology Awareness & Training Through Implementing Agencies like QCI, NPC, Chambers, MSME-DIs, MSME Technology Centers, Industry Associations, BEE, etc. To develop e-learning modules for capability building Third Party Site-Assessment Only through ZED Certified Assessors of accredited Credit Rating Agencies, Certification Bodies, etc. Online auto-allocation of assessors and monitoring of Assessment process Tab based Site-Assessments Third Party Consultancy (Gap Analysis & Handholding) Only through ZED Certified Consultants of accredited Consulting Agencies/Bodies, etc. Online auto-allocation of consultants and monitoring of Consulting process Tab based reporting of Site-Visits Certification Final Rating and Certificates to be issued by QCI

Routine functionalities Scheme Governance SSC (Screening and Steering Committee) chaired by Development Commissioner of MSME to guide, review, monitor and provide overall direction for implementation of the scheme Quality Council of India (QCI) to function as the NMIU (National Monitoring and Implementing Unit) for the scheme Routine functionalities Overall guidance and direction Screening and Steering Committee (SSC) O/o DC-MSME Facilitation, Implementation, Coordination & Monitoring National Monitoring and Implementing Unit (NMIU) QCI Implementing Agencies Rating & Other Agencies Consultants & Consulting Bodies QCI, NPC, Chambers, Associations, Field Offices and Autonomous Bodies of DC (MSME), BEE, etc will act as Implementing Agencies

What is ZED Certification Rating obtained on ZED Maturity Assessment Model An MSME will be rated on a scale of 5 For example, after the site-assessment, if the weighted average score obtained by an MSME is 78 on 30 parameters, then the average weighted score is 78/30 which equals 2.60. This score corresponds to the rating of Silver as explained. The ZED Model has 50 parameters and the Unit will be assessed on a minimum of 30 parameters, including 20 mandatory parameters Additional 25 parameters for MSMEs supplying to Defence Sector PLATINUM >4.0 DIAMOND >3.5 upto 4.0 Each parameter comprises of 5 Maturity levels Level 1 Struggler Level 2 Beginner Level 3 Organized Level 4 Achiever Level 5 World Class GOLD >3.0 & upto 3.5 SILVER >2.5 & upto 3.0 BRONZE >2.2 & upto 2.5 <2.2 No rating

The ZED Model (1/2) The organization shall have a policy of no tolerance for any non-compliance with statutory and regulatory requirements related to product quality, environment and safety. An MSME WILL NOT BE ELIGIBLE to go for ZED Certification if the legal & regulatory compliances are not followed. ZED maturity assessment model will evaluate an MSME’s manufacturing unit on process based enablers and performance based outcome parameters at the operational level Process Design for Quality ENABLER FOR PROCESS QUALITY Pre-production or start-up activities Production & maintenance activities Product Design for Quality Post Production activities Process Design for Environment Management ENABLERS FOR EMISSION, EFFLUENT & WASTE DISPOSAL ACTIVITIES Pre-production (startup activities) for Environment Management Production and Maintenance activities Product Design for Environment Post Production activities

The ZED Model (2/2) Enablers for resource management Facility Enablers for resource management Human Resource Outcomes for quality performance Outcomes parameters Outcomes for Process Performance Outcomes for environmental performance Outcome for overall company performance Selection control and improvement of outsourced organizations. Enabler on outsourced activity Risk Assessment Technology specific to defence Financial Discipline Defence Quality System Post delivery and customer feedback Design Discipline Security, Safety & Confidentiality Defence Outreach Additional Disciplines for ZED Defence Trademark Enabler on innovation, creativity & safeguarding Industrial Design Copyright Patent

An Example of an enabler parameter and assessment levels Systems for abatement of Effluent, Emission and Solid Waste This parameter comes under the enabler of Process Design for Environmental Management and assesses the design plant & equipment and processes as an integral part of manufacturing or service delivery systems

An Example of an outcome parameter and assessment levels Safety Score This is a parameter which comes under the outcome for overall Company performance

Process flow for ZED rating Broad activities Online Registration by MSMEs 1 Registration MSMEs to self-assess based on ZED parameters 2 Online Self-assessment Assessment based on documents submitted by MSMEs 3 Desktop assessment 7 Steps towards ‘Excellence’ On-site assessment of only MSMEs, selected in Desktop Assessment 4 Site assessment Final ZED rating and certificate (valid for 4 years) 5 ZED rating & certification Option to avail services of gap analysis & handholding 6 Gap analysis & handholding On-site surveillance 2 times in a cycle 7 Surveillance

Benefits of ZED Scheme for MSMEs Credible recognition for international investors seeking investment in India Part of supply chain of national & international OEMs Streamlined operations and lower costs Superior quality, reduced rejection and higher revenues Increased environmental consciousness and social benefits ZED Mark to enable an MSME to be seen as a company with a difference Other benefits expected to be announced by the Government in the near future

Surveillance Fee to be paid by MSMEs will be decided in due course Financial Support to MSMEs by Government Micro: 80%, Small: 60%, Medium: 50% Total Cost Cost to MSMEs according to its Type 1 Registration & Online Self-assessment Micro Small Medium No Cost No Cost No Cost 2 Desktop assessment Rs. 10,000/- Registration & Assessment Micro Small Medium Rs. 2000/- Rs. 4000/- Rs. 5000/- Micro Small Medium Rs. 16000/- Rs. 32000/- Rs. 40000/- 3 Site assessment Rs. 80,000/- 4 Additional Defence Rating Rs. 40,000/- Micro Small Medium Rs. 8000/- Rs. 16000/- Rs. 20000/- TOTAL ASSESSMENT COST to MSME Rs. 26000/- Rs. 52000/- Rs. 65000/- Consulting & Re- Assessment 5 Gap analysis & handholding (optional) Rs. 1,90,000/- Micro Small Medium Rs. 38000/- Rs. 76000/- Rs. 95000/- 6 Re-assessment/Re-rating Rs. 40,000/- Micro Small Medium Rs. 8000/- Rs. 16000/- Rs. 20000/- Additional Subsidy of 5% for MSMEs owned by SC/ST/Women & MSMEs located in NER and J&K Certification Costs are included in Site-assessment, Defence Rating and Re-assessment components Surveillance Fee to be paid by MSMEs will be decided in due course

Online Registration – 2 Step Process Register free on the online portal of ZED, www.zed.org.in, using the following link: http://assessment.zed.org.in/Assessment/Assessment_BeforeLogin.aspx using a valid (Indian) mobile number and email address. Step 1 Email: Mobile: Proceed Step 2 Submit Enter OTP: Name of Enterprise: Name of Entrepreneur: Address: EM-I/EM-II/SSI/UAM/Other Registration Number Type of MSME: Email Confirmation Thank you for registering with ZED. Your unique ZED ID is ZEDQCI00000x

A roadmap to global competitiveness www.zed.org.in zed@qcin.org 011-23321273 ZED_QCI