Brief History

Addressing the nation on India's 68th Independence Day, Hon'ble Prime Minister Shri Narendra Modi urged the industry, especially the Micro, Small and Medium Enterprises (MSMEs) of India, to manufacture goods in the country with "zero defects" and to ensure that the goods have "zero effect" on the environment.

"We should manufacture goods in such a way that they carry zero defect and that our exported goods are never returned to us. We should manufacture goods with zero effect that they should not have a negative impact on the environment".

With an aim to make India a global manufacturing hub, the Prime Minister gave an open invitation to manufacturers and investors across the world to establish manufacturing units in India.

"I want to appeal to the entire people world over, "Come, make in India", "Come, manufacture in India". Sell in any country of the world but manufacture here. We have got skill, talent, discipline, and determination to do something," he said. He further said "We want to give the world a favourable opportunity that come here, "Come, Make in India" and we will say to the world, from electrical to electronics, "Come, Make in India", from automobiles to agro value addition "Come, Make in India", paper or plastic, "Come, Make in India", satellite or submarine "Come, Make in India". Our country is powerful. Come, I am giving you an invitation," he said."As I say to the world "Come, Make in India", I say to the youth of the country – it should be our dream that this message reaches every corner of the world, "Made in India". This should be our dream," added the PM.

Ensuring competitiveness of India's MSME is critical as it will contribute to the overall growth of the manufacturing sector and the country's economy. International companies competing in global markets focus on their competitive strengths of costs acceptable to the market, technology, innovation, service delivery, lean manufacturing, and defect free products for Zero Defect and Zero Effect (ZED). We must quickly set the pace for the template of industrialization and export fuelled growth to make a mark in global markets and improve our GDP. At present our GDP (14%) is only a little below the average for lower middle-income countries (15.80%) and significantly below the average for upper middle-income economies (23.05%).

We must set up market linkages and create intermediaries to develop the capacity of MSMEs to facilitate their technology, marketability, backward and forward linkages etc. Worldwide, Micro, Small and Medium Enterprises (MSMEs) have been accepted as the engine of economic growth and equitable development. MSMEs constitute over 90% of the total number of enterprises in most economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports.

ZED has presented a model where the concept of quality has a holistic change from a tool for compliance to a source of competitiveness. Operationally, it is meant to evolve from a total dependency on inspection of the final product to correct defects, to a proactive process of improving processes like quality planning, product and process designing, optimum processes, efficient resource management, effective outsources activities and breakthrough outcomes. Along with a focus on quality of products and services, there is an equal emphasis on the elimination of impact on the environment through adequate planning at product and process design, pre-production (start-up activities), production and maintenance activities, post production (disposal after use) and outcome of environment performance. Overall, the net result is sustainable development.The ZED scheme is an integrated and holistic certification system that will account for quality, productivity, energy efficiency, pollution mitigation, financial status, human resource and technological depth including design and IPR in both products and processes. The parameters of the scheme will cover all aspects of the existing schemes of Ministry of MSME: Quality Management System (QMS) / Quality Technology Tools (QTT), Lean Manufacturing Competitiveness Programme (LMCS), Design Clinic and Technology and Quality Up-gradation (TEQUP), and Building Awareness on Intellectual Property Rights (IPR).

Recent policy instruments and market interventions in both public and private spaces starting with the implementation of Public Procurement Policy for MSMEs (which mandates CPSUs to procure 20% of their annual procurement from SMEs), FDI in single and multi-brand retail, interventions in manufacturing sectors like Railways, Defence and e-businesses, emerging strong manufacturing sectors like ESDM and Aerospace and finally the opportunity to access global market with globally competitive products are strong drivers to take ZED manufacturing forward and to support fast changing market scenarios in the country. This will be a win-win situation for all stakeholders involved in the foreseeable future.

Rationale

The announcement of Make in India and Zero Defect Zero Effect put in perspective the governments’ intent to change the course of economy by focusing on manufacturing as an engine to sustained growth. In order to build the ecosystem to implement the idea, three important components emerged as the vehicle for this new transformation:

  1. The Ease of Doing Business in India.
  2. The confidence in quality of source material, components and services.
  3. Making available competent human resource to drive the change.

While the Department of Industrial Policy and Promotion took the responsibility of creating an atmosphere of Ease of doing business, QCI along with the M/o MSME started exploring the idea of creating a holistic scheme to engage the MSME sector, long considered as a propellant for sustained growth, by improving their quality and competitiveness.

ZED was thus born! The ecosystem around ZED model is calibrated to make aware, assess, rate, counsel, handhold, re-assess & certify MSMEs and ensure that they rise up the ZED ladder, thus enhancing their competitiveness in the global marketplace and making them an important cog in the wheel in the “MAKE-IN-INDIA” campaign. It also, as a consequence, provides career opportunities for the youth in India.