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ZED – Zero Defect Zero Effect – An Opportunity for MSMEs to build Competitiveness

ZED Maturity Assessment Model

The ZED Maturity Assessment Model has been conceived and structured to offer graded benchmark levels of an organisation’s performance through a set of standard enabler and outcome parameters focusing on quality and environmental performances. It aims to rate and handhold all MSMEs to deliver top-quality products using clean technology.

  • The aim is to help MSMEs evolve and grow by providing them adequate training and funding to move up the value chain and produce quality products. The ZED model will sensitise MSMEs to emphasise delivery of high quality products with zero defects.

  • Clean energy will be a very important aspect of the model. Enterprises will be encouraged and hand-held to adopt clean technology into their processes to attain a sustainable growth trajectory.

  • There will be sector-specific assessment parameters for each industry such as food processing, textiles, leather, auto parts, etc.

“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”

How it Works

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.

Rating of EACH PARAMETER will be done as per the following:

Level Marks
Level 1 0
Level 2 2
Level 3 3
Level 4 4
Level 5 5

Proposed Rating Levels


An Example

Company A is being rated on 35 parameters
Of these 35 parameters:
On 18 parameters the MSME is at Level 5
On another 12 parameters it is at Level 4
On remaining 5 parameters it is at Level 3
Hence the scores will be calculated as follows:

Parameters Level Marks
18 5 90
12 4 48
5 3 15

Company A Rating:
(Total points / Applicable Levels): 153 / 35 = 4.37
And hence the Company A is a ZED Platinum Company

Assessment Criteria

Organizational Level
An organization applying to be evaluated using the ZED Maturity Model must demonstrate the following aspects. These aspects are only indicators and shall not be used for the assessment/rating of organizations.

Manufacturing capabilities
The organization shall acquire or develop manufacturing capabilities that enhance its ability to manufacture products in conformance with agreed specifications on a consistent basis taking into account all variations that may occur. The organization shall regularly review and upgrade its manufacturing capabilities in line with changing customer expectations and technologies. An organization meeting global manufacturing standards shall operate its manufacturing processes in a Lean – Six sigma environment, with ppm levels and operational efficiencies that match with the best in the world.

>Design capabilities
The organization shall develop or have access to design capabilities that will enable it to design, develop and constantly upgrade its products and service features to meet changing customer requirements and expectations. An organization meeting global design standards shall operate in a highly innovative environment with a fully evolved design capability aided with IT enabled design tools and a clear understanding of design processes such as DFSS, QFD, DFMA and TRIZ.

>Quality/Environment/Safety Assurance Systems
The organization shall develop and maintain quality, environment and safety assurance management systems that enable it to identify and address customer, environment and employee needs in a systematic manner, with a fully evolved process management system, clearly defined objectives and performance indicators that are fully integrated and synchronized to cater to the identified needs. The management system shall create an environment for the full realization of manufacturing capability, design capability and people and partnership potential to meet customer expectations, environment performance goals and safety standards. An organization operating at global standards shall have a single integrated management systems, which enables agility, flexibility, risk based decision making and enhances stakeholder confidence.

People development and engagement systems
The organization shall develop people competence and involvement commensurate with the identified organization capability to deliver product design, conforming product, environmental and safety performance at each maturity level. A highly matured organization shall have developed an environment where people are empowered, motivated, fully engaged, feel responsible to innovate and take ownership of products and environmental performance.

Standardization & Measurement systems for Quality and Environment
The organization shall develop and install dynamic framework of process and product standards and credible measurement systems that are aligned to provide true indicators of product and process performance, customer feedback, environmental impact and safety performance in real time, and enable quick and effective decision making. A highly mature organization integrates all measurements with business information systems that enable full control on current and predicted performance through the use of intelligent measurement and statistical tools.

Learning and Improvement systems
The organization shall develop a learning environment where management and people develop the habit of using and relying on data, trends and other internal and external information to understand and improve products, process performance, environmental and safety performance. A highly mature organization encourages and practices the capturing, dissemination and use of knowledge generated from internal and external sources to make improvements and sustain its growth, quality levels and environmental performance.

Legal compliances (Hygiene factor)
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. A mature organization shall have an agile system of identifying new regulatory requirements, regularly performing compliance audits and checks that are reviewed and monitored by the Board or equivalent.

Operational Level
An Organization applying to be evaluated on the ZED maturity model shall demonstrate and will be assessed on the following enablers and outcomes at the operational level in relation to Product Quality, Environmental performance and outcomes.

Click Here for Enabler Parameters

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