Zero Defect Zero Effect Scheme for MSMEs and its benefits

by news
•
April 11, 2018

Recently the Government of India has started a new scheme called ZERO DEFECT ZERO EFFECT (ZED) SCHEME. The new initiative launched by the Indian PM Narendra Modi, was first mentioned by him during the Independence Day speech in 2014 regarding the future of India. This scheme is specially designed for Micro, Small and Medium Enterprises (MSME) sector and is aimed at producing quality defect-free products which are also environmentally friendly, thereby increasing their demand globally.

Why is ZED plan important?

Micro, Small and Medium Enterprises (MSMEs) are virtually small enterprises that operate with relatively small size of investment. They play a vital role in the Indian economy by creating large employment opportunities for skilled as well as semi-skilled workers, providing raw material to large industries and increasing production of the manufacturing sector, contributing to exports, producing basic goods, and so on.

As the MSMEs still use obsolete methods of production, their products are often found to be lacking quality. The obsolete technology used also adds to atmospheric pollution and environmental damage. The ZED scheme, thus, is an important effort of the government for making MSMEs competitive in the domestic as well as global market.

Areas of ZED

The model proposed under ZED Scheme will:

Vision of Zero Defect Zero Effect (ZED) Scheme

The ZED’s vision is to make the Indian industry a strong contender in the global marketplace, and to utilize India’s progress as a global supplier through the ‘Make in India’ mark.

Mission of Zero Defect Zero Effect (ZED) Scheme

ZED scheme is launched to accomplish the mission to develop and implement a ‘ZED’ culture in India based on the following principles:

Zero Defect (focusing on customers)

  • Zero nonconformity / non-compliance
  • Zero Waste

Zero effect (focusing on society)

  • Zero Air Pollution / Liquid Exhaust (ZLD) / Solid Waste
  • Zero decay of natural resources.

Ecosystem

  • The atmosphere of the ‘ZED ecosystem’ is based on dynamic systems and process of reducing with synergy and playing a specific role within a set time period.
  • MSMEs, during this environment, will receive training, guidance and evaluation, and certification.
  • MSMEs can choose to re-evaluate to achieve high maturity level.
  • Rating and certification will be valid for a set time period and will be monitored during this process.

Benefits of Zero Defect Zero Effect (ZED) Scheme

  • Businesses with ‘ZED rating’ can get easy access loans for business expansion and other needs
  • ‘ZED Rating’ will be a credible identification of industries for international customers who wish to invest in India and direct foreign investors.
  • ZED is likely to be created as a benchmark for public sector undertakings and defense offset suppliers.
  • ZED rating displayed on Flipkart, Snapdeal and other e-commerce portals can increase the enhance brand trust and confidence of customers for small businesses
  • MSME will help to efficiently manage and develop vendors.
  • The quality of the final product will improve.
  • There is a possibility of profit in the government’s future taxation policies.
  • There will be an option to get high ZED rating with guided cooperation.