ZED certification for MSMEs - A Complete Overview

The MSME ZED certification (Zero Defect Zero Effect), introduced by the Indian government, encourages businesses to produce high-quality products with minimal defects while reducing their environmental impact.

With this certification, MSMEs can strengthen their processes, access new market opportunities, and build a strong reputation for quality and efficiency.

Keep reading to explore the key objectives of ZED certification, its benefits for MSMEs, and the eligibility criteria required to obtain it.

Overview of ZED Certification

The ZED certification aims to enhance the quality and sustainability of goods produced by MSMEs in India. It encourages them to adopt best manufacturing practices for producing goods with “zero defect” while ensuring “zero effect” on the environment. By meeting standards for quality, energy efficiency, and waste management, MSMEs can achieve greater operational efficiency and enhance their competitiveness, particularly in international markets.

Key Objectives of the MSME ZED Scheme

The primary objectives of the ZED scheme include:

• Encourage and enable MSMEs to manufacture high-quality products by adopting the latest technology and tools while continuously upgrading their processes to enhance productivity with minimal environmental impact.
• Develop an ecosystem to enhance competitiveness and support exports.
• Recognise and reward MSMEs for promoting the adoption of ZED practices.
• Incentivise MSMEs to achieve higher ZED certification levels.
• Increase public awareness to drive demand for sustainable, ZED-certified products.
• Assist the government in policy formulation and investment prioritisation by identifying key improvement areas.

Core Activities Under the ZED Certification Scheme

The ZED certification scheme includes a range of activities designed to help MSMEs improve their manufacturing practices and achieve sustainability. These core activities include:

• Programs for industry awareness
• Regional/state/national workshops
• Training the officials of DIs, DICs, and TCs
• Training Master Trainers, Assessors, and Consultants
• Assessment, certification, and surveillance
• Gap analysis and support for process improvement
• International benchmarking
• Financial support

Advantages of ZED Certification for MSMEs

The ZED Certification offers numerous benefits to MSMEs such as:

• Cost Efficiency: Implementing ZED practices leads to improved processes, often resulting in savings of up to 20% from reduced waste and optimised use of resources.
• Market Expansion: ZED certification enhances credibility, helping MSMEs unlock new business opportunities in both domestic and international markets, where adherence to strict quality standards is crucial.
• Increased Productivity: A focus on zero-defect production minimises scrap, rework, and rejects, thereby improving overall productivity and profitability.
• Government Incentives: ZED-certified MSMEs may qualify for government incentives such as financial assistance and subsidies, improving business viability.
• Improved Brand Perception: Achieving ZED certification strengthens a company’s reputation for quality, reliability, and sustainability, enhancing customer trust and satisfaction.

Eligibility Criteria for Obtaining a ZED MSME Certificate

To qualify for a ZED certification, the business must be classified as an MSME criteria and be registered on the Udyam portal.

Implementation Framework and Governance Structure

The ZED Scheme is implemented across the country through various organisations and agencies such as QCI, industry chambers such as CII, MSME-Development Institutes, Industry Associations, and other designated implementing bodies.

ZED Maturity Assessment Model Explained

The ZED Maturity Assessment Model evaluates MSMEs across multiple parameters, including Quality Management, Production Management, and Human Resource Management. The model categorizes businesses into five maturity levels, ranging from Learner to World-Class.

Ratings and Certification Levels in the

ZED certification is awarded at 3 levels based on an enterprise’s performance in quality, sustainability, and efficiency:

• Bronze: Level 1
• Silver: Level 2
• Gold: Level 3

MSMEs undergo a detailed assessment to determine their rating, which includes evaluating their compliance with quality standards, energy efficiency, and environmental practices. Each level represents a higher degree of adherence to the ZED standards. MSMEs must meet specific criteria at each level, demonstrating continuous improvement in their manufacturing practices. Achieving a higher level of certification indicates the MSME’s commitment to maintaining high standards and advancing toward global best practices.

Step-by-Step Process Flow of the ZED Scheme

The ZED process includes the following stages:

1. Online registration
2. Online self-assessment
3. Desktop assessment and analysis
4. Site assessment and rating OR gap analysis and support
5. Re-assessment

After the desktop assessment, MSMEs can choose between site assessment for certification or consultancy for improvement. Additionally, financial support is also available for adopting Zero Effect technologies.

Financial Assistance and Fee Structure Details

MSMEs can avail of subsidies ranging from 50% to 80% for different components of the ZED certification. The fee structure varies based on the size of the business.

*Please note that the fees are subject to change. For the most up-to-date details, refer to the official government sources.

Conclusion and Key Takeaways

The ZED certification empowers MSMEs to enhance product quality, minimise waste, and adopt sustainable practices, ultimately improving efficiency and competitiveness. It also opens doors to new business opportunities both locally and globally while strengthening brand reputation.

If you’re looking for financial support to expand your MSME operations or upgrade your technology, consider SMFG India Credit’s unsecured business loans of up to INR 75 lakhs*.Check your eligibility and apply online today to benefit from competitive interest rates and a hassle-free application process.