CASE STUDIES Hkkjrh; ekud C;wjks Production & Concept Designed by : Dot Communications ekud Hkou] 9] cgknqj 'kkg tQj ekxZ] ubZ fnYyh&110002 Bureau of Indian Standards Manak Bhavan, 9, Bahadur Shah Zafar Marg, New Delhi 110 002 www.bis.gov.in IndianStandards @IndianStandards ekud% iFkizn'kZd% Hkkjrh; ekud C;wjks IndianStandards BureauofIndianStandards Bureau of Indian Standards The National Standards Body of India
DIRECTOR Preface GENERALS’ Bureau of Indian Standards (BIS) is the National Standards Body of India, established under Message BIS Act, 2016, an Act of Parliament. It is engaged in the activities of Standardization at National & International Levels and operating Conformity Assessment Schemes such as the Product BIS has made signicant contribution in the realms of Standards Formulation Certication Scheme (popularly known as ISI Marking Scheme), Hallmarking of Gold & Silver and Conformity Assessment over last 75 years and has laid a solid foundation articles and Management System Certication etc. All these activities are aimed at creating a for futuristic reforms in the National Quality Ecosystem. Not once did BIS rest vibrant quality ecosystem in the country to ensure availability of quality goods and services to on its laurels, but has constantly sought to revamp itself with the tides of the consumers through the industries implementing the quality standards. BIS occupies a change. pivotal position in the quality ecosystem and has a treasure trove of experiences in the area. Documenting the experiences of this wonderful journey in the form of Case Documentation of these experiences in the form of Case Studies can serve as invaluable Studies is an efcacious way of knowledge sharing and can serve as a useful assets in experience sharing and establishing benets of the various measures taken by the guide for the present and future generations of ofcers and other stake Bureau for the improvement of the quality ecosystem. Similarly, Case Studies on failed or holders in planning and executing new ideas and programmes. The case decient ventures provides opportunities for improvement in the system by identifying and studies included in this compendium. I am sure, will serve this purpose. implementing the required corrective measures. On the whole, Case Studies help enrich the knowledge capital of an organization that can serve as important training and promotional I am thankful to the Indian Institutions of Management, Lucknow for tools. supporting BIS in the preparation of the case studies, and sincerely hope that we will have many more of them in coming days. With this background in mind, BIS organized two training programmes with faculty from IIM (Lucknow) for capacity building of ofcers in writing case studies, the outcome of which has Pramod Kumar Tiwari, IAS been codied in this booklet. The topics covered include the activities of BIS like Standards Formulation, Product Certication, Hallmarking, Management Systems Certication, Laboratory, Standards Promotion etc. Efforts have been made to capture a range of perspectives in these Case Studies. These Case Studies make you travel through the dilemma of the decision maker and enable development of a holistic view on the topic. This provides time and space to build a detailed understanding of the topic, establishing a sound platform from which to explore the factors inuencing these activities in greater detail. The following members from Training Team have contributed significantly to this ac vity: 1. Sh. D. K. Agrawal, Deputy Director General (Policy, Research and Training & Hallmarking) 2. Sh. N. K. Kansara, Ex- Deputy Director General (Policy, Research and Training) 3. Smt. Renu Gupta, Sc-F & Head (P&C) (Ex-HPRTD) 4. Sh. Chandan Bahl, Sc-F & Head (Na onal Ins tute of Training for Standardiza on) 5. Dr. Surya Kalyani S., Sc-E & Head (Policy, Research and Training) 6. Ms. Surabhi Raja Ram Arya, Sc-C (Policy, Research and Training) 7. Sh. Sachchidanand Kumar, Sc-C (Policy, Research and Training) 8. Ms. Anurita Nidhi Hemrom, Sc-B (CNBO II) (Ex-NITS) 9. Ms. Kri Mathur, Young Professional (Na onal Ins tute of Training for Standardiza on)
ekud% iFkizn'kZd% Journey of BIS labs from Self-reliant to PPP: A case study Table of Contents Abstract Journey of BIS labs from Self-reliant to PPP: A case study 01 As the chauffer closed the door, the silence inside the car was disturbed by the thoughts 12 colliding inside the mind of Mr. Amit Saluja, the Deputy Director General (DDG) for the Stringent standards or relaxed Compliances, the consumer 21 Laboratory activities in the Bureau of Indian Standards (BIS). The meeting of the core vs industry - Market perceptions of BIS ISI scheme 29 committee on the strategic reforms of the BIS had ended an hour ago but Mr. Saluja found 38 himself falling deeper into the conundrum to decide whether proposing the Public Private Should Jindal Steel & Power Go for BIS Certication? 48 Partnership (PPP) Model for the BIS labs would be the right decision or the existing laboratory 58 structure can be strengthened to cater to the growing needs of BIS. Since the inception of the Promoting Quality Infrastructure in India: The role of BIS 67 BIS Conformity assessment, the laboratory testing had been one of the Core activities. 77 However, with the increasing number of products falling under the ambit of various conformity Dilemma of a Packaged Drinking Water Unit: How to Remain 96 assessment schemes of BIS, its own laboratories have not been able to keep pace with the Competitive in Market and Still Comply with BIS Norms? 119 growing demand of the testing due to variety of issues. Considering the current demand, around 1.2 lakhs samples are expected to be generated for testing every year by BIS1. But with Drivers and Deterrents for BIS in Implementing Management Systems the current facility and infrastructure, only 60,000 samples can be tested in BIS laboratories2, which raises question on the capability of BIS in the quality ecosystem. Implementing the PPP The Case of RAMCO Cements Ltd. – BIS Management System model and letting the private players do the heavy lifting appears to be the safest choice from Certication – A photo opportunity or a chance to reap rewards the nancial point of view, but that itself brings up plethora of challenges for BIS like clarity on the revenue sharing between the parties, legalities and the loss of expertise and brand value of Adoption of International Standards in Steel Sector BIS. Augmentation of laboratory infrastructure and testing facilities will result in additional – A Panacea or Pandora’s Box burden of xed cost on BIS, whereas the PPP model will bring in variable cost for the organization, keeping in mind judicious utilization of the public funds. BIS Hallmark – Green Tests for Yellow Metal Key words: Digital transformation of a legacy giant – Conformity assessment in BIS PPP model, BIS, ISI, Certication, Laboratory infrastructure, Fixed Cost Testing Labs: The Outsourcing Dilemma of BIS Background of BIS Bureau of Indian Standards, the ‘National Standards Body’ of India was established as a statutory organization under Bureau of Indian Standards (BIS) Act, 2016. The organization had its roots in Indian Standards Institution (ISI), which was established on 06 January, 1947 around the time of independence. Through the journey of 75 years, BIS had evolved itself into a premier institution for formulation of National Standards, for providing various Conformity Assessment Schemes to the Industry (including Hallmarking and Management system certication) and providing reliable testing services (third party BIS approved and BIS own labs) to the stakeholders. BIS had also grown in multiple support activities including training services, grievance handling, consumer affairs, and publicity related matters. 1 Source: Informa on retrieved from h ps://www.manakonline.in/MANAK/ConformityAssessment on 05-04-2022 2 Source: Informa on retrieved from h ps://lims.bis.gov.in/ on 05-04-2022 Arvind Prakash Dhar Dwivedi, Manojit Mondal, Rajat Gupta, Devesh Kumar, Debashish Kumar prepared this case. This case study has been prepared as part fulfillment of the training on Prepara on of Case Studies organized by NITS of BIS. Cases have been developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustra ons of effec ve or ineffec ve management. ©All Rights Reserved No part of this case study may be reproduced, photocopied, electronically processed and forwarded without the wri en consent of BIS. CASE STUDIES 01
Formulation of Standards 20000 samples [see Exhibit 1 for details]. With development of BIS labs, this annual testing capacity has now been enhanced to 60000 samples per annum5. As a major core activity, BIS took up formulation of Indian standards through 16 division council representing diverse area of economy and technology like chemical, metallurgy, food But this expansion of BIS labs requires investment in xed as well as variablecosts. The data etc. In each division council there are various committees for specic subject matters. for previous years reveals that the notional income generated through testing ranges from Standardization process of BIS helped the country in ensuring the safety, interoperability and 610.5 lakhs to 1356.61 Lakhs, which is less than overall expenditure on operation of BIS compatibility of goods produced, thus forming a base of agreement to which every industry laboratories [see Exhibit 2 for details]. For the samples tested by BIS labs, associated testing and manufacturer had to adhere to. charges are shown as notional income (This is dened as the income, which the laboratory could have earned from testing of the sample tested considering the current testing charges. Conformity Assessment There is no actual transfer of money to be reported as income here.). BIS testing charges are considerably less as compared to testing charges of OSLs, as they are based on operational To protect consumer’s interest, BIS was operating various conformity assessment schemes expenditure without considering prot. How to handle this issue? It can well be noted from the which was the second core activity of the organization. Under these schemes, BIS granted trail expenditure sheet of the Central Laboratory that the expenditure in the budget head of licenses/registrations to such manufacturers who were capable of producing goods Outsourced Staff (OS), Equipment and Consumables, Ofce Equipment, Furniture, Building conforming to relevant Indian Standards, on continuous basis. Various schemes like Product Maintenance, Computers and allied Accessories and miscellaneous is very high [Exhibit 3 for certication, Self-declaration of conformity (SDOC), Foreign Manufacturer Certication details]. Also, expansion in recognized OSL, will require additional manpower and Scheme (FMCS), Hallmarking of Gold and Silver articles, Management systems certication infrastructure for effective monitoring [see Exhibit 4 for details]. But with limited manpower and scheme (MSCS) etc. were part of the conformity assessment activity of BIS. There are various previous experience, how successful it will be? products under compulsory BIS certication under various schemes of procedures mandated by the notied Act, Rules and Regulation. Augmentation of the Testing Capacities Product Testing Under Conformity Assessment Schemes While explaining this scenario to his peers, Mr. Amit Saluja stopped. The walls of the room could feel the heightened degree of curiosity among the listeners, who were wondering how An important component of Conformity assessment schemes was testing of the end product BIS can be rescued from this operational trap. He briefed the history of outsourcing of being ISI marked and Hallmark. To support these schemes, testing of products was required laboratory system which helped BIS laboratories in handling large number of samples. Now, in on regular basis for checking conformity to the relevant Indian Standards. BIS had established addition to the existing eight BIS labs, 34 labs owned and operated by various academic a network of eight internal laboratories and also recognized various other third-party institutions, PSUs were empanelled and 281 outside laboratories(OSLs) were recognized by laboratories (accredited by NABL and approved by BIS) under BIS Laboratory Recognition BIS through LRS (laboratory recognition scheme), which supports the huge growing licensee Scheme (LRS), termed as recognized Outside Laboratories (OSL). BIS has also empanelled base6. Though he was sceptical about the involvement of OSLs (Outside laboratories) in the laboratories owned by major research organizations (like CSIR, BARC, etc.), academic core activity of BIS, but somewhere in his conscious mind, he knew that it was the best institutions (like IIT, NIT), PSUs and other Institute of National Importance and their services are possible decision that could have been taken at that point of time. Ignoring the thoughts in his being utilized as and when required. The process of recognition of Outside laboratories mind, Mr. Amit Saluja continued his discussion on laboratory operations with his friends and involves ascertaining of implementation of quality system and testing infrastructure and colleagues. The discussions among them raised many questions on the current scenario of subsequently continuous monitoring through audits. the laboratory operations of BIS. Mr. Amit Saluja answered almost all of the questions but he couldn’t nd answer for the one question Mr. Anand Mohan, who was working as a research Day by day the conformity assessment scheme of BIS is expanding multi-fold and pressure on scientist in CSIR laboratory asked, “Don’t you think that outsourcing one of the core activities BIS laboratory is mounting to cater the need of Certication department in terms of increasing (laboratory operation) sabotaged the regards of the licensees or applicants towards BIS? quantum of samples and timely testing. Each year BIS is granting around 4000 new licenses3. Don’t you think OSLs are easy options for them? You actually stunted your growth”. Such Further, there are more than 400 products under Quality Control Orders4 and therefore require comments of Mr. Anand Mohan felt Mr. Amit Saluja like being pinched with a needle and other mandatory certication from BIS. Recognized OSLs are not able to deliver up to the colleagues could see the raised eyebrows of Mr. Amit Saluja. “Do you understand the expectations of BIS. There are instances of undue delay in testing by OSLs. Also considering bureaucratic process of operation of Government labs? Do you have any idea how difcult it is cost benet factor, OSLs are reluctant to create test facility for which there are limited number to handle so diversied portfolio of products, so many numbers of testing?” Mr. Rahul Raina, of BIS licences. For effective operation of Conformity assessment schemes expeditious Director General, BIS was listening all of this ruckus and to end the conversation he said to nd testing of samples and availability of test report is key factor. a middle path and explore feasibility of implementing PPP model, Public Private Partnership. Expansion of BIS Laboratories 3 Source: BIS Annual Report 2017-18, 2018-19 and 2019-20 03 4 Source: Informa on retrieved from h ps://www.bis.gov.in on 05-04-2022 To cater to the need of increasing demand of conformity assessment scheme, proportionate 5 Source: Informa on retrieved from h ps://lims.bis.gov.in/ on 05-04-2022 expansion of BIS laboratories is required, but it needs substantial investment in infrastructure 6 Source: Informa on retrieved from Management Control Report of Laboratory for March 2022. development, augmentation of manpower, procurement of test equipment etc. During the year 2017-18, 2018-19, 2019-20 and 2020-21, the BIS laboratories testing could not exceed CASE STUDIES 02 CASE STUDIES
PPP Model: A Highway for few and a Dead end for rest laboratory sector. It houses state-of-the-art collaborative training centre, namely, The Food Safety Solution Centre (FSSC) and the Centre for Microbiological Analysis Training (C-MAT). The public–private partnership (PPP or 3P) is a commercial legal relationship dened in the NFL-Delhi, NCR symbolizes the synchronization of policy-driven partnerships and guide issued by the government of India ‘PPP guide for Practitioners’ as \"an arrangement collaboration with a holistic approach and a futuristic vision. Due to such synergistic between a government / statutory entity / government owned entity on one side and a private partnership, the lab has a comprehensive array of equipment with the latest technologies and sector entity on the other, for the provision of public assets and/or public services, through facilities to conduct analysis as per global accreditation standards for testing and calibration. investments being made and/or management being undertaken by the private sector entity, FSSAI has also been harmonizing testing protocols for reliable and reproducible testing for a specied period of time, where there is well dened allocation of risk between the private supported by the Scientic Panel and Method Review Group that have been set up. Thus far, sector and the public entity and the private entity receives performance linked payments that 15 Manuals of Methods have been nalized. Moreover, a system with PPP model has been conform (or are benchmarked) to specied and predetermined performance standards, operationalised to consider and approve the tools (kit, equipment or method) that allow rapid, measurable by the public entity or its representative\".7 The PPP vertical of NITI Ayog is accurate and efcient food testing (RAFT-Rapid Analysis in Food Testing). This is the rst of its currently working on redevelopment of railway stations, eco-tourism projects, private kind in terms of regulatory provisioning to make real-time decisions on food safety issues. investment in improving medical education, stuck highway projects, ropeway-based Also, in the eld of road connectivity, Mumbai Nasik Expressway PPP Road Project has been transportation systems, viability gaps in rural development projects etc. There had been 1128 considered as nancially successful operational PPP national Highway project. Despite projects completed through the PPP model by Government of India of valuation of $280,609 project completion delay of 2 years and signicant cost overrun, this project had been able to and there are 1082 ongoing projects under this model.8 show excellent nancial return. To mitigate the nancial risk of bankruptcy raised, the cabinet committee permitted 100% equity divestment of primary sponsor to come out of the debt- How PPP Model Works laden situation.12 Most of the developing countries face constraint of inadequate infrastructure which leads to PPP model: is it a success always ? congestion in meeting the service demand or service rationing. Also, in most of the cases, they are of low quality and poor reliability, which is due to some major challenges faced by In case of Mumbai Metro One Private Limited, PPP partnership signicantly failed due to government. The major challenges are lack of funding, poor planning and co-ordination, weak several technical issues faced during the project. The major reasons may be attributed to 39- project analysis prior to selection, regulatory constraints in the execution due to tedious month delay in the project as the project suffered from frequent changes in the planning at procurement rules and regulations such as MII9 preferences, compliances to GFR10 and Public some of the most crucial stages. Other factors such as dispute between the Concessionaire Procurement Manual. To resolve the issue, PPP models can mobilize additional sources of and project authority about fair xation and the legal dispute between the concessionaire funding and nancing for better infrastructure, can carry out better analysis prior to project MMOPL and project authority MMRDA also contributed to the failure of this project. Apart from selection, can bring private sector experiences and incentives leading to successful project this, the sponsor incurred a nancial loss of 2,426.82 crores during the year ended 31 March implementation. On-boarding of private sector in PPP model brings higher efciency, 2019. Also, in the case of IRB Surat Dahisar Tollway Pvt. Ltd, the PPP partnership did not end increased productivity and better manpower and resource allocation because, the private well. The main reason for the failure was the dispute over nancial revenue sharing between entity will have a better expertise of recency of testing methodologies and market NHAI and the concessioner. Additionally, undue delay and irregular monitoring by the NHAI understanding to maintain its competitive advantage. The focus on life cycle cost of the also led to 49% cost overrun in the project.13 projects drives the private entity towards prot making approach. Due to the clear allocation of risk and responsibilities between both the parties and continuous monitoring by the public The Introspection entity, the private party is bound to provide the service in a transparent manner in utilizations of funds and as well as in quality of service delivery. However, on the other hand, there are certain Mr. Saluja was still feeling angry by the words spoken by Mr. Anand Mohan, but on other hand limitations of the PPP model such as complex procurement process and problems in the he was more irritated by his inability to justify the actions taken by BIS. After wandering for an enforcement and monitoring once it enters to the implementation phases. hour in these thoughts of humiliation, he decided to explore the PPP model a little bit more in order to see whether this can really be an option for BIS in future? PPP Model, Success Story The exible nature of PPPs provides a framework for developing and adapting existing Especially, in case of laboratories, NFL Delhi is one of the examples for the successful and structures to meet the augmented requirement in a shorter time frame, as it removes the basic synergistic partnership of PPP model.11 NFL, Delhi NCR is one of the two premier referral hurdle of rules and procedures applicable to a government body. Testing facility upgradation laboratories under the direct administrative control of FSSAI. This national lab is a result of a process could become faster, state of art equipment could be procured with less cumbersome Public-Private-Partnership (PPP) with Arbro Pharmaceutical, the rst-of-its-kind in the food process. Professionals engaged in laboratory activity would enable effective execution of 7 Source: Defini on taken from ‘PPP Guide for prac oners’, April 2016 published by Department of Economic Affair, Ministry of Finance, 11 Source: Informa on retrieved from h ps://www.fssai.gov.in/ on 05-04-2022 Government of India 12,13 Source: ‘Failure of Opera onal PPP Projects in India Leading to Private Developer’s Apathy to Par cipate in Future Projects: A Case Study Based 8 Source: Informa on retrieved from h ps://www.pppinindia.gov.in/ on 05-04-2022. Analysis’, Sandeep Ganpat Kudtarkar, Indian Journal of Finance and Banking; Vol. 4, No. 2; 2020 Published by CRIBFB, USA 9 MII – Make in India Order, 2017 issued by Ministry of Finance, Government of India 10 GFR – General Financial Rules, 2017 CASE STUDIES 05 04 CASE STUDIES
expansion/modernization plan and management of laboratory. Having a competitive edge, of BIS and therefore, placement of them out of the laboratories creates new issues. “As a Lathe productivity and efciency of the laboratory operation would increase. Moreover, the use of Machine Turner, my only opportunity to get promotion is through the skills of the trade I have PPPs could signicantly reassure and reduce the fear of complete privatising laboratory learned. What would be my promotional aspects, if I am doing a white-collar job in an ofce space activity of BIS. The issue of delay in the installation of the testing facilities by BIS labs, whenever and what type of job would I be doing there anyway” said Ramkesh Meena, Technician at Central there is an urgent need for testing infrastructure, would not be there. Further, the brand of BIS Laboratory of BIS. In addition to the above, a team of ofcers would be required for the regular would ensure that the laboratory has sufcient inow of samples throughout the year, from BIS monitoring of the laboratory being operated by a private player. Despite of the regular auditing own schemes as well as from the external customers. This would ensure that the PPP is not a and inspection of the operations of the laboratory, it is practically impossible to control any loss-making venture for the investor. BIS in return would be earning additional revenue from mischief or external inuence in the testing activity. And if BIS deploys sufcient manpower to the lab operation along with the savings on the salary expenditure of its own lab staff which monitor the complete operations thoroughly, the expenses would bring back the situation to could be utilized in other roles in BIS itself. square one. Going through the literatures related to PPP, Mr. Saluja was very happy and feeling satised BIS Labs also act as a learning centre through various certicate courses for industry personnel, that, nally all the issues of BIS Laboratories could be solved. To propose this initiative and to internship programs and exposure visits for the students of colleges and institutions, to skill them begin its implementation, he took his rst step. He opened his latop, logged into E-mail and and create awareness. These programs could only be organized through the support of the send a meeting invitation to all concerned department for a meeting to be held next day laboratory technical personnel which creates lot of disruption in the overall testing operation. around 10.00 AM at Manak Bhawan. Convincing private players to continue such programs would lead to additional expenses for the organization assuming such interference would be permitted by them at all. BIS has been The day of meeting: The end or the Beginning? involved in the laboratory testing activity since 1960s and over the years, generated pool of technical experts in the testing activity as well as laboratory operations. It was possible only due to While entering the Manak Bhawan, Mr. Ahuja could listen to the speculations, dilemmas, the availability of its own laboratories and personnel who despite the absence of the mandate for confusions of different ofcers from various branch ofces. “Public private partnership in case research and development, continued to evolve themselves with the new technology and of BIS laboratories are technically more tedious process than any other conventional requirements of the Indian Standards. “The gap in the hands-on work done by the BIS outsourcing because of several reasons as it involves handing over existing laboratory employees, which would inevitably be there when BIS is no longer operating its own labs, would infrastructure of BIS to private entity.”, One of the ofcer said. PPPs in the BIS laboratories be difcult to full if BIS has to take up the testing operations again. The displaced laboratory would create tremendous risk in maintaining the condentiality and impartiality of the system manpower would be out of touch, and experience and would again require re-training of the including reporting of results. High chances of Corruption and manipulation of results can also employees for restarting this activity”, stated Mr. Ved Prakash, Mechanical Incharge at Northern not be denied. This may, in some cases also arise public disbelief in this origination which Regional Lab of BIS. eventually will lead to public controversy and defaming the organisation status. While discussing the issues with the DDG Lab in the conference room of the Manak Bhawan, “Further, to cater to the need of conformity assessment schemes, BIS laboratories are duty Head(LPPD) suggested “one of the major hurdles for BIS has been the expenditure incurred in bound to create test facility for products for which there are limited number of licences. Also, maintaining the testing infrastructure for products having very less number of licences. These bringing private players in the operation of BIS laboratories, commercial aspect will be major products generate hardly any income for BIS and the frequency of the receipt of samples for governing factor and therefore the associated private entities under PPP will either be reluctant these products is less than 10 samples in a year. For example, in 2021-22 , the Central to invest for creation of test facility which are not economically viable or will require nancial Laboratory of BIS received 583 different products for testing. Out of these, for only 50 support from BIS.”, Another ofcer added. In addition, marking fee rely heavily on testing products, the number of samples were more than 50, whereas for 387 products, the lab charges. With introduction of PPP model, the commercial aspect will be a dominant factor and received less than 10 samples.14 If BIS focuses its resources on maintaining the infrastructure testing charges will increase considerably, thereby causing increase in associated marking and capacity only for testing the products with more licenses, a bigger part of its overhead fee, which is realized from rms holding the BIS licence. This will have adverse effect on expenses can be reduced, leading to more protability as well as timely testing. However, in nance management of small-scale industries holding BIS licence. Ignoring all these negative absence of BIS Labs, there are hardly any private player who would be interested in maintain remarks, Mr. Ahuja started the PowerPoint presentation he prepared with Title ‘PPP model in testing infrastructure for products having such low licenses. This would lead to surrendering of context of BIS Laboratory’. BIS licence of products which becomes counterintuitive to the overall objective of making Quality products available to the general consumer”. However, Head HRD had a different After listening to the presentation of the DDG Labs on this issue, Director Establishment Mr Ahuja opinion overall. He added “ One of the major components of the expenditure in maintaining added “BIS, in its eight BIS laboratories currently employs a total number of 60 scientic ofcers, 291 testing staff and 109 technicians, who assist the testing staff in the testing activity. The the testing infrastructure and the capacity, is the manpower recruited by BIS for its scientic ofcers can be suitably posted in any other activity of BIS, but the remaining 400 laboratories. The salary structure of BIS provides approximately 2 to 4 times of the wages personnel are specically hired by BIS through its recruitment to laboratory technical cadre provided by private laboratories to its permanent employees. In 2021-22, BIS labs hired regulations for the operation of the laboratories. In case of implementing the PPP model in the labs, these employees will be required to be relocated to other departments of BIS”. However, the 14 Source: Informa on retrieved from h ps://lims.bis.gov.in/ on 05-04-2022 competency level that these personnel have, there exist no demand for them in any other activity CASE STUDIES 07 06 CASE STUDIES
contractual manpower for increasing its capacity for testing of the samples received due to listen the discussions going on, as everyone were discussing the potential pros and cons of surge in market and factory surveillance by BIS. These contractual personnel were hired at the the probable outcome of the meeting. Whether BIS will be able to cater the upscaled demand wages similar to the private labs and provided the testing output equivalent to the permanent for sample testing? How QCO can be implemented, when there is a huge gap in required employees. BIS can explore the possibility of hiring additional manpower to meet the testing available testing facility? If BIS doesn’t have capability of testing required number of samples, need and increase the testing capacities of its labs. However, relying too much on the non- whether more number of products should be brought under QCO? permanent staff for operation of a core activity comes with its own set of issues. “Our permanent staff is governed by CCS Conduct Rules and we can rely on the testing done by Though he had a comprehensive analysis regarding the alternative solutions of the problem them that they are not inuenced or biased in any way”, expressed Vijay Gaurav, Testing since last couple of weeks, he was still confused. On one hand, the implementation of PPP charge at Guwahati Lab of BIS. Then, there is always the issue of attrition, as soon as the model outrightly reduces the burden of maintaining the infrastructure of testing labs by BIS, contractual staff is trained enough to nd opportunity in any of the private lab at higher reduces overall expenses on the lab operations and also relinquishes manpower for utilizing salaries”. DDG Labs after listening to the discussion added “If there are no labs available in the them in various other activities of BIS. On the other hand, the issues of loss of BIS brand value, country for testing of any product, BIS gives a provision for carrying out testing on the product technical expertise and credibility which would rise from letting a private entity take over one of in the factory itself, in presence of BIS ofcer. If BIS cannot maintain the testing infrastructure the core activities of BIS, cannot be ignored. With all these questions in mind, when Mr. Saluja then more products should be permitted under the provision of Factory Testing” informed Mr. was leaving Manak Bhawan, Mr. Rahul Raina, Director General, BIS said, “Mr. Saluja, I think we S S Verma, Representative of Medical Equipment Association. This provision, however, has need another meeting. Is not it?” been restricted for the products which are either bulky or sensitive in nature therefore, cannot be transported and the products which involve highly specialised nature of testing. Further, Exhibit 1 carrying out testing of all parameters as required by the Indian Standard in presence of BIS Samples tested by BIS Labs in recent years ofcer is not feasible, as the testing time for many parameters is not limited to a single or a couple of days”. BIS Lab 2017-18 2018-19 2019-20 2020-21 Central Lab (CL), Sahibabad If BIS expands its testing infrastructure, the main issue which is highlighted is the risk of idle Western Regional Lab (WROL), Mumbai 5534 4868 3736 2560 testing facility, in case the number of samples received are very less. “BIS could always start Eastern Regional Lab (EROL), Kolkata commercial testing of products for general public instead of limiting itself to the conformity Southern Regional Lab (SROL), Chennai 2450 2703 3224 1419 assessment, then the testing infrastructure would not remain idle and BIS will have an Northern Regional Lab (NROL), Mohali additional source of revenue” said Mr. N Venkatesan, CEO NABL (National Accreditation Patna Branch Lab (PBOL), Patna 1898 3023 2652 1168 Board of Testing and Calibration Laboratories). The only issue with starting of commercial Guwaha Branch Lab (GBOL), Guwaha testing, is the tax exemption status of BIS which remains in effect as long as BIS does not carry Bengaluru Branch Lab (BNBOL), Bengaluru 5238 1919 2362 1307 out any commercial activity. “If BIS is not tax exempted, it will lose far more revenue in paying TOTAL samples tested in BIS Labs the tax return than it would earn through commercial testing” stated Mr. Gurpreet Singh, 2750 3332 3496 1865 Director Finance at BIS. [see Exhibit 5 for details] 634.5 947 1019 442 “If there are no labs available in the country for testing of any product, BIS gives a provision for carrying out testing on the product in the factory itself, in presence of BIS ofcer. If BIS cannot 144 195 249 127 maintain the testing infrastructure then more products should be permitted under the provision of Factory Testing” informed Mr. S S Verma, Representative of Medical Equipment 1735 1805 1887 781 Association. This provision, however, has been restricted for the products which are either bulky or sensitive in nature therefore, cannot be transported and the products which involve 20383 18792 18625 9669 highly specialised nature of testing. Further, carrying out testing of all parameters as required by the Indian Standard in presence of BIS ofcer is not feasible, as the testing time for many BIS Annual Report 2017-18, 2018-19 and 2019-20, 2020-21 09 parameters is not limited to a single or a couple of days. Informa on retrieved from LPPD Annual MCR Report on 05-04-2022 The Aftermath CASE STUDIES As Mr. Amit Saluja, the Deputy Director General (DDG), Laboratory activities ended the meeting with a vote of thanks to all Departments with a smile on his face. But, he knew somewhere in his mind, that he is now more confused than ever on this issue. While, leaving the meeting hall, he could notice that the all the stakeholders are still discussing. He could 08 CASE STUDIES
Exhibit 2 Exhibit 4 The Notional Income and the Expenditure in BIS Labs No. of outside laboratories recognized and de-recognized by BIS No onal Expenditure 2017-18 2018-19 2019-20 2020-21 income in ₹ in ₹ * 2017-18 61,050,698 164,368,618 NO OF RECOGNISED LAB 36 35 13 NA 2018-19 135,661,329 254,847,470 NO OF DE-RECOGNISED LAB 585 2019-20 129,786,862 267,350,096 *- Due to COVID Pandemic, No changes in the previous FY data 2020-21 75,906,000 107,495,000 BIS Annual Report 2017-18, 2018-19 and 2019-20, 2020-21 BIS Annual Report 2017-18, 2018-19 and 2019-20, 2020-21 Informa on retrieved from LPPD Annual MCR Report on 05-04-2022 Informa on retrieved from LPPD OSL Report on 05-04-2022 Exhibit 3 Exhibit 5 Trail Expenditure budget head of Central Laboratory Tax Liability of BIS in case BIS indulges in Commercial activities (in T Crore) BIS Lab 2018-19 (INR) 2019-20 (INR) 2020-21 (INR) Surplus carried to Capital 2017-18 2018-19 2019-20 2020-21 8124425.04 9812984.04 15006459.75 Fund 227.69 461.32 308.46 506.70 Salary to the 144840150.00 145831564.00 164740107.83 Es mated Tax Liability outsourced staff 7881938.98 7847012.55 8060018.10 Tax @ 30% 68.31 138.40 92.54 152.01 1302154.46 15314166.80 7648245.17 Cess @ 4% 2.73 5.54 3.70 6.08 Lab equipment and 6078722.2 5162918.50 Total 7.10 14.39 9.62 15.81 consumables 1284234.05 1148927.88 4765525 78.14 105.86 6124370.30 158.33 173.90 Office Equipment 68043635.45 55086245.43 and furniture 237555260.2 240203819.2 87340332.02 Source: BIS Annual Report 2017-18, 2018-19 and 2019-20, 2020-21 293685058.2 Informa on retrieved from LPPD OSL Report on 05-04-2022 Building, Repair and Maintenance Electricity, water and Taxi Charges Sta onary, Postage, Telephone and refreshments Others Total CL Annual Expenditure Report 2018-19 and 2019-20, 2020-21 CASE STUDIES CASE STUDIES 11 Informa on retrieved from CL Annual Expenditure Report on 05-04-2022 10
ekud% iFkizn'kZd% Stringent standards or relaxed Drawing upon the increased strength of BIS’ surveillance system, a comprehensive market Compliances, the consumer vs industry - survey of ISI marked products (i.e. market surveillance) and non-ISI products was undertaken in the year 2021-22. The results of this survey are given in Exhibit D and Exhibit E respectively. Market perceptions of BIS ISI scheme The outcomes of the survey shook Mr Manoj Sinha, Director General of BIS, and made him The Bureau of Indian Standards runs a product certication scheme and grants licenses to wonder about the signicance of the BIS certication schemes. He couldn’t believe that more manufacturers to use ISI mark on products conforming to pre-dened quality standards. While than 20% of the ISI marked products in the market were failing to adhere to the quality norms. the certication is essentially voluntary, the government can make it mandatory for Being a sensitive topic that affects all consumers, Mr Sinha scheduled a meeting to discuss manufacturers of certain products to obtain BIS license, if deemed necessary in the interest of the ndings of the survey and to formulate a certication strategy for improving the overall public health and safety. Mandatory certication has led to a consistent increase in the number quality level of products in the market. All the senior ofcials of BIS were requested to of licenses over the last decade. However, mandatory certication has faced resistance from participate in the meeting and to actively contribute their views on the subject. certain industry bodies, contending that it only adds to the compliance burden for the industry in an environment where manufacturers are already compelled to maintain quality standards Discussions during the meeting due to a highly competitive market. Some consumer bodies have also stressed that certication is not serving the desired purpose among the consumers as ISI mark still does not The meeting was held on 04 April 2022. The details of attendees of the meeting are given at instil a sense of condence about quality. Moreover, BIS’ own survey ndings (year) indicate Exhibit F. supply of substandard products even by BIS licensed manufacturers. In this backdrop, it becomes highly challenging for BIS to formulate the future strategy for certication. In the Mr Manoj Sinha welcomed all the senior ofcials and began by outlining the major problems interest of consumer protection, the question is: should BIS focus on increasing the number of faced by the organization at present. He highlighted the important role of BIS in safeguarding licenses or should it focus on ensuring compliance by existing licensees? Should the BIS the interest of the common man-the consumer-and to ensure that all products meet the quality compliance system be made more stringent or should it be relaxed in the interest of ease-of- expected of them. doing-business? Are there better ways to nudge manufacturers to obtain certication, than to compel them using mandatory certication? The current quality situation of the market Keywords BIS, Conformity assessment, certication, Mandatory certication, quality The DDG Surveillance, Mr Shekhar Dixit, took up the mantle thereon. He started on a positive regulations note by appreciating the BIS team for effectively covering 100 percent of its licenses in the surveillance net in the past year despite the restrictions imposed by the pandemic He About BIS recognized the role of recent structural reforms within BIS which had made this possible. This included some controversial reforms like outsourcing of inspection work, process re- To protect Indian consumers from injury caused by defective, adulterated, counterfeit, engineering, redesigning of employee KPIs, digitization of work etc. He also appreciated the duplicate or malfunctioning products, the Bureau of Indian Standards runs a product support of Ministry in enabling these reforms. Thereafter, he presented the results of the certication scheme and grants licenses to manufacturers for using ISI mark on products market surveillance of FY 2021-22 as summarized in Exhibit D. He made a few suggestions He conforming to Indian Standards. After the grant of license, BIS ensures compliance through a Pointed out that considering the subpar performance of licenses in the past year, testing just system of factory and market surveillance. Factory surveillance refers to surprise inspections two samples annually might not be sufcient to control the quality effectively. Given that of the factories of licensed manufacturers and market surveillance refers to testing of randomly implications of substandard products can even be life threatening in some cases, he purchased ISI marked samples from the market. Over the last 75 years, the certication advocated a gradual increase in the factory and market surveillance for licenses. scheme has expanded manifold to include around 40,000 licensed manufacturers and around 1000 different products. To continue providing timely services to industry with a Financial considerations constraint of limited manpower, BIS has undertaken major organizational restructuring in Building on Mr Dixit’s words, the Director Finance, Mr Rahul Patil elaborated in length on the 2021-22, by empanelling private inspection agencies to support BIS in its surveillance fee structure of BIS license. While agreeing with Mr Dixit in principle, he mentioned that the fee functions. structure for the BIS licensees have been designed in such a way that it covers the expenses of two surveillance visits and two market samples annually. The cost of increased surveillance Prem Sajani Patnala, Shekhar, Divya S, Vipul Bohara prepared this case. This case study has been prepared as part fulfillment of the training on would ultimately have to be passed onto the manufacturers in the form of higher marking fee. Prepara on of Case Studies organized by NITS of BIS. Cases have been developed solely as the basis for class discussion. Cases are not intended to He warned of signicant opposition from industry associations and the governmentif BIS serve as endorsements, sources of primary data, or illustra ons of effec ve or ineffec ve management. attempts to increase the marking fees to support more inspections or samples, Already, he ©All Rights Reserved explained, the government has been suggesting reduced license fee burden for No part of this case study may be reproduced, photocopied, electronically processed and forwarded without the wri en consent of BIS. manufacturers, especially MSME. Working out the logistics of surveillance, he suggested to defer the plan of increased surveillance until such a time BIS has a large license base to share 12 CASE STUDIES the added cost. CASE STUDIES 13
The DDG Certication, Mrs Pratibha Pant agreed with Mr Patil that increasing the marking fee and enumerated two possibilities for failure of sample; First, the inability of the was not a practical solution at present. She illustrated the issue with a representation received manufacturer/quality team to identify the shortcomings production. Ideally, they should have from the All India Packaged Drinking Water Manufacturers Association (IAPDWMA), wherein detected the substandard product during the in-house testing and discarded it so that it could they had explained the constraints they were facing while trying to meet the quality not have reached the market; and, requirements of BIS The IAPDWMA had raised their suspicions that considering the prices at which 20 litre jars were being sold in the market, there was a high chance that the quality norms second, the manufacturer/quality team might have skimped on the testing procedures or laid forth by BIS were being outed. Even worse, they quoted cases where the manufacturers might have released the substandard products in the market despite knowing that it did not had continued selling ISI marked products even after surrendering their licenses. Further, she meet the requirements, denoting that the manufacturer was risking even his brand value, shared that the PDW manufacturers had requested that the marking fee may be reduced, and trying to make a quick prot. Mrs Pant remarked that regardless of the reason, the that BIS may exhibit stricter control over the non-complying PDW manufacturers to ensure that substandard products in the market would affect the goodwill of the brand and they would the market remains fair. She warned that in the absence of sufcient and strict action from BIS, soon lose out in the market competition. the manufacturers may decide that facing the legal action, after bypassing the BIS quality norms, might still be more protable than adhering to the BIS rules and paying the high The DDG Lab, Mr Sanjay Roy, also shared his experiences where a plywood manufacturer had marking and renewal fees imposed on them. She agreed with Mr Dixit that at least in case of approached him regarding a failure intimation letter he had received. A failure intimation letter mandatory products like drinking water, there was a need to increase surveillance and market is the ofcial letter sent to the licensee in case any of their samples fails in surveillance or sample collection. She also considered Mr Patil’s suggestion that the surveillance can be market testing. The licensee was rather nervous but equally adamant that the quality of his increased without affecting the license fees, only in case of a signicantly higher license base product was ensured at every step of the way and that it could not have failed. Further he to share the cost. She shared the details of the recent increase in license applications, brought argues that the product had failed only in dimension which was not a criterion critical enough about by industry sensitization programmes of BIS and by mandatory certication. To improve to penalize him. He was very distraught as it was his family business that his father had built up the license base of BIS, she suggested enhanced industry interaction and utilizing mandatory and had been successfully running for the last 20 years. certication by bringing even more products under its ambit. It was explained to him that the hands of BIS ofcers were tied when it came to determining if a Mandatory certication criterion was critical or not. Nevertheless, the manufacturer was offered the chance to witness the re-testing of his product in the presence of a scientic ofcer. It was found that the privately On this point, the Director Legal, Mr Piyush Gupta, cautioned Mrs Pant that the legal provision owned BIS recognized lab had issued an incorrect report due to error in interpretation of the of mandatory certication was a sensitive tool and may be utilised only in cases where the use standard. or consumption of non-conforming products can cause serious injury to health, safety or environment. He was sceptical about mandatory certication which in his opinion, did more Mr Patil expanded the discussion further, sharing from his experiences how he had seen harm than good, as it adversely affects a small section of the industry who may have been people, in rural areas prioritizing cost over quality. However, did the trend spread to the so selling quality products but will be forced to go out of business due to the increased cost of called urban educated in the towns as well? Had cost taken priority over quality? How often quality assurance. He advocated a much more exible certication scheme where only the was quality concerns bypassed for mere pennies? Exhibit B offers insights into these dedicated manufacturers obtain a BIS license voluntarily. Such manufacturers were less likely questions. to prioritize prot over quality. He drew upon the previously mentioned AIPDWA representation to emphasize his point that mandatory certication might have the adverse He shared an incident from his days as a dealing ofcer. It was common in branch ofces to effect of depriving the customer from making a choice based on quality, making cost the sole receive visitors inquiring about Indian Standards or license procedures. He recounted the criteria differentiating the various brands available in the market. day when a manufacturer of RFID Access Control Door Locks visited him with a request to obtain a license for his product. Aware that there was no existing standard for the product, the Mr Dixit, then elaborated on the actual quality of goods available in the market. Drawing on the procedure for obtaining a license was explained to him. The manufacturer was keen on results of the survey of around 18000 ISI and non-ISI samples from a wide range of products2, getting the standard developed and obtaining an ISI mark for his product. He believed that a he concluded that although the quality of goods across categories didn't fare as well as they government mark of approval would add to his credibility and ultimately benet his sales. should ideally have, the general quality of ISI marked goods surpassed that of non-ISI goods. Did BIS Standard Mark hold so much credibility in the eyes of the common consumer? Or is it Mr Sinha was disappointed by the results being presented to him and drilled the team further just the typical tender requirement for the procurement of different products by the about how the market survey was carried out and the possible reasons for the unsatisfactory government departments that is giving it any credibility? Or is it a quality control order? results obtained. Assuming that a manufacturer has taken the initiative for obtaining a licence from BIS. Once the manufacturer is granted a licence, would he show commitment to the product quality or Insights from the eld would he focus on his prot rather than quality? On the other hand, did the BIS standard mark do justice to the manufacturer when compared to the time and effort he would spend on Mrs. Pant drew upon her experience as a dealing ofcer and shared how she had obtained the proposing the standard, obtaining a licence and paying marking fee and testing charges every necessary products from the market. She recalled that the results were not ideal even then year? 14 CASE STUDIES CASE STUDIES 15
Way Forward Exhibit ADEPUTYAccounts BIS OrganogramDIRECTORDep . Mr Sinha felt that the meeting was raising more questions than answers. With his own GENERAL Finance experience working in diverse government organizations, he was aware that India, being a CASE STUDIES (FINANCE) Dep . developing country with the second highest population in the world, has a great percentage of its population below poverty line The paying capacity of the common man was limited. DEPUTY Administra on Further, unscrupulous manufacturers were taking advantage of such a market by selling low- DIRECTOR Dep . quality cheap products to make quick money before jumping to some other business. Foreign GENERAL General Service manufacturers, especially from China, were using such markets as dumping ground for (ADMINISTRATION) Dep . pushing substandard products in IndiaHe was also cognisant of the fact that while millions Establishment were being spent on research and development for new products, a huge segment of the Dep . Indian market was aspiring for more affordable products. Over 80 percent of the smartphones Human sold in India are being made in China today, primarily due to their affordability1. The Resource geopolitical tensions between India and China might affect the future choices of Indian Development consumers but such sentiments may not last long in the absence of equally affordable Dep . alternatives (Exhibit D). Library Service Centre In suchmarket conditions is regulation the only way forward? Due to the quality requirements Hindi being enforced, the imports from China have decreased to a great extent in the recent Department past;would the industry be able to absorb the added costs of quality? The annual growth rate for industrial production in India was about negative 0.8 percent in scal year 2021, down from ACTIVITY HMD 3.8 percent in previous scal year. BIS has a responsibility to support the industry to break HEAD & DDG (Halimarking them out of unhealthy competition while upholding their commitment to quality. The cheaper (HALLMARKING Dep .) products at the cost of quality would harm both the manufacturers as well as the consumers. , FMCD & FMCD Healthy competition could help the manufacturers fetch a better price in the market as well as MSCD) (Foreign provide a better product to the consumer. Manufacture's Cer fica on He knew that increased licensing is not an end in itself but just a means to “protect the interests Dep .) of consumers”, as envisaged by the BIS Act. But the means to ensure that did not seem so MSCD straightforward. (Management Systems Catch-22 Cer fica on Dep .) Does an increase in the number of licenses really indicate improvement in the quality of products in the market? Is the certication system efcient enough to identify such DEPUTY LPPD- Laboratory manufacturers before unsafe products reach the markets? DIRECTOR Policy & Planning GENERAL Dep . Has mandatory certication served the purpose it was designed to serve? Are there better REGION Central Lab ways to nudge the manufacturers for adopting Indian Standards rather than through the legal (DDGR) Eastern Lab provision of mandatory certication? Western Lab ACTIVITY Northern Lab Will bringing more products under mandatory certication harm the small-scale industries HEAD & Southern Lab who may not be able to afford the BIS fees though their products may actually be up to the DDG Rengaluru Lab mark? (LAB) Guwaha Lab Patna Lab These questions confounded the team who were now searching for optimal solutions DIRECTOR GENERAL (DG) ACTIVITY HEAD & SSD-I 16 CASE STUDIES DDG SSD-II (STANDARDIZATION- IR&TISD SERVICE SECTOR) (Interna onal Rela ons & Technical Informa on Services Dep .) MSD (Management & Systems Dep .) ACTIVITY HEAD & SCMD- Standard Coordina on & ODD Monitoring Dep . (STANDARDIZATION- PRODUCTS & CED- Coil Engineering Dep METHODS) CHD- Chemical Dep ETD- Flectrotechnical Dep . FAD- Food & Agriculture Dep LIED- Electronics & IT Dep . MED- Mechanical Engineering Dep . MHD- Mechcal Equipment & Hospitals Planning Dep . MTD- Metallurgical Engineering Dep . PCD- Petroleum, Coal & Related Products Dep . PAD- Produc on & General Engineering Dep . TED- Transport Engineering Dep . TXD- Tex les Dep . WRD- Water Resources Dep . PUBUCATION & SALES ACTIVITY HEAD Central Marks & DDG Dep s. (SURVEILLANCE) CMD-I CMD-II ACTIVITY HEAD CMD-III & DDG Registra on (CERTIFICATION) Dep (CRS) CSMD (Cer fica on, Surveillance & Monitoring Dep .) ACTIVITY HEAD NITS (Na onal & DDG Ins tute for (POLICY, Standardiza on) RESEARCH TN&MD (Think, AND TRAINING Nudge & Move -PRT) Dep .) CMED (Complaint Management & Enforcement Dep .) PRTD (Policy, Research & Training) CHIEF Vigilance VIGILANCE Dep . OFFICER (CVO) ADDITIONAL Bureau DIRECTOR Sec . GENERAL Legal Dep . (ADG) Planning & Coordina on IT Services Dep . CCPAC PMWD 17
Exhibit B Exhibit D Results of market surveillance of ISI certied products in FY 2021-222 Factors that Indian consumers deem important before buying a product Quality 77% Price 53 Brand name 34 Country of origin 31 Others 7 0% 10 20 30 40 50 60 70 Quartz| qz.com |Data: YouGov Source: YouGov survey retrieved from scroll.in on 04 March 2022, Urban Indians care more about a product’s price and quality than if it is ‘made in India’ (scroll.in) Exhibit C Likelihood of an Indian shopper considering a product's origin country Likely Not Likely Smartphone gadgets 81% 19 21 Consumer electronics 79 23 25 Food and Beverages 77 26 28 Autombiles 75 32 35 Personal Care/Beauty 74 36 60 Internet/Social media apps 72 25 50 75 Fashion/Clothing 68 Pharmaceu cals 65 Telecom 64 Alcohol 40 0% 100 Quartz| qz.com |Data: YouGov Source: YouGov survey retrieved from scroll.in on 04 March 2022, Urban Indians care more about a product’s price and quality than if it is ‘made in CASE STUDIES 19 India’ (scroll.in) 18 CASE STUDIES
Exhibit E Should Jindal Steel & Power Go for BIS Certication? Results of market survey of non-ISI certied products in FY 2020-212 ekud% iFkizn'kZd% Sr. Product category No. of Samples not Percentage In the summers of 2021, Shri Ramesh Pushpakar, Head of Quality Control at Jindal Steel & No. samples conforming to failure Power (India’s leading steel manufacturing company) held a meeting with senior tested Indian Standard management team of production and marketing division regarding the compliance of one of 1 Food items 10% their primary products - Wire Rods [Exhibit-1], as per Indian Standards. The meeting was 73 7 49% chaired by Plant head Shri Abhishek Banerjee. The company was already having compliance 2% to international standards (Society of Automotive Engineers (SAE) standards and European 2 General Engineering items 49 24 77% Norms (EN)). It also had the capability to produce wire rods as per Indian Standard 87% specications, but had not sought Bureau of Indian Standards (BIS) licenses for some 3 Cosme cs 49 1 52% products due to multiple reasons. In the meeting, it was suggested that the government was focused on the quality of steel being produced and therefore, it was in the interest of the 4 Construc on and Building material 162 125 organization, keeping in the view the increased popularity of ISI marks, that the quality of the Wire Rods produced be aligned with the Indian Standards. However, Shri Rudra Malhotra from 5 Electrical items 47 41 production expressed his reservations on bureaucratic hurdles in dealing with a government body, the audits to be faced for the implementation of the Standards, and the subsequent fees Total 380 198 to be paid to the BIS. Exhibit F Keywords: Attendees of the Meeting BIS, Certication, Wire Rods, Standards, Steel, ISI 1. Mr Manoj Sinha, Director General BIS (Chairman) Current Market Situation 2. Mr Shekar Dixit, Deputy Director General Surveillance 3. Mrs Prathiba Pant, Deputy Director General Certication The production and consumption of steel is one of the basic indicators of progress of a 4. Mr Rahul Patil, Deputy Director General Finance modern economy. Indian Steel Industry is growing steadily and has become world’s second 5. Mr Sanjay Roy, Deputy Director General Laboratory largest steel manufacturer during 2018-2020 and produces about 100 Mt1 of steel [Exhibit-2]. 6. Mr Piyush Gupta, Deputy Director General Legal Amongst the major producers of steel in India, Jindal Steel and Power is a major steel producer, which contributes about 8% of the steel produced in India [Exhibit-3]. The major References competition in Wire- Rod production comes from other major steel producers such as Tata Steel, Steel Authority of India Limited (SAIL) and Jindal Steel Works (JSW). JSP is supplying a 1. YouGov survey retrieved from scroll.in on 04 April 2022. wide range of grades and dimensions in wire rods and round bars. This has helped in 2. Report of Phase-I Market Survey for FY 2020-21 by SCMD capturing the domestic market as well as having an international outreach. JSP achieved production growth of 8 to 9 percent2 consistently over recent years. The Company Jindal Steel and Power (JSP) was one of India’s primary & integrated steel producers with a signicant presence in sectors like Mining, Power Generation and Infrastructure. Jindal Steel and Power was incorporated in the year 1979. In the year 1995 the company forayed into power sector and started a company namely Jindal Power to engage the power sector. JSP Mohit Prabhat, Sachchidanand Kumar, Dhinesh Rajagopalan L, Vishal Kumar prepared this case. This case study has been prepared as part fulfillment of the training on Prepara on of Case Studies organized by NITS of BIS. Cases have been developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustra ons of effec ve or ineffec ve management. ©All Rights Reserved. No part of this case study may be reproduced, photocopied, electronically processed and forwarded without the wri en consent of BIS 20 CASE STUDIES CASE STUDIES 21
has its manufacturing units at Raigarh (Chattisgarh), Angul (Orrisa) and Patratu (Jharkhand). Going Forward The company established Wire Rod Mill and Bar Mill at JSP Patratu, Jharkhand during 2010-11 and since then it is consistently producing TMT Rebar and Wire Rods. JSP was committed to contribute to the national target of 300 Mt Per Annum steel production by 2030 by expanding its steel production capacity. JSP planned to invest 18,000 crore to JSP’s manufacturing facility at Patratu had a total nished steel capacity of 1.6 Million Tons Per boost its Angul steel capacity to 12 Mt by 2023. The expansion plan for 15mt envisages a Annum (MTPA). The company operates a Wire Rod Mill (0.6 MTPA) and a Bar Rod Mill (1 4.25mt blast furnace, 2.7mt direct reduced iron and 6.3mt steel melt shop, replicating the MTPA). These mills are equipped with the latest technology to offer high-quality products. present facilities at Angul. At Patratu, the management was adapting modern technologies for modications in the mills to fulll the customer requirements in terms of new grades and Wire Rods superior quality of the material. The Steel products are majorly subdivided into Flat Products (Steel Sheets, Plates etc) and During 2020-21, steel industry had witnessed impact of Covid-19 and there had been Long Products (Steel coils and wire rods etc). Steel wire rods are used to make various uncertainty on pace of recovery of the steel industry. Although, the prices of Steel products industrial products such as wires, threads, spokes, fasteners, screws, chain, springs etc. and had recovered and were buoyant, the demand of steel remained a concern [Exhibit -5] has a major demand from automotive sector [Exhibit-1]. The Wire Rod Mill and Bar Mill at Patratu were state of art, fully automatic production mills supplied and installed by renowned The Argument rm Morgan Worcester. It had a very ne control on quality and design parameters during production and had minimum manual operation. For Quality assurance, the labs were In the meeting, Shri Abhishek Banerjee sought views regarding the BIS certication of wire equipped with modern testing instruments for chemical, mechanical and microstructural rods at their manufacturing unit. parameters. JSP had focused on research and innovation and a Research & Development team was dedicated for process improvement and new product development. Shri Rudra Malhotra from Production informed that JSP had been producing the Wire-Rods as per International Standards and process of producing wire rods as per Indian Standards was BIS Certication Scheme very similar. There were no signicant technological requirements which needed to be altered and the production can be taken up in the Mills with the existing manufacturing facilities. BIS was operating certication scheme all over the country through 42 branch ofces to grant license for using BIS Standard mark (ISI). As on march 2022, BIS had around 40000 licenses However, he further opined that the Indian Standards were not in sync with global standards, for more than 1100 different kind of products3. BIS license was granted to a manufacturing unit and sometimes compliance with different standard, or additional requirement for exports was after verication of manufacturing, testing infrastructure, availability of competent testing required. Shri Ramesh Pushpakar reasoned that Indian Standards had been prepared personnel and testing of product against the corresponding Indian Standard. Further, after keeping into consideration of fundamental climatic or geographical factors and technological grant of license, BIS would continually monitor the quality of products manufactured by the problems of the country and therefore, at times, the national standards differ from International rm through periodic inspections, compliance to Scheme of Inspection and testing, random standards. drawl of sample from the market and testing it. Shri Ramesh Pushpakar added that a nancial implication in the tunes of 25 to 35 Lakhs Status of Existing Licenses each year would be paid to BIS as marking fee. Also, if there was no production of steel under a BIS license, still the minimum marking fee had to be paid. In addition, the BIS ofcers visit JSP The Patratu unit had obtained two BIS licenses in Wire rods as well as a license for TMT bars in for inspection to check compliance. Also, the scheme of testing and inspections by BIS was to the year 2011. Since then, the unit is continuously producing wire rods and TMT under these be complied which was an additional requirement to be met, and additional manpower may licenses and supplying to various customers. The annual production of wire rods has also be needed. The process of getting a license from a government body may also take increased from 5000-6000 Metric Tons in the rst few years to 30,000-35,000 Metric Tons longer. currently. In the next few years more licenses in Wire rods and Rounds were added. Later, Patratu unit got three more licenses in 2016 and one more in 2020. The production of wire-rods Smt. Vijaya Lakshmi, from the marketing division informed that the regulatory framework in has been increasing steadily for these licenses. [Exhibit- 4] steel industry was being strengthened by the Steel Ministry and more and more products were brought under mandatory BIS certication. Additionally, the popularity of ISI mark for Wire Marking Fee Rods was increasing and there was a considerable potential demand of wire-rods with ISI mark. There was a market ready to be tapped with ISI mark. The Bureau of Indian Standards, national standards body of India, charged marking fee as a royalty for using BIS standard mark (ISI) on the steels produced. The marking fee varied It was commonly agreed that for some grades of the steel Wire Rods, Indian Standard was the between T 3 per tons to T 8.1 per tons of steel, with minimum marking fee for each license way to go as these were covered under the BIS Mandatory Scheme. It was apprehended that varying between T 66,000/- to T 1,05,000/-. The total volume of steel production capacity at the Mandatory Certication Scheme would help JSP to keep its market share intact, by JSP Patratu was 1.6 Million Tons Per Annum, and production of 1 Million Tons per annum was preventing the dumping4 of substandard steel products by foreign players. [Exhibit-6] being achieved, out of which approximately 50% to 60% production is of Steel grades covered in the BIS License. Hence, based on production, a total marking fee of about T 25 – T 35 Smt. Vijaya Lakshmi added that in many of the bulk order tenders compliance to the Indian Lakhs was paid by JSP Patratu to Bureau of Indian standards. [Exhibit- 4] Standards was necessary to participate in them, and hence it was benecial to have the 22 CASE STUDIES CASE STUDIES 23
grades produced at the plant be covered under BIS certication scheme. It helps in marketing Exhibit 2. Volume of Production of Steel Worldwide and sales of the steel produced. Retail customers and small industries also value ISI mark and the product was perceived to be reliable and of better quality. Sl. No. Country Thousand Tonnes The members had given their viewpoints and all eyes expectantly looked at Shri Abhishek Banerjee. Shri Banerjee removed his pair of spectacles and 1 World 1951, 924 pondered deeply on the issues. 2 China 1032, 790 Disclaimer: 3 India Some of the dates, names, places and incidents in the above case study have been changed to maintain the flow and essence of the case. 4 Japan 118, 244 References: 5 United States 96, 334 1.h ps://worldsteel.org/steel-by-topic/sta s cs/annual-produc on-steel- data/P1_crude_steel_total_pub/CHN/IND 6 Russia 85, 791 2.worldsteel.org – top steelmakers 7 South Korea 75, 585 3. h ps://www.manakonline.in/MANAK/ConformityAssessment 70, 418 4. h ps://www.dgtr.gov.in/an -dumping-cases Source: worldsteel.org EXHIBITS Exhibit 1. Wire Rod Image: Exhibit 3.Volume of Production of Steel by Indian Steel Producers Source: Retrieved from Official Twi er handle JSP on 05 April 2022 Sl. No. Name of Steel Company Exis ng Capacity (Million Tonnes) 24 CASE STUDIES 1 JSW Steel Ltd. 18.00 2 Tata Steel Ltd. 13.00 3 Steel Authority of India Limited 4 Essar Steel India Ltd. 12.9 5 Jindal Steel and Power Ltd. 10.00 6 Electrosteel Steel Ltd 7 Jindal Stainless Ltd. 8.6 8 Jindal Stainless (Hisar) Ltd. 1.88 0.80 0.78 Source: Annual Report 2019-20, Ministry of Steel Exhibit 4. Marking Fee of existing BIS License at JSP as on March 2022: Sl. No. Indian Standard Marking Fee per ton Minimum Marking Fee 1 IS5517 ₹ 3 per ton ₹ 94000 2 IS11169 ₹ 3 per ton ₹ 79000 3 IS7904 ₹ 8.1 per ton ₹ 70000 4 IS2879 ₹ 3 per ton ₹ 74000 5 IS7887 ₹ 3 per ton ₹ 66000 6 IS2062 ₹ 4 per ton ₹ 72000 7 IS1786 ₹ 3 per ton ₹ 105000 8 IS7283 ₹ 4.2 per ton ₹ 71000 CASE STUDIES Source: www.bis.gov.in 25
Exhibit 5. Price of Steel over 2017-2022: Exhibit 8. Indian Standards on Wire Rods and Bars: Exhibit 6. Data on Indian Standards brought under mandatory BIS Sl. Indian Standard Title Certication for steel in last 14 years: No. High carbon steel wire rods- Specication No. of ISS of Steel under Quality Control Order 1. IS 7904:2017 Hot rolled medium and high tensile structural steel Source: h ps://steel.gov.in/quality-control-orders-archive 2. IS 2062:2011 Mild Steel and Medium Tensile Steel Bars and Exhibit 7. JSP revenue 3. IS 432 : Part 1:1982 Hard–Drawn Steel Wire for Concrete Reinforcement: Part 1 Mild steel and medium tensile steel bars 26 CASE STUDIES 4. IS 432 : Part 2:1982 Mild steel and Medium Tensile steel bars and Source: JSP annual report 2020-21 5. IS 2879:1998 Hard–Drawn Steel Wire for Concrete Reinforcement: Part 6. IS 7283:1992 2 Hard- Drawn Steel Wire 7. IS 7887:1992 Mild steel for metal arc welding electrodes. 8. IS 280: 2006 9. IS 1835:1976 Hot Rolled bars for production of bright bars and 10. IS 3975:1999 machined parts for engineering applications. 11. IS 4454 (Part 1) : 2001 Mild steel wire rods for general engineering purposes. 12. IS 4454 (Part 2): 2001 Mild steel wire for General Engineering purposes. 13. IS 4824:2006 Round Steel wire for ropes 14. IS 11169 (Part 1): 1984 Low Carbon Galvanized steel wires formed wires and 15. IS 11169 (Part 2): 1984 Tapes for armouring of Cables 16. IS 6527:1995 Steel wire for mechanical springs Part-1 cold drawn 17. IS 6528:1995 unalloyed steel wire. 18. IS 6603:2001 19. IS 1673: 1984 Steel wire for mechanical springs Part-2 oil hardened and 20. IS 1812: 1982 tempered steel wire. 21. IS 2255: 1977 Bead Wires for Tyres Steels for Cold Heading/Cold extrusion application Part-1 Wrought carbon and low alloy steels Steels for Cold Heading/Cold extrusion application Part-2 Stainless steels Stainless Steel wire Rod Stainless Steel Wires Stainless Steel Bars and Flats Specication for Mild Steel Wire, Cold Heading Quality Specication for Carbon Steel Wire for the Manufacture of Wood Screws Specication for Mild Steel Wire Rod for the Manufacture of Machine Screws (By Cold Heading Process). CASE STUDIES 27
22. IS 4224: 1972 Specication for Steel Wire for Staples, Pins And Clips. ekud% iFkizn'kZd% Promoting Quality Infrastructure 23. IS 6902: 1973 in India: The role of BIS 24. IS 7557: 1982 Specication for Steel Wire for spokes. Abstract 25. IS 9962: 1981 Specication for Steel Wire: (Up to 20 mm) for the 26. IS 4882: 1979 manufacture of cold-forged rivets Bureau of Indian Standards (BIS) is the national standards body of India, for the last 75 years, charged with building the quality infrastructure of the country. It has been helping industry to 27. IS 2090:1983 Specication for Steel Wire for Needles provide quality products to the customers. The GOI mandates that pBISto ensure the availability of quality goods in the market basically (consumer safety) However, India is far 28. IS 4454 (Part 4): 2001 Specication for Low Carbon Steel Wire for Rivets for use behind in developing quality infrastructure when compared to some of the more developed in Bearing Industry nations. Currently, the organization offers 10000 product standards out of which only 1100 are 29. IS 8563: 1977 under certication. The Indian Standards published by BIS are primarily voluntary in nature Specication for High Tensile Steel Bars used in Pre- and manufacturers are not necessarily required to have BIS licenses to manufacturer/ sell their 30. IS 3885-Part-1: 1992 stressed Concrete products. To maintain the quality infrastructure of India as developed countries have, there is a need to bring more products under BIS certication and also to make people aware about the 31. IS 3885-Part- 2: 1992 Steel Wires for Mechanical Springs- Part 4: Stainless Indian Standards, which ensures they buy quality products from market. This case elaborates Steel Wire the different approaches that may be undertaken to ensure awareness among products all 32. IS 2589: 1975 over the country and whether they are economically viable and implementable. The case also 33. IS 8564: 1977 Half Round Mild Steel Wire For The Manufacture of Split analyses the success and failures of BIS in promoting quality infrastructure in the country. 34. IS 8565: 1977 Pins 35. IS 8566: 1977 Keywords: 36. IS 1148:2009 Steel for the manufacture of laminated springs (railway rolling stock) Part 1 Flat Sections – Specication. BIS, Quality, Promotion, Manufacturers, Consumers, Indian Standards. 37. IS 1990:2009 38. IS 122262:1988 Steel for the manufacture of laminated springs (railway BIS Background rolling stock) Part 2: Rib and Groove Sections- Specication Bureau of Indian Standards (BIS) is the National Standards Body (NSB) of India and it has been carrying out the three core activities mainly standard formulation, product certication Hard Drawn Steel Wire For Upholstery Springs and laboratory services for last 75 years. BIS has been constantly working towards building and improving the quality infrastructure of the country over the years by granting and Steel Wire For Nipples For Spokes operating around 40000 licences of various products like steel, cement, packaged drinking water, transformers, cables, conductors, electrical appliances, plywood, plastics, jute, Heald Wire hallmarking of gold and silver etc. Steel Wire For Reeds BIS issues licenses to manufacturers to use the BIS standard mark (Logo) on their products, when the manufacturer establishes that the product conforms to the requirements specied in Steel Rivet Bars (Medium and High Tensile) – For the relevant Indian Standards. The operational activities are conducted through 42 branch structural Purposes ofces (BOs), spread across the country (Exhibit 1). Steel rivet and stay bars for boilers (Second revision) The total number of licence granted by BIS has nearly doubled in last 15 years (Exhibit 2). However, it was observed that out of the total 1100 product Standards currently under Specication for trapezoidal steel wire for spring washers certication, 200 product Standards have been notied for mandatory certication and there are approximately 18000 licences granted against these Standards. Whereas, approximately Ramankanth Sagar, A. Arivazhagan, Peeyush Prakash, Ishita Dalal, Shivam Dwivedi prepared this case. This case study has been prepared as part fulfillment of the training on Prepara on of Case Studies organized by NITS of BIS. Cases have been developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustra ons of effec ve or ineffec ve management. ©All Rights Reserved No part of this case study may be reproduced, photocopied, electronically processed and forwarded without the wri en consent of BIS. 28 CASE STUDIES CASE STUDIES 29
21500 licences are issued against 950 Standards under voluntary certication (Exhibit 3). It is BIS has a world class training institute to organize training programs for persons across the evident that the average number of licences granted against a mandatory product Standard industry to make them aware of practices to be followed for maintaining quality of product. far exceeds the average number of licences granted against voluntary product Standards BIS has also a large number of empaneled laboratories other than its own labs to test products (Exhibit 3). Exhibit 3 shows there are less licences for products which are not covered under as per the Indian Standards. mandatory certication. The cost involved in getting and operating a BIS licence are minimal and discounts are also Even though BIS has been organizing many activities for promotion of BIS licence for given to MSMEs. Further, additional support is also given to All India First Licences. Grant and voluntary Standards amongst manufacturers and consumers, the number of licences against operation of licence by BIS is governed by the BIS Act 2016, BIS Rules 2018, and BIS voluntary products has not levelled up to the number of licences against mandatory product (Conformity Assessment) Regulations 2018. Further, many guidelines for ease of operations Standards. There are two major challenges: (a) A low awareness of using quality products by are also formulated, which are available on public portal on BIS website. All the indigenous consumers, and, (b) Lack of awareness of BIS certication scheme and its benets for the standards developed by BIS are available in public domain free of cost. manufacturers. The operations are conducted through the 42 BOs located across India. The working of the The Current Scenario BOs is coordinated by the ve Regional Ofces (ROs) and by Central Mark Departments (CMDs) located at New Delhi. Details of all the BOs, ROs is also available on BIS website. BIS develops Indian Standards on a variety of subjects specifying the requirements of raw materials, quality of products, methods for testing, codes of practice, etc. Quality per se may Even though BIS has a rich repository of highly qualied technical ofcers to carry out their mean different to different persons;it may signify safety for some, while for others it may mean core activity, i.e. Standard formulation, testing, certication, yet, the ofcers have less cost effectiveness. Even though the Standards ensure a minimum level of safety, usability, and exposure of promotional and marketing strategies. Restrained by the ongoing COVID 19 efciency for the product, the number of licences for products under voluntary certication pandemic, BIS has to ensure that it now recovers lost ground to capture market share. indicates that standards are yet to gain popularity. This may be attributed to the lack of awareness amongst the manufacturers as well as the consumers. Effects of COVID-19 BIS has to nd better ways in promoting voluntary Indian Standards amongst manufacturers The economic impact of the COVID-19 pandemic in India has been largely disruptive. India's and consumers to make quality product available to all. Further, BIS also has to make strategic growth in the fourth quarter of the nancial year 2020-21 declined to 3.5% according to the changes in promotional activity based on regional and socio- economic scenarios of the Ministry of Finance2. The Chief Economic Adviser to the Government of India attributed the target region. drop to the coronavirus pandemic effect on the Indian economy. Notably, India had also been witnessing a pre-pandemic slowdown, and according to the World Bank, the current Exhibit 4 shows the current marketing structure followed at BISPresently BIS has a dedicated pandemic has \"magnied pre-existing risks to India's economic outlook3\". Public Relationship (PR) department comprising a team of four personnel headed by Director (PR), stationed at Head Quarters, New Delhi and reportingto the Additional Director General, The pandemic has brought several economic hardships Further, implementation of many BIS. Its functions comprise the following: (a) collecting data from various department for Quality Control Orders (QCOs) issued by Government of India (GOI) were delayed due to the promotional activities undertaken (b) promoting BIS activities through various media; (c) pandemic. publishing inhouse magazine for promotion of BIS activities. Handholding approach of BIS during pandemic Additionally, the BOs located across India conduct various promotional activities like industry meets, consumer outreach program and formation of Standards clubs. The media covered by To ease the operational cost on manufacturers during the pandemic, BIS offered 20% rebate in the PR department include print media like newspaper, magazines, digital media and mass the marking fee for manufacturers. Recently, BIS introduced the ‘Homecoming’ scheme for media such as television and radio channels. BIS has also ensured visibility on social media licences that, however,expired due to administrative reasons. platforms to market its standards. These include LinkedIn (Exhibit 5), Instagram (Exhibit 6), Facebook, Twitter (Exhibit 7), and YouTube channels to promote the same. However, despite Success Story an expenditure of approximately INR 10.5 crores in FY 2020-211, the number of voluntary licenses has not increased proportionately. This is a matter of concern at BIS despite its wide Four stories illustrate the success of promotional activity made by BIS and these are recounted portfolio of products and services. below: Products and availability Packaged Drinking water The Indian Standards are formulated by Committees constituting of experts of the product, In early 2005, Packaged Drinking Water (PDW) manufacturing units were the most industry associations, consumer forums, academics, laboratories and representatives of unorganized business sector in the Indian market. considering the health and safety of the various ministries. This ensures that the standard formulated are at par with international consumer or the end user, the Ministry of Consumer Affairs (MoCA) in consultation with BIS standards as well suitable for use in the country. The certication activity is conducted against had made the manufacturing of PDW under mandatory certication. these Standards. Since 2005 with the conscious efforts of BIS and its investment in promotional activities BIS 30 CASE STUDIES CASE STUDIES 31
granted 6364 licenses for Packaged Drinking water units This led to an increase in the quality many industries, it is still recognized on the basis of its the old ISI mark. BIS has to evolve and consciousness within the industry and led to an enhanced awareness amongst health revamp its image and positione itself as the sole certication body for majority of products in conscious consumers . This has only been possible by the rigorous publicity that BIS had India. BIS has to further decide which promotional strategy is to be used for a specic target undertaken over last couple of years. According to market survey reports of a popular survey audience for the promotional activity. agency, awareness regarding conscious consumption of ISI marked PDW has increased by 28% in last 3 years, which was denitely a great achievement for BIS. BIS may introspect its activities and decide whether enough is being done for identifying and navigating itself towards untapped industries like photovoltaic industry, electrical vehicles Steel industry, and toy industry Presently, India is the 2nd largest steel producer in the world. In order to achieve a full quality BIS is promoting the Indian Standards on various platforms through seminars, webinars, short regime, the Ministry of Steel notied the Steel and Steel Products (Quality Control) Order, videos, national television, newspaper, however, BIS has yet to enterareas which can further 2020. be used for promoting the Indian Standards. BIS has to decide what other platforms can be used for promoting the quality infrastructureIt has also to check if it would be economically To ensure smooth implementation of the QCO and to prevent any confusion amongst the steel viable to use such platforms for its promotion industry, BIS conducted many seminars and meeting with the industry associations, manufacturers and the Ministry of Steel. Further, information related to product certication, How should BIS revamp its promotional policy? How should it evolve its Segmentation , such as the guidelines, procedures to be followed and FAQs were made available on public Targeting and Positioning capabilities to position its revamped image? Considering that portal for access to everyone. At the beginning, hand-holding was also done so that majority of workforce of BIS is from technical background, should BIS consider recruiting manufacturers could get licence without any hassles. By virtue of these steps taken by BIS, the professionals from marketing and sales background for its promotional activities? What steel sector could get organized. approach should BIS take to reach consumers and manufacturers still unaware of itsactivities? Gold Hallmarking CASE STUDIES 33 BIS has made a number of efforts to raise awareness of the hallmarking scheme among the general public. The precise determination and ofcial recording of the proportionate quantity of precious metal in precious metal products is known as hallmarking. The Hallmarking Scheme's major goals are to protect the public from adulteration and to compel manufacturers to adhere to regulatory neness standards. Two precious metals, gold and silver, have been brought under the ambit of hallmarking in India. The voluntary hallmarking scheme was established in 2004, and it has become mandatory in 2021. High Density Polyethylene pipes for Potable water supply Earlier the pipes of potable water used to be made from Cast Iron or from cement. Over time these pipes corroded and created health hazardsto persons obtaining the water through these pipes. In order to safeguard the consumers, BIS developed Standard for 'High Density Polyethylene (HDPE) pipes for Potable water supply'. After publishing the Standard, BIS undertook various promotional and awareness activities to promote licence against the Standard. Further, samples of water being supplied to household were also tested from localities which used HDPE pipes and also from localities where cast iron and cemented pipes. After testing it was observed that water supply where HDPE pipes were not used had many impurities which had adverse effect on health of humans. These results were made public to make people aware about the potential dangers of using cast iron and cement pipes for potable water supply. Moreover, people were also encouraged to switch to HDPE pipes for use. Through these promotional activities, BIS could sensitize huge population towards use of HDPE pipes. Consequently, the number of licences for product also increased signicantly. Conclusion BIS now needs to quickly decideon an effective and efcient executionable strategy for promoting quality infrastructure in India and make people aware of its work and also to raise the general awareness of the public in the role of BIS. Even though BIS is a major player in 32 CASE STUDIES
Exhibit Exhibit 1: Distribution of BOs across India (source: internal document) Exhibit 3: Comparison of Mandatory and Voluntary Certication Exhibit 2: Number of licences in product certication in last few years Exhibit 4: Current promotional structural at BIS 0315 34 CASE STUDIES CASE STUDIES
Exhibit 5: LinkedIn prole of BIS Exhibit 7: Twitter page of BIS Exhibit 6: Instagram page of BIS Reference 1. Taken on 04.04.2022 from Annual report of BIS - 2021 2. Taken from the website h ps://www.pib.gov.in/PressReleasePage.aspx?PRID=1693231 on 04.04.2022 3. Taken from the website h ps://www.republicworld.com/india-news/economy/covid-19-causes-severe-disrup on-to-indian-economy-says- world-bank.html on 04.04.2022 36 CASE STUDIES CASE STUDIES 37
ekud% iFkizn'kZd% Dilemma of a Packaged Drinking Water The new director Dr. Vandana Thakur who joined in place of Mr. Amit Kumar already had Unit: How to Remain Competitive in experience of PDW business; proposed some radical changes in the unit and implemented strict quality control checks to ensure conformity to BIS Standard on packaged drinking water. Market and Still Comply with BIS Norms? After a couple of months, the company review indicated that all the PDW samples were complying with BIS Standard and a market survey also showed higher acceptance of PureE Abstract brand amongst the consumers. Financial gures also showed good benets being accrued to the company (about 10 percent rise in sales from pre-COVID times), however, high production Packaged Drinking Water is one of the most widely used product not only in India but across cost was still a major concern. Even after this, Mr. Harpal Singh was in a x whether they should the entire world. The quality of the drinking water is of utmost importance as it directly affects concentrate on earning more benets for which they may have to implement some cost cutting the health of human being. Therefore, the government has made BIS certication compulsory measures or should continue strict quality checks for compliance with BIS Standard!!! for the manufacture, sale or exhibition for sale of packaged drinking water in the country. Background The packaged drinking water unit, M/s PureE Beverages India Pvt Ltd, Sonipat was adversely affected by the COVID-19 pandemic. Considering the signicant drop in prots, Mr. Harpal Packaged Drinking Water (other than natural mineral water) and Packaged Natural Mineral Singh, one of the managing directors planned to implement some cost cutting measures to Water were brought under mandatory BIS certication through Quality Control Orders sustain the current level of prot margins. However, this approach had its own repercussions GSR759(E) and GSR 760(E) dt. 29.09.2000 w.e.f. 29.03.2001. Thereafter through the Food as it might result in non-conformity of the product and compromise of brand value. One of the Safety and Standards (Prohibition and Restrictions on Sales) Regulations, 2011 dt. new directors, Dr. Vandana Thakur was not quite in favour of the suggested approach; 01.08.2011 it was notied that “No person shall manufacture, sell or exhibit for sale packaged alternatively, she proposed to implement some stricter quality control measures to avoid non- drinking water except under the Bureau of Indian Standards Certication Mark.” conformity of the product. Though the company’s sales showed an increasing trend with these measures, the production cost also increased. Mr. Harpal Singh was sceptical whether Bureau of Indian Standards, the national standards body working under the aegis of Ministry the company would have sufcient liquidity to be able to full their short-term liabilities. Should of Consumer Affairs, Food and Public Distribution, Government of India formulates Indian the company concentrate on protability by implementing cost cutting measures or continue Standards in all areas of science and technology. BIS through its Drinks and Drinking Water with strict quality checks implemented recently? Sectional Committee, FAD 14 has published Indian Standards IS 14543 . All these standards are covered under mandatory BIS certication. Packaged Drinking Water as dened in IS Keywords: 14543 : 2016 is “water, other than natural mineral water that is likely to be used for human consumption and that is offered or sold in packaged form, by whatever name it may be called, Packaged drinking water, BIS, Quality control, Standards offered or sold”. The Dilemma As per the Trade Promotion Council of India, the packaged drinking water market in India was valued at $24 billion in 2019 and expected to grow to $60 billion by 2023. There are currently While following his usual route during morning walk, Mr. Harpal Singh was reminiscing about 6547 operative BIS licences of Packaged Drinking Water (other than Packaged Natural the pre-COVID times when his packaged drinking water business was booming and life was Mineral Water) in the country out of which around 2990 licences are in southern region, 1435 turning the corner towards a positive note. He was one of the directors at M/s PureE Beverages licences in western region, 633 licences in central region, 248 licences in northern region and India Pvt. Ltd., Sonipat which was in the business of manufacturing Packaged Drinking Water. 1016 licences in eastern region. He was not involved in day to day functioning which was done by Mr. Amit Kumar who was also a director. The COVID-19 pandemic had adversely affected his business bringing a double Processing of PDW and Bottling whammy of drastic loss in sales along with the untimely demise of Mr. Amit Kumar. The 300 kl monthly sales of the company reduced to 100 kl after the pandemic hit the country. First the raw water to be processed is collected in tanks. The source of raw water may be surface water or civic water supply or underground water or sea water or any other consistent Mr. Harpal Singh was really worried about the future of the company and wanted to curtail source of water. A known quantity is pumped into the raw water tank where the water is dozed some of the manpower. However, all the directors were not on the same page regarding the with alum for coagulation with heavy metals or insoluble matters. The water after coagulation cost cutting measures and were quite jittery about consequences, especially about likely is allowed to settle for an hour. The supernatant water is taken to the chlorination tank where compromise in the quality of its product, which may lead to suspension of license of the unit. primary disinfection is brought about by bubbling chlorine gas. The water is then passed through sand lters for trapping of undissolved impurities. The water after sand ltration is Bhawana, Ashish Kumar Kanar, Pravir Kumar Choubey, Shivam Soni, Hari Mohan Meena prepared this case. This case study has been prepared as part passed through Carbon lters for removal of odour, colour and also for dechlorination. It is fulfillment of the training on Prepara on of Case Studies organized by NITS of BIS. Cases have been developed solely as the basis for class discussion. then passed through series of micro llers comprising 5 micron, 1 micron which is then passed Cases are not intended to serve as endorsements, sources of primary data, or illustra ons of effec ve or ineffec ve management. through RO system to remove harmful chemicals. The output water from RO is passed ©All Rights Reserved through 0.5 micron lter followed by ultraviolet disinfection system for terminal disinfection. No part of this case study may be reproduced, photocopied, electronically processed and forwarded without the wri en consent of BIS. Silver ionization and ozonation are also methods generally used for disinfection. Packing is 38 CASE STUDIES CASE STUDIES 39
done in PET bottles of different capacities through an automatic rinsing, lling, and capping As per BIS norms, a manufacturer of PDW has to maintain both chemical and microbiological machine tted with an Ozone generator. The bottles after capping are shrink wrapped or labs and ensure proper testing as per Scheme of inspection and testing (SIT) issued by BIS. packed in corrugated boxes of one dozen each. As per SIT some of chemical and microbiological tests have to be carried out for each control unit. The control unit as dened in SIT is the quantity of packaged drinking water IS 14543 : 2016 does not prescribe any specic method for processing of packaged drinking treated/processed from each processing line and lled/packed in one day. While some tests water. Raw water may be subjected to decantation, distillation, ltration, combination of may be outsourced to a BIS recognized third party lab as per the frequency stipulated in SIT. ltration, aerations, ltration with membrane lter, depth lter, cartridge lter, activated carbon ltration, demineralization, remineralization, reverse osmosis and packed after disinfecting BIS eased its earlier norms regarding engaging two quality control personnel (one chemist the water to a level that shall not lead to any harmful effect in the drinking water by means of and one microbiologist). Now PDW manufacturers can engage one competent quality control chemical agents or physical methods to reduce the number of micro-organisms to a level person to carry out the different tests in accordance with the methods given in the Indian below scientically accepted level for food safety or its suitability. If sea water is used as source standards. of raw water, it shall be rst subjected to desalination before taking up for further processing. In case remineralization is part of the treatment process, the ingredients used shall conform to The source of raw water for production of packaged drinking water is generally ground water. food grade/pharma grade quality. The ground water is extracted either through borewell or open-well. The major challenge being faced by the manufacturers is degradation of ground water due to chemical pollution by A typical process of manufacturing packaged drinking water is shown in Exhibit I. factories and application of pesticides in agriculture and plant location. The continuous depletion of ground water also poses a major challenge to the quality of nished product as About the company well as installed machineries. The manufacturer has no control on this issue and hence, it is mandatory for them to regularly assess the quality of ground water and adhere to the M/s PureE Beverages India Private Limited, Sonipat was established in September 2017. guidelines of ground water board of the state. This becomes an invariable nancial liability to There were three directors in the company namely Mr. Amit Kumar, Mr. Harpal Singh and the manufacturers. Mr. Arunabh Kumar. The rm had got BIS licence in January 2018 for manufacturing packaged drinking water. They were packing PDW in various pack sizes viz. 20 litre PET jars, 1 litre and Viewpoint of Mr. Harpal Singh 250 ml PET bottles. They had gone into an agreement with a renowned MNC for using their brand name PureE. There were total 12 personnel employed in the unit including one chemist Mr. Harpal Singh wanted to curtail production cost by implementing some cost cutting and one microbiologist. Mr. Amit Kumar used to supervise the daily functioning of the unit measures. He planned to remove one of the quality control personnel and two labourers who since its inception and was involved in the liaison work related to BIS and other regulatory were involved in day to day maintenance of hygienic condition. He was aware about the bodies. change in BIS norms through which one competent quality control person had been permitted for PDW units. The idea to reduce the frequency of cleaning of the plant premises and product The pandemic was a double whammy for the company as along with decrease in sales, it had lines along with modifying the pest control schedule of the plant for the time being also also brought upon a sudden demise of one of the directors Mr. Amit Kumar. Now cropped up in his mind. He also decided to stop the company advertisements and also to stop Mr. Harpal Singh was in a dilemma. He wanted to curtail the costings as company sales were the practice of giving free water dispenser for large retailers temporarily. Meanwhile, a market plummeting. But the company still needed to follow the BIS standards and other regulatory sample of M/s PureE Beverages India Private Limited drawn by BIS was found to be non- norms. Before the pandemic, the monthly production of PDW of the plant was around 300 kl conforming in the requirement of aerobic microbial count and yeast & mould. This was the rst and cost of production per kl was around Rs. 6000/-. There was a xed cost of around Rs. 2.35 non-conformity of sample and BIS had issued an advisory to the company to assess the lacs per month. Other than that, royalty of Rs. 10/- per carton had to be paid to the owner of quality control system of the plant so as not to repeat further non-conformity of samples. brand. The selling price per kl was around Rs. 11000/-. The sales gures had declined to one third of the original 300 kl per month before pandemic. The detailed nancial gures before Viewpoint of Dr. Vandana Thakur and after pandemic are given in Exhibit II. Dr. Vandana Thakur joined as one of the directors replacing Mr. Amit Kumar in the company Quality control and hygienic conditions for PDW after one month of the rst wave of COVID-19 pandemic. She had prior experience in the eld of working in PDW industry. While interacting with Mr. Harpal Singh, she came to know about Packaged drinking water is to be tested for organoleptic, chemical, microbiological and cost cutting measures which were being implemented in the plant. They also discussed radioactive parameters as per IS 14543 : 2016. Source water is to be collected, processed, regarding the non-conformity of sample in microbiological requirements and ways to ensure handled, packaged and marketed as per the hygienic practice given in the standard following that such failures are not repeated in future. Dr. Vandana Thakur was conversant with product good hygienic practices and food safety system for packaged water processing units. These recall instructions issued by BIS to a number of packaged drinking water units recently. As per good hygienic practices include regular cleaning of raw water and processed water tanks, the latest product recall guidelines, BIS has the authority to tell the licensee to recall non- monthly pest control of manufacturing unit, regular medical check-up of all personnel involved conforming batch from market/dealer/distributor. Dr. Thakur was of the view that the cost in processing of PDW and designating one person for monitoring of overall health and hygiene cutting measures should not affect the quality of their product as it would incur losses to the at the unit. company and hamper their brand reputation. She also recalled that during her tenure in the 40 CASE STUDIES CASE STUDIES 41
previous PDW unit, a customer survey was carried out and majority of the participants were invest more capital in implementing new schemes in already nancially difcult scenario. The aware about the mandatory BIS certication for packaged drinking water and always checked third director Mr. Arunabh Kumar was sitting on the fence. He was not able to judge the ISI mark on the pack. In order to ensure conformity to BIS Standards without any failure and implications of the cost cutting measures. While he was aware that curtailing cost is minimize the risk of stop-marking, she urged that they should strictly comply with the quality tantamount in the current situation, he also did not want the implications to be catastrophic to control and safety requirements prescribed in BIS Standards and other regulatory norms. Mr. the brand value of the company. The three of them were nding it difcult to reach on a Harpal Singh was apprehensive whether the company would have sufcient liquidity to be consensus. able to pay their monthly expenses. After a couple of months, the company review indicated 100 percent products conforming to the BIS standard and a market survey indicated higher CASE STUDIES 43 acceptance of PureE brand in the consumers. Financial gures also indicated 10 percent increase in company sales. The nancial gures of the company before and after the COVID- 19 pandemic are given in Exhibit II. Though the xed and total cost of production increased marginally from the pre-COVID times due to measures implemented by Dr. Vandana Thakur, however, the prot analysis indicated that the company was able to regain their prot margins (see Exhibits III and IV). With the vision of driving the company’s growth further to fetch long term intangible benets to the company and to make the brand more popular and acceptable amongst consumers, Dr. Vandana Thakur proposed some radical changes. Knowing that consumers are increasingly getting attracted towards environment friendly products, she decided to make some modications in the packaging process, reducing the use of plastic in the bottles and ushing the head space of bottles with nitrogen to compensate for the strength of the bottle. This change would result in saving approximately 2.5 gm of PET per bottle and hence reduce the packaging material cost. However, the cost of the facility for nitrogen ushing would initially involve a capital investment of Rs. 25 lacs. As a CSR initiative, she also wanted to implement protocols for collection of used plastic bottles/pouches for recycling purpose and installed rain water harvesting system and waste water treatment plant for replenishment of the ground water level. Further, for electricity generation, she installed a small solar plant in the unit. To ensure that proper hygienic conditions are in place as per the BIS Standards, she installed contactless hand washing stations for the personnel. Further, Dr. Thakur planned to implement Food Safety Management System in the plant so as to consistently provide safe product and services that meet customer and applicable statutory and regulatory requirements. Even after this, Mr. Harpal Singh was in a x whether they should concentrate on earning more benets for which they may have to compromise with the quality or should continue strict quality checks for compliance with BIS Standards!!! The road ahead The directors decided to call a board meeting to discuss on the suggestions of Dr. Vandana Thakur and Mr. Harpal Singh. Dr. Thakur informed that implementing FSMS in the plant will control food safety hazards in the process chain and ensure that PDW will be safe at the time of human consumption. She stressed that through the new measures suggested by her may incur huge capital investment by the company, however, in the long term, they would aid in gaining more prots to the company and increase brand value. She was also sceptical of cost cutting measures suggested by Mr. Harpal Singh and apprehended that any compromise on quality might have huge nancial repercussions for the company in long term. Though adherence to the standard norms and practices may increase the nancial burden at the present time, however, it is expected to reap prots in the long run. However, Mr. Harpal Singh was pretty sure that the cost cutting measures will bring increase in prots and ensure nancial viability in the market. He felt that it is not nancially prudent to 42 CASE STUDIES
Exhibit I Exhibit II Process Flow Chart Financial review gures (per month) Incoming Source Water Step 1 Sl. Parameters Values Step 2 No. 300 kl To Raw Water Tank PSF Online Chlorine Dosing 3-5 ppm Step 3 Rs. 6000/kl Step 31 Recovery PSF Lampack Step 4 Rs. 10000/- Step 30 1. Production per month before COVID-19 pandemic Rs. 40000/- (Rs. 20000 each) Rs. 100000/- (Rs. 10000 each) Storage of Chlorinated water in Rs. 10000/- Rs. 50000/- Step 29 Backwash Recovery Water Backwash 2. Cost of production Rs. 5000/- Rs. 30000/- (including MGF/Sand Filter shipping charges of samples to lab – Rs 3000) Backwash Water Ultra FIlteration Automatic UF Back Flush Step 5 3. Certication cost per month Rs. 45000/- (including shipping charges of samples Step 28 to lab – Rs 3000) Rs. 10/carton (1 Carton = 12 L) UF Water Storage Step 6 Rs. 110000/- 300 kl Backwash Water Recovery Line 4. Renumeration to 2 quality control persons 100 kl Backwash Water Line Activated Carbon Step 7 330 kl Chlorine 5. Salary to labourers (10 nos.) Rs. 11000/kl ORP Step 8 Nil Chlorine Drain to ETP 6. Outside testing Lead Activated Step 9 Lag Activated Carbon Step 10 7. Electricity charges 5 Micron Cartridge Step 11 8. Pest control ORP Chlorine Step 12 9. Miscellaneous (before COVID-19 pandemic) Drain to ETP Step 13 Antiscalent 7 Caustic Nil Chlorine Step 14 Reverse Osmosis RO Reject RO Reject Water Step 21 Step 22 RO Permeate Step 23 ORP Step 15 RO Permeate Water Softener ORP Soft Water Storage ORP 10. Miscellaneous (after COVID-19 pandemic) ORP Step 16 10/05 Micron Step 17 05/03 Micron RO Permeate Recovery RO RO reject to ETP Step 26 Step 27 Step 18 Passed Through UV 1-3 ppm Chlorine Step 24 11. Royalty to brand owner OPRP Step 19 01 Micron Cartridge 12. Loan EMI per month CCP Utility Step 25 13. Total sales volume before COVID-19 pandemic Step 20 Treated To Boiler 14. Total sales volume after 3 months of Water to COVID-19 pandemic PDW RO Plant 15. Total sales volume after 9 months of RO Permeate Water COVID-19 pandemic UV Treatment 16. Sale price Mineral Dosing Micron Filtration Storage Tank Ozonation Filling, Capping & Labelling Shrink Wrapping Palletizing Warehousing 44 CASE STUDIES CASE STUDIES 45
Exhibit III Exhibit IV Fixed Cost Distribution: Before and After COVID Total Cost Distribution and Prot Analysis: Before and After COVID Suggested Ques ons for Discussion 1. Should the company adopt the approach suggested by Mr. Harpal Singh or Dr. Vandana Thakur? 2. Whether the cost cu ng measures will bring increase in profits and ensure financial viability in the market? 3. Is it financially prudent to invest more capital in implemen ng new schemes in already financially difficult scenario? 4. Considering the cost and profit analysis given in Exhibits III and IV, recommend the further course of ac on. 46 CASE STUDIES CASE STUDIES 47
ekud% iFkizn'kZd% Drivers and Deterrents for nd out the root cause for the present status and what could be done to make BIS BIS in Implementing Management System Certication competitive in the current market. Management Systems This case study aggregates the cumulative experience of organizations that benetted from the Management Systems Certications. Different organisations were approached for A collective and explorative case study to understand the challenges before BIS in the eld of questionnaire-based feedback. Inputs from four organizations have been considered in this Management System Certication in view of stiff competition from other Indian and case study- a PSU, a Government Organisation, and two Private Organisations, to understand Multinational certication bodies, and the possibilities for further course of action to empower the opportunities and obstacles during the implementation of Management System Standard MSC activity of BIS. and certication thereafter. Abstract While three organizations under this study were certied by BIS, one Private organization was certied by other certication body. Details of the organizations under study are as given in The Bureau of Indian Standards (BIS), New Delhi is the national standards body of India, Exhibit 3. having been mandated by the BIS Act 2016 to carry out its entrusted responsibilities. Among various activities of BIS, it also carries out certication for Management System Standards. The purpose of this analysis is to identify factors responsible for slow growth of MSC activity in Management Systems Standards are among the most widely used standards globally1). the past. The secondary purpose of this study is to evaluate various ways in which the activity There are more than 80 Management Systems Standards (MSS) 2), each focusing on different can be revived issues affecting global business 2). These standards specify requirements for organisations to function as a system in order to achieve the intended objective. BIS has been offering Case Scenario-1: Management Systems Certications since 1991 with its vast expertise and knowledge base to bring tangible benets to the organisations. Presently, there are around 50,000 operative The case of M/s Satluj Jal Vidyut Nigam (Certied by BIS) licences for Management System Certication in India. Despite its vast experience, legacy and brand value, BIS only operates over 1200 of these licences. It may be imperative on BIS to About: Satluj Jal Vidyut Nigam (SJVN) is an Indian public sector undertaking involved in carry out a review of the prevalent best practices, so as to evolve as a major player in this hydroelectric power generation and transmission. A Mini Ratna, Category-I and Schedule –‘A’ competitive eld. This case study focuses on the major challenges before BIS in emerging as a CPSE under administrative control of the Ministry of Power, Govt. of India, it was incorporated major player in the eld of Management System Certication and increase client base to on May 24, 1988 as a joint venture of the Government of India (GOI) and the Government of increase the market share. Himachal Pradesh (GOHP). SVJN has commissioned seven projects totalling 2016.5 MW of installed capacity and 86 km 400 KV Transmission Line and is presently implementing or Keywords: operating power projects in Himachal Pradesh, Uttarakhand, Bihar, Maharashtra, Uttar Pradesh, Punjab, Gujarat and Arunachal Pradesh in India besides neighbouring countries of Management Systems, Management Systems Certication, Benets of ISO Certications Nepal and Bhutan. Formerly known as Nathpa Jhakri Power Corporation, the company has a total operating hydropower capacity of 1912 MW through its two hydropower plants—Nathpa Dilemma Jhakri and Rampur. Its Nathpa Jhakri Dam is a concrete gravity dam on the Sutlej river in Himachal Pradesh, India and has a capacity of generating 1,530 MW of electricity, making it During the induction training programs for newly recruited scientists of BIS, Smt. Arpita Soni, the fourth biggest hydroelectric plant in India in terms of capacity. In addition, it has an installed DDG (MSC) was giving a presentation on Management System Certication of BIS. A young capacity of 97.6 MW of wind power and 6.9 MW of solar power. SJVN expressed keen interest scientist named Aridaman was listening to this presentation with considerable interest. He in tapping hydro projects totalling about 15,000 MW in the Indian state of Arunachal Pradesh in had seen many companies and institutions with ISO 9001: 2015 certication, which was his the next 10-15 years, conrming that senior ofcials of the company were in direct contact with rst introduction to the standards. However, during the lecture Aridaman was surprised and a state ofcials regarding the projects. The Govt of Himachal Pradesh has already allotted four bit disappointed to know that the BIS operated only 2.4 percent licences out that the total hydro projects to SJVN - namely 780 MW Jangi Thopan, 210MW Luhri Stage-I, 172 MW Luhri number of operative licenses. After the lecture, he raised this query to Smt. Soni that ISO Stage-II and 382 MW Sunni Dam projects, all on the Satluj River Basin. All these projects have certications were one of the most sought-after certications in the country, but why did the been allotted on Build Own Operate and Maintain (BOOM) basis. National Standards Body of India has a minimal presence in this area? The question stimulated the interest of Smt. Soni as well and she decided to carry out a thorough study to The allocation of hydro projects on one single river basin has enabled SJVN to share manpower and infrastructure costs amongst projects, for optimum development of river Shikha Dawar, Amit Garg, Rahul Vishwakarma, Tushit Kamal and Aridaman prepared this case under the guidance of Prof. Prakash Singh and Prof basin. With 5.8% of the global share of energy consumption in 2019, India is currently the third Payal Mehra of IIM Lucknow. This case study has been prepared as part fulfilment of the training on Prepara on of Case Studies organized by NITS of largest energy consumer in the world. However, in 2017 only 63% of its needs were met by BIS. Cases have been developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or domestic sources, making India an energy decient nation4. With the conventional sources of illustra ons of effec ve or ineffec ve management. energy being depleted at ever growing rates, renewable sources of energy with their relatively small share hold much promise. India in 2020 overtook Japan to become the country with the 48 CASE STUDIES fth largest installed hydropower capacity at 50.07 GW. There is further optimism with the CASE STUDIES 49
Govt. of India coming out with a series of measures to support hydropower development as Certication Journey: The company has received the IS/ISO 9001 Quality Management well as its announcement of categorising all hydroelectric plants as renewable sources of Systems Certication across all product lines and plants. Also IS/ISO 14001 -Environmental energy5. Management Systems Certication has been accorded to its plants in Urse and Goa. Certication Journey: World Bank Requirement and Guidelines given by the Department of Finolex Cables has set up four modern state-of-the-art plants located in Pimpri (Pune), Urse Public Enterprises necessitated certication as per ISO 9001 for the organisation. In the year (Pune), Goa & Roorkee (Uttarakhand). The company has received several honours such as 2009, Shri Sharma contemplated obtaining certication and approached several certication Harvard Business School Association of India - Economic Times award for \"corporate bodies before selecting BIS. Since the Bureau of Indian Standards is a government body, with excellence\"; IIM - LIC award for 'marketing' and the Engineering Export Promotion Council's an established a brand image, they decided to get certication from BIS. Their Nathpa Jhakri 'export performance certicate'. The company was awarded the Export House status by the plant and Rampur plant have been certied by BIS for about a decade and now they are having Directorate General of Foreign Trade. licence for IMS System covering QMS, EMS and OHS. The manufacturing plants are well equipped with latest state-of-the-art modern machinery for He recalled that the certication journey was smooth due to the simplied certication producing quality products and testing facilities for assuring the best quality products. procedure, synergistic coordination and effective communication between their organisation However, various problems were being faced prior to implementing Management System and BIS. The implementation of Management System ensured continual improvement in certication by them. The organisation was in search of an effective tool for risk management quality culture, seriousness in processes implementation, along with various intangible and documentation. Lack of inventory and supplier quality management resulted in benets. The management systems policy has been communicated and understood by all inconsistent product quality. In addition other challenges such as incompetent workforce personnel within the organisation empowering them to do their assigned tasks efciently He inadequate safety measures could not bring improvement in the activities. surmises that with implementation of Management Systems Certications, the business prospects have been improved. Since 2009 they have continued certication from BIS due to Mr. S S Buva contemplated management system certication and promptly decided to obtain professionalism, adherence to timelines and economical certication. certication. In his opinion, the. Bureau of Indian Standards has abundant expertise and knowledge incomparable to any other certication body in our country. Moreover, constant Case Scenario-2 guidance provided by BIS immensely helped them to traverse the long road of certication. The case of M/s Finolex Cables Limited (certied by BIS) Ever since the implementation of Management System, continual improvements have been observed in their system. Production and quality of nished products could be streamlined About: In July 1945, two young brothers P.P. Chhabria and K.P. Chhabria came to Pune from and customer satisfaction has been signicantly improved. Signicant improvement has been Karachi in search of livelihood and within six months set up a small shop selling electrical observed in the business also. cables. The retail business became quite successful. A sizeable order in the mid 1950's from the Defence Department for wire harnesses for trucks and tanks bolstered their condence At present, the manufacturing plants are continuously upgraded to latest & modern and they decided to manufacture cables themselves. Finolex Cables Ltd thus came into technology for offering quality products at competitive prices. The work culture impels the existence as India's largest and leading manufacturer of electrical and telecommunication employees to be well versed with the system certication. Implementing management system cables. standards at grass root level has enabled the organisation to build a competent workforce and improve quality and safety altogether. The company started its operation with the manufacture of PVC insulated electrical cables for the automobile industry. Since then, the Company has constantly endeavoured to augment its Case Scenario-3: product range to include PVC Insulated Industrial Cables , FR-LSH PVC Insulated Industrial Cables, PVC Insulated Single Core and Multicore Flexible Industrial Cables, Rodent Repellent The case of M/s Delhi Jal Board Multicore Flexible Industrial Cables, PVC Insulated Winding Wires and 3 Core Flat Cables, XLPE 3 Core Flat Cables, Power and Control Cables, High Voltage Power Cables (Up to 33 kV), About: The Delhi Jal Board (DJB) was constituted through an Act of Delhi Legislative Assembly Polyethylene Insulated Jelly Filled Telephone Cables, Auto & Battery Cables, Co-axial and on 6th April 1998. It has been meeting the needs of potable water in the National Capital CATV cables, LAN Cables, Switchboard Cables, Fibre Optic Cables, Solar Cables and others. Territory of Delhi for more than ve decades. It provides water in bulk to the NDMC and Besides a wide variety of Wires & Cables, the Company is also manufacturing lighting Cantonment areas, and also collects and treats sewage from these areas for treatment and products, electrical accessories, switchgear, fans and water heaters. The company has disposal. manufacturing facilities at Pimpri and Urse in Pune as well as at Goa & Uttarakhand. The company has, over the years, established its reputation as an innovative leader and quality Delhi Jal Board has ensured average availability of 50 gallons per capita per day of ltered manufacturer by continuously upgrading technology, modernising manufacturing facilities water through an efcient network of water treatment plants, booster pumping stations and and maintaining highest standards of quality and services. Today, the name Finolex has about 9000 kms of water mains & distribution system. It currently has 11 raw water sources become synonymous with quality and enjoys overwhelming condence of the customers. and production centres, 20 wastewater treatment plants, and 12 Jal suvidha kendras. Investors have also fancied its stock in view of its phenomenal progress leading to a manifold increase on investment in stock through the years. Certication Journey: The CEO, DJB could discern that getting a management system certication will provide them credibility as a capable organisation having the responsibility of 50 CASE STUDIES supplying treated water to more than 16 million population of Delhi. CASE STUDIES 51
DJB also considered that getting a management system certication will enhance their grant of certication, costs, and professionalism. The organization was also enquired to reputation. DJB opted for Bureau of Indian Standards (BIS) to get the management system indicate the factors that could have brought them towards BIS. The response, though may certication, as BIS is a very well-known organisation having impeccable reputation and brand seem to be obvious in hindsight, are reliability, cost, timely solutions and mutual beneciary name. Further DJB believed that management system certication improves the perception relationship. To enhance the knowledge and awareness of employees, the organization has value of an organisation. organized the Internal Auditor training program. When asked for some suggestions for improvement of Management System Certication procedure, the organization reiterated that As informed by the ofcials of DJB, BIS ofcials were very cooperative and clearly identied the their priority would be timelines for certication process and eventual grant of license, and cost shortcomings in the management system of DJB. These shortcomings, for example, standardization. calibration charts were not proper, SOP posters were not legible, etc. were clearly conveyed to DJB and they were also informed of the ways to rectify these issues. When DJB worked on Discussion these shortcomings, signicant improvements were observed in the system that led to certication of their laboratory. Upon taking charge as the Director General of BIS, Shri Pramod Kumar Tiwari took stock of various activities of BIS. All senior ofcials had gathered in the board room for the meeting, After getting management system certication DJB has been experiencing a number of along with other concerned ofcers. The board room felt too cold, perhaps on account of the benets, such as improvement in credit ratings, enhancement in condence as an Air Conditioner’s settings or the chilly glances of the members attending the meeting organization. DJB is also propounding to get more of their laboratories certied under management system certication. It was Smt Arpita Soni’s turn to share the experiences gained from the interactions with different organizations. She signalled Shri Aridaman, who was now discharging the Case Scenario-4: responsibilities of a Management System Certication Ofce, to present the ndings of his research. . He took the oor to apprise the board what they had learnt from their interaction The fourth scenario is about a leading reputed manufacturer of RO systems. This organization with various organizations. He explained the perception of Management Systems is being studied for an internal analysis to nd gaps and areas for work. Certication globally and across the country. He spoke about numerous drivers and deterrents for implementing management system certication by any organization. The case of M/s Kent RO Systems He then elaborated the benets of ISO certication. ISO certication was used as a marketing About: Kent RO Systems is an Indian healthcare products company headquartered in Noida, tool by the organisations to build customer condence in their brand. The certication Uttar Pradesh. It makes water puriers based on the process of reverse osmosis purication. communicates their commitment to quality as customers perceived certied products to be of a standard quality. The standard requires organisations to determine and comply to the Over the years the company has diversied into other products such as air puriers, vacuum applicable statutory and regulatory requirements. The standards assisted organisations to cleaners, vegetable and fruit puriers as well as water softeners, and has now become the demonstrate compliance to the applicable regulatory requirements. These standards ensured largest manufacturer of water puriers, in India. The company exports to SAARC countries, that the organisations achieve their objectives with minimised business risks. Certication Middle East, Africa, Asia and Europe. It expects a contribution of 15% of total turnover to come against these international standards helped organisations in improving their organisational from exports in the near future. In 2013, KENT was ranked #1 most trusted brand in India in the performance and mitigated operational risks. As these standards focus on the needs and Water Purier category by Brand Trust Advisory. The company won the Golden Peacock Eco expectations of the customers, they aimed to provide enhanced customer Innovation Award for its contribution in developing innovative water purifying technology and satisfaction;enhanced quality translates to reduced customer complaints. preventing environment degradation in 2007. In 2019, Kent RO Systems received the best domestic water purier award at the Water Digest Water Awards. However, as these are generic standards applicable to a wide range of organisations, a lack of proper understanding about the management systems standards, within the organisation, Certication Journey: The organization’s Management System Certication journey began poses difculty in implementation of standards. after a direct outreach by their certifying agency. They feel that their certifying agency is a trustworthy partner for their organization, who worked with them during their initial audit and This highlighted the need for training and disseminating information to the personnel. Even continue to undertake surveillance audits every year to evaluate the compliance of respective though the cost of certication may be low, the fact that an additional cost is to be allocated for standards within the organisation. Kent RO further feels that the agency is one the best certication poses an initial hurdle. Moreover, additional training to the personnel or additional certication body for providing solutions and more reliable over other certication body and human resource may be required by the organisation. Understanding the requirements of the are famous worldwide for their position, business solution and authenticity of audit process. standard can be a challenge for smaller organisations with relatively lesser expertise. Moreover, obtaining certication can be time consuming process sinceafter obtaining The certication has brought apparent improvements to their organization, as indicated by certication, organisations are required to update and maintain the established system. them. Among other benets, they feel that certication eases logistical procedures, facilitates trade, prevents consumer deception and improves quality. This in turn also leads to Increase Cost Comparison with Other Players in condence of our valued customer and consumers to buy their products. Further, it also leads to increase in revenue and improved business prospects after the certication from their BIS is the pioneer of Conformity Assessment in India and understands the challenges agency. Some of the aspects that the organizations has assigned priority to are timelines for CASE STUDIES 53 52 CASE STUDIES
experienced by organisations implementing management system standards. BIS is a Exhibit 2 SWOT Analysis governmental organisation and has a uniform certication cost for all organisations alike. The fee structure has been prescribed in the BIS (Conformity Assessment) Regulations and there Strengths Weaknesses are no hidden charges. BIS has a pool of experienced auditors who enable the organisations to bring about veritable improvements in their systems. Moreover, BIS has a training institute, NSB mandated by an Act of Parliament to Time bound process National Institute of Training for Standardisation (NITS), which provides various training undertake conformity assessment activities Lack of outreach programmes for capacity building to enable organisations to implement the standards Brand value Lack of awareness effectively. Pan-India presence Less competitive pricing Experience with product certication New Approach Quality of service Based on the study, Smt Soni placed before the board some alternative approaches that may be considered by the Management, along with their benets and constraints-: Exhibit 1: Alternative approaches Opportunities Threats Large market size Lack of experience in competitive eld Pool of expertise Varied set of core activities Willingness of management Not driven by protability Existence of numerous certication bodies Alternative Pros Cons offering cost advantage Focus on outreach Building brand image of BIS May be a challenge owing The Way Forward as a MS Certication body to Manpower constraints Prioritize MSC audits May cause delay in routine Shri Tiwari understood that there may not be a panacea in the form of a single approach for BIS Timely dispersal of activities if internal to achieve its Management System certication goals. He pondered over some points, which Devise mechanism to applications; resource is utilized are as follows: identify pool of available Better service to the clients Development of new auditors software which may take 1. Should BIS Management System Certication be made mandatory to ensure uniform Prompt dispatch of team for time for effective levels of quality and trust all over the country? However, this move may call curtains on the Introduce a Flexible audit; implementation other agencies and all associated livelihoods generated by them. Certication Fee system Timely audit; May be complicated Better service to the clients 2. Should management system certication be outsourced completely? This too however, Include Incentives such as May act as economic may only come with a cost, as it may impact the quality of certication as BIS certication Reduced fee for women Increase in client base due burden process is more reliable and trustworthy, following all established procedures. entrepreneurs etc to customized fee structure to suit the client 3. Should BIS increase the outreach or awareness programs which have xed costs to educate the organisations about the effective implementation of management system to Increase in certication increase output, instead of treating it as a mere certicate to show it to customers? cliental SWOT Analysis A SWOT analysis was also conducted to determine the strengths, weaknesses, Opportunities and Threats for Management Systems Certication activity of BIS. The SWOT analysis was also presented to the board 54 CASE STUDIES CASE STUDIES 55
Appendices Sl. Name of the Organisation Geographical Schemes No. Organization Status Location implemented Total Number of Certifications Worldwide 1 M/s Satluj Jal Vidyut Public Sector Northern Region IS/ISO 9001: 2015 Nigam Undertaking IS/ISO 45001: 2015 Western Region 2 M/s Finolex Cables Private IS/ISO 9001: 2015 Limited Central Region IS/ISO 14001: 2015 Government Central Region 3 M/s Delhi Jal Board IS/ISO 9001: 2015 Private 4 M/s Kent RO Systems (Certication ISO 9001:2015 done by other ISO 14001:2015 agency) ISO 14001:2015 ISO 27001: 2013 2018 2019 2020 Exhibit-A3: Details of organizations in this case study Exhibit-A1: Overall Certications worldwide for last three years. Source: The ISO Survey (YEAR) Most popular MSS under Cer fica ons Exhibit-A2: Certications against popular MSS. CASE STUDIES References: 57 Source: The ISO Survey( YEAR) 4 Energy policy of India h ps://en.wikipedia.org/wiki/Energy_policy_of_India 5 The five biggest hydroelectric power plants in India h ps://www.nsenergybusiness.com/features/hydroelectric-power-plants-india/ 56 CASE STUDIES
ekud% iFkizn'kZd% The Case of RAMCO Cements Ltd. – The RAMCO Group of Companies BIS Management System The RAMCO Group of Companies was established in the year 1938 by Sh. P. A. C. R. Raja. With Certication – A photo opportunity or steadfast focus on R&D and innovation, it has achieved global recognition for its quality a chance to reap rewards products and services and has grown to become one of the most reputed business houses of South India. The current market capitalization of this group is US $3 Billion with the group’s The RAMCO Cements Ltd., a well-known brand in South India has ventured into Eastern India interests spanning across Textiles, Cements, Building Materials, Software & IT Solutions and for the rst time by setting up a cement unit at Kolaghat, West Bengal. Eastern India market is Logistics. currently dominated by large cement manufacturers and RAMCO Cements is eager to establish its brand and capture a larger market share in Eastern India as well. The RAMCO Cements Limited Ms. Usha Ramanathan, the Managing Director, of the company contemplates on the various Formerly known as the Madras Cements Ltd., The Ramco Cements Ltd., was established in options presented to her during the Board meeting. Her trusted and most experienced 1957. It’s rst cement manufacturing plant was set up at in Tamil Nadu. The main product of the General Manager suggest that BIS Quality Management and Environmental Management company is Cement, manufactured in eight state-of-the art production facilities with a current System Certication may bring in the desired results. However, the skeptics within the Board of total production capacity of 16.45 MTPA (Metric Ton Per Annum). (Exhibit 4 in appendices lists Directors are heavily terming is as a photo opportunity rather than being of any benet. the location of the company’s plants). This case study takes you through the pros and cons of adopting BIS Management System As per data available in their Annual Report 2019-2020, the total revenue earned by the Certication and may help you in arriving at the nal decision. company for FY 2019 was Rs. 5405.64 crores. During 2020, The RAMCO Cements was the eighth largest cement producer of India (based on turnover value) (Exhibit 1 lists the Top Dilemma Cement Producers in India 2020 w.r.t their market share). On a pleasant winter morning in January 2017, Col. P. K. Sinha Roy, Senior General Manager of 5% 4% 4% 31% UltraTech Cement Kolaghat Grinding Unit of RAMCO Cement Ltd. was in Chennai for attending a meeting of 5% Ambuja Cement senior company ofcials. The meeting aimed to discuss the probable solutions for problems 8% ACC Ltd. being faced by RAMCO Cements, Kolaghat in creating its identity and penetrating the Eastern Shree Cement Ltd. India market. It had been almost one year since February 2016 when the Kolaghat Grinding 10% 21% Dalmia Bharat unit had commenced production. The unit was especially set up to cater to the growing 12% Birla Corpora on Ltd. Eastern Indian sector however the capture of market share did not commensurate with the India Cement Ltd. earlier projections. The Ramco Cement Ltd. Others With his previous experience, he contemplated whether launching an aggressive marketing campaign, increasing the process efciency, reducing the prices could help in achieving the Exhibit 1 Top Cement Producers in India 2020 (market share) nancial targets set by its management. He also remembered how during their visits to his unit, Source: IBEF Report on Cement Industry March 2021 BIS ofcers had informed him that his key competitors were already reaping benets from Management System Certication Schemes and also motivated him to implement Quality The Vision of the RAMCO Cements Ltd. is to be a benchmarked performer in cement business, Management System (QMS) and Environmental Management System Certication (EMS). through consistent performance in all their endeavours and all-round improvement in people, processes, products, machinery, materials, methods and internal & external environment. Col. Sinha Roy was a bit skeptical; he knew that implementation of these Management Systems was expensive, required heavy emphasis on documentation and paperwork, The RAMCO Cements Ltd. — Kolaghat Unit dedicated staff involvement and training, including other implementation challenges like employee resistance and the period to achieve Management System Certication was very The Ramco Cements Ltd. Kolaghat, West Bengal rst commenced production in February lengthy and required months of sustained efforts. 2010 and currently has an annual installed capacity of 1.95 MT. It has been strategically located and largely serves the customers in the East-Indian states of West Bengal, Assam and A.Cha erjee, Chinmay Dwivedi, Kanika Kalia, Nisha Bura, Surabhi Arya prepared this case. This case study has been prepared as part fulfillment of the Orissa. (Exhibit 2 indicates the Process Flow diagram of RAMCO Cement-Kolaghat Unit). training on Prepara on of Case Studies organized by NITS of BIS. Cases have been developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustra ons of effec ve or ineffec ve management. CASE STUDIES 59 ©All Rights Reserved No part of this case study may be reproduced, photocopied, electronically processed and forwarded without the wri en consent of BIS. 58 CASE STUDIES
CONTROL The cement industry is identied as one among the highly polluting 17 category Indian industry which require consent for establishment and operation under the Water (Prevention CLINKER CONTROL and Control of Pollution), and Air (Prevention and Control of Pollution) Act and other related acts. To check raw GRINDING To check Grinding materials as per ISS sample as per ISS Going Forward CEMENT SLAG Top global corporates have started working on strategy of corporate sustainability based on - STORED triple bottom line (3P — Prot, People and Planet). Out of the basic principles of Corporate FLY ASH IN SILO Social Responsibility, corporates have stated working seriously on aspect of Planet i.e., ecological or environmental sustainability. According to Management Guru C.K Prahalad “By GYPSUM CEMENT CONTROL creating sustainability as a goal today, early movers will develop competencies that rivals will be hard pressed to match. Don’t look at sustainability compliance and regulation but as an PACKING To check Packing opportunity for breakthrough innovation.” sample as per ISS (DESPATCH) Because, traditionally, cement companies do not differentiate on quality, they need to ensure that their cost structure is lower than the industry average to be competitive and protable. Exhibit 2 Process Flow diagram of RAMCO Cement-Kolaghat Unit Source: Supplied by RAMCO Cement-Kolaghat Unit The case for Business Sustainability Indian Cement Industry Overview In the sweltering heat of Chennai on 22 April 2017, all the Unit Heads and General Managers of all plants of RAMCO Cements Ltd. were called by Ms. Usha Ramanathan, the Managing Demand for cement is closely related to overall growth in the economy and particularly growth Director, of the company to discuss the business sustainability model for Eastern India. The in the construction industry. The per capita cement consumption of cement in India is at 235 house was aware that this new venture could prove to be gamechanger, as estimates kgs which is currently the lowest among developing countries as the world averages 520 kgs. suggested that cement demand was increasing by 10% in Eastern India as compared to other The process of catching up with international averages emphasizes the tremendous scope for parts where it is 3-5%. However, stiff competition was hampering sustained business growth of growth in the Indian cement industry. their lone cement unit in this area. Growth in Infrastructure and real estate sector, post-COVID-19 pandemic, is likely to augment In the presentations that preceded lunch, it was increasingly becoming clear that there were the demand for cement in 2021 and the initiative to build 100 smart cities and to boost very few opportunities for deriving premium prices in the increasingly competitive market. The affordable housing projects is expected to give further stimulus to this industry. In addition to idea of launching a marketing campaign is cost intensive and is not nancially viable in the these newly launched projects, existing Government schemes such as MGNREGA, PM Garib present context. The plant managers knew that power costs form the most critical cost Kalyan Rozgar Abhiyan and state-level schemes such as MatirSrisht (West Bengal) and public component in cement manufacturing and grid pricing was largely government controlled. The work schemes (Jharkhand) may also aid demand. mood became grim while the presenter concluded his case by saying that the changing cement market dynamics demanded not only improvement in process efciency but also As of 2020, India is the world’s second-largest cement market, both in production and reduction in costs. Stricter enforcement of the recently revised/implemented Central Pollution consumption. India’s overall cement production capacity was nearly 545 million tonnes (MT) Control Board guidelines had also made the regulatory compliance tricky. in Financial Year 2020 which accounted for over 8% of the global installed capacity. In the Indian scenario, 98% of this installed capacity lies with private sector and the rest with public Col. Sinha Roy looked towards his clueless colleagues and rose up to pitch the idea of taking sector. The Top 20 companies in India account for around 70% of the total production. QMS and EMS Certication. He based his initial argument on suggestions received from BIS ofcers. He condently remarked how both QMS and EMS foster organizational and process The Environmental Footprint improvements which may contribute to better quality and environmental sustainability, contributing to better nancial performance and competitive position including improve Cement manufacture contributes greenhouse gases directly through the production of increasing the market share, enhance the organization image, and facilitate the access to carbon dioxide when calcium carbonate is heated (producing lime and carbon dioxide) and governmental incentives. indirectly through the use of energy, particularly if the energy is sourced from fossil fuels. Apart from the above, other environmental impacts during cement manufacture include airborne The presentation of Col. Sinha Roy was met with resentment from Mr. Ramaswami, who was pollution in the form of dust; noise and vibration when operating machinery and during also one of the board members. He immediately raised the issue of additional expenditure to blasting in quarries, loss of green cover etc. be incurred in certication of QMS and EMS in addition to increasing documentation, deployment of dedicated manpower and training of staff responsible for implementation. He Majority of the above environmental impacts maybe attributed to backward production stated that the instances of cement companies who have been beneted in actual sense by technology, low operational effectiveness, lack of environmental awareness, weak management system implementation need to be evaluated. environmental management and reluctance to bear the cost to reduce the environmental impacts. CASE STUDIES 61 60 CASE STUDIES
Meanwhile, Mr. Vinod, another Board member questioned Col. Sinha Roy whether a review sectors. He further informed them that BIS Management System Certication Schemes are has been done that the customers are actually demanding for System Certication while operational since 1991 under an Act of Parliament, through a rich set of well trained and making their purchase decision, after all the product quality is guaranteed by the mandatory experienced auditors and experts providing timely, efcient and economical system BIS Certication Mark (ISI Mark). With no ready data available on the benets of QMS and EMS certication services. Through a deftly designed handout Mr. Yadav explained the detailed certication, Ms. Usha Ramanathan, the Managing Director, expressed her apprehensions procedure of obtaining a management system certication license. about how these system certications would address the impending issues hampering business sustainability. However, instead of categorically dismissing the idea, she advised (Exhibit 3 Process Flowchart for obtaining BIS Management System Certication). They Col. Sinha Roy to conduct further market research including into the procedural aspects of deliberated regarding the various Management System Certication schemes available along obtaining QMS and EMS Certication and present a detailed proposal in the upcoming board with the requirements for successful implementation of these schemes. As the day turned into meeting. late evening, Col. Sinha Roy and Mr. Kabiraj thanked Mr. Yadav for getting most of their doubts resolved and headed back to their hotel room. The structure of their proposal to their Board Management Systems Certication was increasingly becoming clear to them. Management system certication helps organizations improve their performance by Company specifying repeatable steps that organizations consciously implement to achieve their goals and objectives, and to create an organizational culture that reexively engages in a continuous Submission of Selec on and cycle of self-evaluation, correction and improvement of operations and processes through Applica on to BIS Appointment of Stage heightened employee awareness and management leadership and commitment. There are a number of management system standards, published by the International Organization for Submission of 2 Audit team Standardization (ISO) each focusing on different issues affecting global business. The most Informa on/documents popular amongst them are the Quality Management Systems (ISO 9001) and Environmental Prepara on of Audit Management System (ISO 14001) which have been widely implemented by the industry. by Company Plan for Stage 2 in consulta on with the The ISO 9001 standard is based on a number of quality management principles including a strong customer focus, the motivation and implication of top management, the process Applicant approach and continual improvement. Similarly, ISO 14001 sets out the criteria for an environmental management system and can be certied to. It maps out a framework that a Conduct Stage 2 company or organization can follow to set up an effective environmental management system. Audit The Rendezvous with BIS Seeking Informa on Review of Applica on Reject Unseasonal rains greeted Col. Sinha Roy and Mr. Kabiraj, Quality manager in Kolkata, while Acceptance of No Conduct Special they set out to visit the Eastern Regional Ofce of BIS on 5 June 2017. Though Mr. Kabiraj had Applica on and (Major non-conformance) Audit and CA visited the ofce previously given his association with BIS because of the product certication, Sa sfactory Audit verifica on however this was the rst visit of Col. Sinha Roy to the BIS ofce. Processing Yes (minor non-conformance/Observa ons) The apprehension of Col. Sinha Roy, that a visit to a Government ofce is extremely time- Selec on and consuming with long waiting periods in shabby old corridors sometimes even without a proper Appointment of Stage Submission of Audit Report to competent Yes No seating place and lack of positive response from ofcials, quickly disappeared when they were Authority for gran ng of Cer fica on Sa sfactory Audit warmly welcomed and guided to the chamber of Mr. Yadav, MSCO (East), BIS. A courteous 1 Audit team welcome was followed by a hot cup of coffee before the discussions began. Prepara on of Audit The duo of RAMCO Cement ofcials shared their doubts and apprehensions regarding the Plan for Stage 1 in Management System Certication Schemes. However, with the experience of number of consulta on with the Management System audits in varied industries, Mr. Yadav, readily understood the actual purpose and expectations of his visitors. He also realized that a little handholding would result Applicant in two more management system licenses in his region for BIS. Conduct Stage 1 Gran ng of ini al Cer fica on Mr. Yadav told Col. Sinha Roy and Mr. Kabiraj that BIS has been running the world’s largest Audit for three years conformity assessment scheme for around six decades, working with large scale as well as small-scale industry. This in-depth and broad experience in quality control management and No Sa sfactory Audit Yes regulatory compliance has resulted in a staggering array of auditing experience across all Company takes 62 CASE STUDIES Correc ve Ac on against the NCs unsa sfactory Correc ve Ac on review by BIS Sa sfactory Exhibit 3 Process Flowchart for obtaining BIS Management System Certication 63 Source: Developed from information on BIS website CASE STUDIES
Photo Op or Tangible Benets He also categorically stated that there is some evidence to suggest that not all organisations pursuing management system certication maintain their systems once the certicate has Glancing through his proposal notes, Col. Sinha Roy's thought process was interrupted by a been obtained. The Kolaghat plant management however intends to use QMS and EMS as a phone call seeking his attention. The caller informed him regarding the upcoming board tool to achieve the objective of sustainable and business growth and NOT merely a “paper meeting on 5 August 2017 in Chennai which required his presence along with the sought exercise” where certicate is nothing more than a format lling and record maintaining proposal. As he kept the receiver down, the simple thought of facing a new challenge in his exercise. career excited him. While Col. Sinha Roy’s ideas may have seemed novel to many, Mr. Ramaswami and Mr. Vinod The much-awaited day for Board meeting came faster than expected. Adjusting his tie, as he were still not convinced. They reiterated their earlier reservations against implementation of waited in the corridor for his agenda item, Col. Sinha Roy bought his thoughts back to the QMS and EMS in the Kolaghat plant. Mr. Ramaswami showed his concern regarding the proposal notes in his hands, he rmly believed that he had prepared his case well, ably lengthy and time-consuming process of obtaining BIS Management System Certication and supported by his aide, Kabiraj who had gathered the market data. At the appointed time, as he highlighted that the competitors such as Ultratech Cement, the largest cement manufacturer entered the Board room, his eyes caught the sight of Ms. Usha Ramanathan, the Managing of India, Ambuja Cements and Dalmia Cements have obtained the QMS and EMS Certication Director of the company, rummaging through her notes. He knew that the stakes heavily from an agency other than BIS at highly competitive rates. He also pointed out that some other weighed against the nancial sustainability of the Kolaghat plant and hoped that he’ll be able cement manufacturers like JK Laxmi Cement, JSW Cements and Penna Cements have to convince her and the Board for implementation of management system certication. maintained their brand image despite not having system certication. During his presentation, Col. Sinha Roy analysed the various factors affecting the business Citing the example of Birla Corporation and ACC Cement Ltd. which were established brands sustainability of the Kolaghat plant. While performing the issue analysis, he stressed why the having obtained system certication from BIS, Col. Sinha Roy countered that the price lack of process efciency has led to lack of pricing competitiveness with other established differential, if any, with other agencies can easily be ignored considering the benets players. He further stated that “RAMCO Cements” brand hasn’t established recognition and envisaged. He was however not able to convince Mr. Ramaswami as to why an additional credibility in the new market thus customer and dealer retention is a major problem in this area. nancial burden may be set against a unit already struggling to penetrate in an unexplored Building his case further, he highlighted how environmental sustainability of the cement territory. industry is becoming a buzzword globally. Col. Sinha Roy quickly moved to the Key success factors that were identied by his predecessor which however could not bring about the Mr. Vinod seconded the opinion of Mr. Ramaswami and further casting doubts whether the expected turnaround of the Kolaghat Plant. already inadequate workforce is ready for another compliance burden. He expressed deep concerns that a below par performance viz a viz the perceived benets of implementation of While highlighting the change in consumer consciousness in India, Col. Sinha Roy informed Management System Certication may prove detrimental to the already susceptible brand the Board members how their major competitors in this region such as Ultratech Cement, image. He further argued that the unit has to mandatorily comply to the extant environmental Ambuja Cements, Nu Vista Ltd. and Birla Corporation have already or are in the process of regulations and taking EMS certication would not add to any further benets. implementing management systems like QMS and EMS. He further highlighted the projected economic benets of the implementation of management system certication may include but Both Mr. Ramaswami and Mr. Vinod expressed their apprehensions whether getting a are not limited to cost reduction, waste management and/or savings in consumption of energy certication would guarantee the envisaged benets or will it prove to be just another photo and materials. Through this implementation, he stated how strengthening in their export opportunity. competitiveness and market positions especially in nearby countries like Bhutan, Bangladesh, Burma, Nepal etc. can also be achieved. The house was divided and the opinions varied. While the debate heated up, a consensus was suddenly reached and all the Board Members and Col. Sinha Roy expectantly looked at Ms. Col. Sinha Roy rested his case by adding that Eastern India has not been RAMCO’s traditional Usha Ramanathan, the Managing Director, to take the nal call. market of operation, thus implementation of management systems certication is expected to enhance brand visibility, customer recognition and an overall improvement in the company’s Disclaimer: corporate image. Some of the dates, names, places and incidents in the above case study have been changed While concluding his presentation, Col. Sinha Roy also enumerated that 40 NABCB to maintain the ow and essence of the case. accredited agencies were certifying for QMS while 15 for EMS in India. He proposed that certication may be taken from BIS as apart from being NABCB accredited it was the only CASE STUDIES 65 agency operating the schemes under an Act of the Parliament and also represents India in ISO Technical Committees. He also indicated that the Kolaghat Unit management is in regular contact with BIS Kolkata Branch Ofce for ISI Certication Licence. They have had an exceptionally good experience with BIS while applying for ISI mark and is aware of their working procedures. 64 CASE STUDIES
Appendix A ekud% iFkizn'kZd% Adoption of International Standards in Steel Sector Exhibit 4 Location of manufacturing plants of The RAMCO Cement Ltd. – A Panacea or Pandora’s Box Source: Supplied by RAMCO Cement-Kolaghat Unit Today, India is the second largest steel producing country, and it is on course to become the 66 CASE STUDIES second largest consumer of steel globally. However, India is only at ninth position in the world when it comes to steel exports. Shri XYZ, Joint Secretary at Ministry of Commerce, set out to explore reasons for this variance and to harness the export opportunities available to India’s Steel Manufacturers. The stakeholder consultation revealed that upgradation of Indian Standards in steel sector by Bureau of Indian Standards, the National Standards Body of India, may hold the key to increasing the quality of Indian Steel to meet the criteria set by importing countries. During the process of primary and secondary survey, several options for upgradation of Indian Steel Standards like adoption of International Standards and amendment of indigenous Indian Standards for inclusion of popular international grades were presented to Shri XYZ. However, these options had their pros and cons and a ne balance between protecting MSME sector with technological bottlenecks and fueling India’s steel export interests had to be arrived at. Dilemma Shri XYZ, Joint Secretary in the Ministry of Commerce, GoI has been deputed to attend an International Conference on ‘Current Avenues for Steel Industry in Developing Countries’ so that he can have an insight of opportunities available to the steel industry and current challenges being faced by them. Shri XYZ attends the Conference. In the conference, representatives of foreign steel manufacturers informed about their latest standards for steel and steel products, which are at par with International Standards. They further informed about the important role being played by their standards in giving boost to their exports. Shri XYZ starts wondering if lack of adoption of International Standards as Indian Standards by Bureau of Indian Standards (BIS), the National Standards Body of India, was an issue hindering the growth of exports from the Indian steel manufacturers. After his return from the Conference, Shri XYZ called a meeting of ofcials from the Ministry and BIS for deliberating on the issue of standardization in steel sector in India and its impact on Indian Exports. The discussions revealed that only about 4% of standards in the sector are adoptions of international standards formulated by ISO (International Organization for Standardization) and rest have been indigenously developed by BIS. Shri XYZ was concerned whether Indian Standards were at par with the International Standards. He also wondered whether the adoption of International Standards would fast track the process of upgradation of Indian Standards. The Joint Secretary desires to know whether there are other factors which can form backbone of Indian steel industries exports. [Exhibit 1]. Rajneesh Khosla, Surya Kalyani S, Madhurima Madhav, Adbhut Singh and Sudhanshu Rai prepared this case. This case study has been prepared as part fulfillment of the training on Prepara on of Case Studies organized by NITS of BIS. Cases have been developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustra ons of effec ve or ineffec ve management. ©All Rights Reserved No part of this case study may be reproduced, photocopied, electronically processed and forwarded without the wri en consent of BIS. CASE STUDIES 67
National Standardization in Steel Sector Comparison: Indian and other global standards Mr. XYZ invited a team of ofcials from BIS to have an understanding of the current situation of After getting background from BIS team, Mr. XYZ desired to know about the implementation of standards in steel sector of India. BIS is engaged in formulation and implementation of standards in steel sector. Subsequently as per his advice primary surveys of large-scale National Standards knows as Indian Standards. He was informed that indigenous manufacturer, exporters, importers of steel in India were carried out. Standardization in the steel sector started in 1950s. He was also apprised that about 214 Indian Standards on steel and related products exist as on date. These standards are These surveys revealed that well laid Indian standards are available for steel sector. The Indian periodically updated and majority of these standards deal with Carbon Steel and cover various steel industry is aware about availability of ISO Standards, as also the specications laid down grades of steel for structural purposes, automobile and general engineering purposes. These in them. However, they are required to meet the specications laid down in European (EN), standards cater to the needs of large scale as well as MSME manufacturing units. He then American (ASTM) or Japanese (JIS) Standards for exporting their products to these countries. asked the BIS ofcials about the status of standardization at international level. In automotive sector, there is no national/international standard to be followed, it is OEM’s International Standardization in Steel sector specication which is to be complied with. Further, for some sectors, like, defense grade steel, API line pipe steel and some varieties of structural steel, standards of other countries, like The BIS team informed him that the International Organization for Standardization, known as America and Russia are followed even for the domestic market. ISO was created in 1947 to promote the development of international standards in all areas, with the exception of those belonging to the electrical, electronic & telecommunication In the steel sector standards of developed countries (ASME, ASTM, JIS etc.) are either more or branch. ISO is formed by a network of National Standards Bodies in 165 countries, with central less stringent than the corresponding ISO standard, as per country specic requirements. In headquarters in Geneva (Switzerland). some cases, these are more stringent and demand for strict quality control checks. Indian Standards can also be made more stringent but sometimes these are relaxed to meet the ISO develops international standards of voluntary compliance to coordinate the national limited capabilities of Secondary Producers of Steel (those who have adopted Electric Arc/ standards of each country to facilitate trade, exchange of information and contribute with Induction Furnace route). common standards for the development and transfer of technology. ISO standards of steel aim at providing uniform guarantee the quality of steels, regardless the country of origin or the With continuous updating of Indian standards, many of these are already in line with country of destination corresponding international standards. Indian Standards have been formulated by modifying the base standards to suit to our specic requirements. Some Indian Standards which are old, ISO standards are globally relevant as they are developed in a multi-stakeholder environment although relevant in present context, needs to be amended for updating the various cross- which ensures that a wide range of technical views are represented, including those relating to referred standards in them. social and economic interests and are compliant with the six core WTO/TBT principles for developing International Standards. They can be adopted as national standards (with or Indian industry takes pride in formulating their own indigenous Indian Standards. These without modication) after a national public enquiry process has been carried out. Since they surveys also revealed that the industry nds certain clauses in the International Standards to are International Standards, other nations cannot raise valid Technical Barrier to Trade (TBT) be not user friendly, to be directly understood and adopted by the local manufacturers. Indian concerns regarding their referencing in Technical Regulations. Standards, on the other hand have been found to include simplied and easy to implement technical parameters. Regulatory Regime in Steel Sector Indian Standards which have been notied as Technical Regulations, safeguard interest of On asking about the present status of Indian Technical Regulations, Mr. XYZ was informed by Indian industry, as also its consumers as they through the various requirements specied in the BIS team that adoption of Indian Standards or marking products to bear ISI Mark by its very them also take into consideration, the available raw materials; the local practices of nature is optional unless it is made compulsory under specic Law, Rules & Regulations. manufacturing and use of steel products; level of mechanization in manufacturing and use; Section 16 of BIS Act, 2016 authorizes Union Government to make the use of ISI marks knowledge and skill level of workforce in the country; availability of testing facilities; local compulsory in the public interest. Till date, Government has notied 145 carbon steel, alloy economic consideration, for example, zinc coating thickness, etc. Also, unique use specic steel and stainless-steel products, under Quality Control Order (QCO), which should requirements, for example, proper performance in various seismic zones have been compulsorily bear ISI mark, to make available quality steel for the sectors mainly in accounted for in these standards. construction, infrastructure, automobile and engineering applications. All domestic manufacturers and foreign manufacturers importing to India are required to compulsorily International Standardization- Boon or Bane conform to Indian Standards for these products. Please see Exhibit no. 2. Sh. XYZ realized that in general, outline of international standards is more detailed and Mr XYZ was given to understand that QCO has helped in curbing import of sub-standard steel structured. They are more aligned to latest technological changes/improvements. In some into the country. The import of basic varieties of steel for which India has abundant installed cases, where there are no Indian standards for few products category, adoption of capacity domestically has also reduced in past three years. Please see Exhibit no. 3. international standards may lead to resource and time saving, as making a new standard for upcoming/new technology is highly time consuming and bureaucratic process. In general, 68 CASE STUDIES international standards are more acceptable across national boundaries. Their adoption can CASE STUDIES 69
help in unication and ease of production. The initial expenditure and related work of importers Steel and API grade steels, it will lead to increasing domestic capability in these niche will be reduced if national standards are aligned with most prevalent international standard of products, which in turn can create export opportunities. that product. More mills around the world would be able to supply to Indian market. In many cases, the quality of output may be better in application specic international standards, and He informed that smaller steel manufacturers of India faced the limitation of technology in steel compliance to those standards can lead to a positive impact on the downstream use making. Majority of smaller players deployed EIF (Electric Induction Furnace) or EAF (Electric industries. Further, in most of the product categories, the cost of compliance to International Arc Furnace) techniques for processing of steel and often used ferruginous scrap as input Standards is not that signicant as compared to that with Indian Standards. material. These processes inherently lacked the ability of rening steel. Thus, ultimately the small-scale manufactures were unable to achieve some of the stringent requirements in Sh. XYZ also realized that large scale domestic manufacturers will not face much difculty, in International Standards. case International Standards are adopted. They were already supplying order-based consignments to foreign Mr. Singh further added that the primary factors working against India in gaining share in global steel exports are, “Cartel formation by International trade houses against buying form buyers so they possess the capability to produce as per international standards/standards of Indian steel mills”. Mr. Singh emphasized that while the domestic trade houses were not other countries. dominant in India, at the international level, major trade houses had the ability to mould the direction of trade in steel. Given the background, Shri XYZ wondered whether BIS (India) should go for adoption of International Standardization in Steel Sector. Sh. XYZ then came across those points of the However, he also pointed towards few lacunae in the Technical Regulation (QCO) which are survey which revealed that ISO Standards were not without their disadvantages. In case of acting as a hinderance in realizing the full potential of the QCO. The rst issue pertained to Automotive sector, most of the OEMs require steel as per their own standards/specication fewer steel grades prescribed under the scope of Indian Standards on steel viz-a-viz the which do not match with international standards. As such adoption of international standards number of grades available in international or industry standards. He added that this has led to in the eld of automotive sector will serve no purpose. a situation where despite the product being under compulsory licensing regime of BIS, the manufacturers/importers seek exemption for specic grades of that product as the Chemical Further, in case of long steel products, certain clauses in the International Standards are not Compositions for those grades were not included in the corresponding Indian Standards. For user friendly to be directly understood and adopted by local manufacturers. In addition, instance, if an IS prescribes limits for Carbon (C) in a grade to be between 2% to 5%, a technology barrier can be a hurdle for small scale local manufacturers in meeting the manufacturer making the same product with a C composition of 5.5% or 1.5% cannot obtain requirements of the international standards. BIS license and will seek exemption from the regulator from the purview of QCO for their product. The exemption was granted as long as the grade under question was covered by any Many countries have their own Standards/ requirements, and steel manufacturers/ exporters international/foreign or reputed third party standard. Then the exempted grades are to that country have to take the license from that standardization body and have regular audits communicated to BIS for incorporation in to the corresponding Indian Standard. Metallurgical for compliance. These are SIRIM for Malaysia, SNI for Indonesia, SONCAP for Nigeria, TISI for Engineering Department (MTD) of BIS, dealing with steel standards takes up validation Thailand, CE Marking for Europe, etc. Also, many African and some other countries have studies for the requested grade before amending the existing standards with new grades. mandatory third-party inspection requirement for exports into their country. Steel ministry ofcials said that this process was taking considerable time and MTD should immediately include grades which are already part of any established standards and for Shri XYZ realized that benets of international standardization could be accrued by the grades which are already in use by industry in India. The data from user industry can be domestic manufacturers only if other countries also adopt the same International Standards. considered for expediting validation. He further informed that till date, over 800 grades have Sometimes, international standards demand more stringent requirements which enhances been provided by their Ministry to BIS for inclusion in different Indian Standards. cost of production. It may lead to a situation of more imports than exports. Thus, effectiveness of bringing the recent QCO may be reduced. Moreover, most of the demand is from domestic Secondly in some cases where QCO mandated compliance of a raw material to a particular market leaving lesser room for export by the Indian industry. standard, the Indian importers tend to shift their imports and start importing nished products instead of raw material as Indian Standards are not available for the nished product and the Perceptions of Regulatory Authority regarding Standards in Steel Sector imports remain out of the ambit of QCO. He added that in such cases, the Ministry had suggested BIS to quickly develop Indian Standards for all stages of steel product, that is, raw On being asked what role can Indian Standards and BIS play in helping Indian steel exports, material, intermediate product and nished product. Additional Industrial Advisor in Ministry of Steel, GoI Sh. Paramjeet Singh revealed to Mr. XYZ that BIS can come out with comparative analysis of IS with popular international standards Lastly, the Ministry ofcials pointed towards weak enforcement of QCO on part of BIS which thus Indian manufacturers will be aware of grades having potential in international markets leads to some unscrupulous domestic/foreign manufacturers violating the QCO norms with which can be made in India and exported globally. impunity. They added that this violation can distort the trade practices in steel sector. Ministry suggested more focus on enforcement on smaller manufacturers without punitive intent. They He cited the examples of Electrical Steels (IS 648, IS 3024 & IS 1539) where almost all of the guided that they can be trained periodically by BIS or its laboratories for better compliance domestic demand was met through imports about ve years ago, but after inclusion of these with QCO. products in QCO, domestic capacity had come up and imports had subsided. He was hopeful that if more Indian Standards were developed and made compulsory in the elds of Specialty CASE STUDIES 71 70 CASE STUDIES
Conclusion standards and OEM specied grades which are internationally popular, itself required access to such documents, analysis, ascertaining need for R&D to nd out suitability of such grades in Mr. XYZ of Ministry of Commerce was made to understand all the facts. Considering these Indian context, and incorporate these grades suitably in Indian Standards after wide facts, he analyzed that he had specic tasks/options which he could exercise in order to stakeholder consultation. achieve the goal of increased steel exports of India. The following were the 4 options which he could propose to the Government of India to be implemented for achieving the goal of India Also, it would be easier for the industry to understand the provisions of Indian Standards and becoming the major player in world steel export. implement them than. The pride taken by the Indian stakeholders in developing their own indigenous standards would also be restored. However, the bureaucratic process in BIS which Harnessing Alloy Steel and Specialty Steel Production for Increased Exports delays the entire exercise concerned him. He wanted quick standards formulation in the new area of alloy steel and specialty steel, frequent review and updation/inclusion of grades in Mr. XYZ of Ministry of Commerce was made to understand from all the discussions that the existing standards based on comparative study of global standards. He was not sure whether Indian industry was presently focused towards production of plain carbon steel so as to meet MTD, BIS would be able to follow a time bound approach for including grades already the large captive domestic consumption of the product. The international market is highly recommended by Ministry of Steel. price sensitives and dependent on economies of scale and cartels in which countries like China are dominating. He could feel that there was a need for making process of new/improved standardization more agile. Further, alloy steel and specialty steel are the areas which are technology and capital intensive. The margins are high, even though the market is comparatively smaller than plain Facilitating Participation of Indian Stakeholders in International Standardization carbon steel. In order to increase Indian export in the sector, the Indian industry need to gear up their production of alloy steels and specialty steel. In such a case, Indian Standards for Mr. XYZ also felt that for seamless adoption of International Standards as Indian Standards, it those products would also need urgent development and upgradation to bring them at par was essential to ensure that the concerns of the Indian steel industry are addressed in those with international standards. International Standards. This would require capacity building of industry for effective participation in such fora through training in the international standardization process and Formulation of new standards may also be required in the areas of latest alloy steels, Wear nancial support for sustained participation in international technical committee meetings Resistant Steels & API Grade Steels. Mr. XYZ was confused that whether adoption of which formulate International Standards. He contemplated what role BIS, Ministry of Steel and International (ISO) Standards will fast track the entire process or BIS should make a Ministry of Commerce can play in this regard. comparative study of other global standards and quickly develop indigenous standards at par with other global standards. Then, there was the question of pride taken by Indian Streamlining Implementation of Standards through QCOs stakeholders in preparing indigenous standards. However, he was also not sure whether BIS possessed adequate infrastructure for progressing work in this area. Accelerated Standards Mr. XYZ was wondering whether improved focus on enforcement by BIS on products under Formulation steel QCO, specially on smaller manufacturers without punitive intent will also help in increasing Indian exports. Small-scale manufacturers had a large contribution towards total Mr. XYZ was wondering whether adoption of ISO Standards for steel would serve any purpose steel production. He was still not sure whether quick standards formulation and their as they were not very popular. The standards of some of the developed countries were popular implementation through QCOs would be sufcient in increasing Indian export or some and implemented. Indian industry needed to comply to the respective standards of the handholding by the Government would also be required. importing country to sell their product. There were certain industries in which OEM’s had laid down their requirements for steel. In some cases, standards of a particular country were CASE STUDIES 73 prevalent for example, Russian Standards for defense grade steel, API standards for steel pipeline. However, the fact remained that adoption of ISO standards had an advantage of fast tracking the entire process thereby ensuring time and resource saving. But the challenge remained to provide adequate infrastructure for increased participation in international technical committee meetings by BIS for ensuring that concerns of Indian industries are addressed in those standards. Through Indian Standards, there was a possibility to cater to the various needs of Indian industry and users. With the help of such standards, it would be possible to ensure production of quality steel and help ensuring safe and durable infrastructure in the country. He was however suspicious whether BIS was geared up to come out with the comparative analysis of Indian Standards with popular international standards, so that Indian manufacturers are made aware of potential grades which can be made in India and exported globally. He knew that the process of comparative analysis of Indian standards with all International, other countries 72 CASE STUDIES
Exhibit 1 As per Indian Steel Association (ISA), steel demand will grow by 7.2% in 2019-20 and 2020-21. Government Initiatives Huge scope for growth is offered by India’s comparatively low per capita steel consumption and the expected rise in consumption due to increased infrastructure construction and the Some recent Government initiatives in this sector are as follows: thriving automobile and railways sectors. Under the Union Budget 2020-21, the government allocated Rs. 39.25 crore (US$ 5.4 million) Exhibit 2 to the Ministry of Steel. Data on Indian Standards Brought Under Compulsary BIS Certication In Last 14 Years In January 2021, the Ministry of Steel, Government of India, signed a Memorandum of Cooperation (MoC) with the Ministry of Economy, Trade and Industry, Government of Japan, Source: h ps://steel.gov.in/quality-control-orders-archive to boost the steel sector through joint activities under the framework of India–Japan Steel Dialogue. CASE STUDIES 75 In December 2020, the Minister for Petroleum & Natural Gas and Steel, Mr. Dharmendra Pradhan, has appealed to the scientic community to Innovate for India (I4I) and create competitive advantages to make India ‘Aatmanirbhar’. In September 2020, the Ministry of Steel prepared a draft framework policy for development of steel clusters in the country. On October 1, 2020, Directorate General of Foreign Trade (DGFT) announced that steel manufacturers in the country can avail duty drawback benets on steel supplied through their service centres, distributors, dealers and stock yards. Government introduced Steel Scrap Recycling Policy to reduce import. An export duty of 30% has been levied on iron ore^ (lumps and nes) to ensure supply to domestic steel industry. Government of India’s focus on infrastructure and restarting road projects is aiding the demand for steel. Also, further likely acceleration in rural economy and infrastructure is expected to lead to growth in demand for steel. The Union Cabinet, Government of India approved the National Steel Policy (NSP) 2017, as it intend to create a globally competitive steel industry in India. NSP 2017 envisage 300 million tonnes (MT) steel-making capacity and 160 kgs per capita steel consumption by 2030-31. The Ministry of Steel is facilitating setting up of an industry driven Steel Research and Technology Mission of India (SRTMI) in association with the public and private sector steel companies to spearhead research and development activities in the iron and steel industry at an initial corpus of Rs. 200 crore (US$ 30 million). The Government of India raised import duty on most steel items twice, each time by 2.5% and imposed measures including anti-dumping and safeguard duties on iron and steel items. Road ahead The National Steel Policy, 2017 envisage 300 million tonnes of production capacity by 2030- 31. The per capita consumption of steel has increased from 57.6 kgs to 74.1 kgs during the last ve years. The government has a xed objective of increasing rural consumption of steel from the current 19.6 kg/per capita to 38 kg/per capita by 2030-31. 74 CASE STUDIES
Exhibit 3 Import and Export Data of Iron & Steel: Export ekud% iFkizn'kZd% BIS Hallmark – Green Tests for Yellow Metal Total Steel Total Steel Value Year (Semi + Finished in ‘000 tonnes) (Rs. crores) Bureau of Indian Standards, the National standards body of India, was established under the 15206 BIS Act, 1986, to construct an internationally accepted mechanism to protect consumers and 2009-10 3876 18433 foster competition. 2010-11 3987 21946 2011-12 4789 26912 BIS launched the voluntary hallmarking scheme in the year 2000, striving to ensure the 2012-13 5512 31315 empowerment of all citizens with good quality precious metals and to ll the regulatory 2013-14 6471 31283 vacuum in the Indian gold market. In order to ensure purity in Gold Jewellery, hallmarking was 2014-15 6235 24083 made mandatory from June 23, 2021. Assaying and hallmarking centres (AHCs), one of the 2015-16 4718 38182 abutments to the hallmarking scheme, are responsible for the accurate analysis of the 2016-17 9434 52812 composition of materials at all times. 2017-18 11614 40900 2018-19 8544 45102 There are various issues faced in the implementation of mandatory hallmarking and it is thus 2019-20 11183 important to understand how hallmarking is implemented in other parts of world. The re assay method being the stalwart among analytical techniques, is used worldwide, including in Import and Export Data of Iron & Steel: Import India. The process makes it possible to obtain minute quantities of concentrated precious metals, but the process also gives off toxic lead fumes, which pollute the environment. Year Pig Iron Total nished steel (non- Total Value (Pig Iron + Recently, CPCB issued guidelines covering modalities for environmental clearance to mitigate Steel) (Rs. crores) the negative impacts of the test method which caused a stir and left the AHCs uncertain. The (in ‘000 tonnes) Alloy + Allow/Stainless) 25983 notication in its wake has given the country an impetus to align its plans with the sustainable 26996 growth avenues currently at its disposal and seek clean and green alternative approaches for 2009-10 11 7382 27017 gold testing without compromising accuracy. How AHCs will adapt to these recent regulations 2010-11 9 6664 39347 is a question to answer. 2011-12 8 6863 30525 2012-13 21 7925 44994 BACKGROUND 2013-14 34 5450 45066 2014-15 23 9320 34277 Go Green: CPCB Advisory 2015-16 22 11711 39544 2016-17 34 7224 49368 The Hon’ble NGT, vide order passed on 18.11.2019 issued the advisory that henceforth all the 2017-18 16 7483 44722 gold assaying and hallmarking centers in the country shall obtain the consent to 2018-19 67 7835 establish/consent to operate under Water (Prevention and control of pollution) Act 1972 and 2019-20 11 6768 Air (Prevention and control of pollution) Act 1981 of the state pollution control boards. These units shall also obtain authorization under hazardous and other waster (Management and transboundary movement) Rules 2016. NGT also advised BIS to explore other green method for Gold and Silver testing. CPCB in their guidelines also mentioned the harmful effects of the traditional Fire assay method such as generation of lead oxide and nitrous fumes during parting. Source: JPC; h ps://steel.gov.in/development-indian-steel-sector-1991 Sanjiv Maini, Manvendra Singh, Ashish Tiwari, Siva Prasad Gude, Anurita Nidhi Hemrom prepared this case. This case study has been prepared as part fulfillment of the training on Prepara on of Case Studies organized by NITS of BIS. Cases have been developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustra ons of effec ve or ineffec ve management. ©All Rights Reserved No part of this case study may be reproduced, photocopied, electronically processed and forwarded without the wri en consent of BIS. 76 CASE STUDIES CASE STUDIES 77
Subsequently, CPCB formulated guidelines for BIS to make mandatory to have a copy of taken 40 Lakhs loan from a bank. The centre was provided by licence by BIS in 2018 has been consents issued by SPCBs/PCCs under Water Act 1974 & Air Act 1981 and Authorization operating satisfactorily for 2 years. certicates while issuing the BIS certicates. Gold assaying and hallmarking centres have thus been put in orange category and in many states the centres are nding it difcult to get consent Mandovi Jewellers: from state pollution control boards as the assaying centres are mostly present in the crowded jewellery market. Mandovi Jeweller is India's leading ne jewellery discovery platform focusing on giving quality jewellery with 100% assurance. It was a family owned business led by Mr Khanna and his sons. The Dilemma: Shining bright with a young team focused on innovation, customer happiness and transparency, Mandovi Jewellers addresses the growing demands of today's always on-the- Due to this order, many of the assaying and hallmarking centres have been put under go consumers to discover, explore, buy and know more about their jewellery. Their policies suspension by BIS which is not only be a monetary loss to the promoters of centres but also it provide easy returns, free shipping, BIS Hallmark, 100% certied jewellery, life-time exchange, is deterrent in the implementation of mandatory hallmarking as the number of assaying and best and transparent prices and unique designs. They have multiple centres across hallmarking centres will decrease and the available centres may not be adequate to test the Hyderabad. The jeweller rst got BIS registration to sell BIS Hallmarked jewellery in 2008 jewellery. which got renewed again in 2018. Mr Venkat Rao, Venkatesh Hallmarking Centre is facing a crisis situation as SPCB refused to Current Hallmarking Process and Associated Test Methods give them permission to operate in city limits. Since their work was listed under orange zone, it has to be set up outside the limits of Hyderabad municipality or shut down the centre. The The two main pillars of BIS hallmarking scheme are jewellers and assaying and hallmarking recognition of the centre was also put under deferment by BIS. Mr Khanna, Mandovi Jewellers centres. The jeweller registers with BIS for selling hallmarked jewellery and sends the jewellery is also under discussion with other jewellers in the market who would be impacted with this for hallmarking to BIS recognized assaying and hallmarking centres. Assaying and order. Now, the Jewellers would have to take their Jewellery almost on a daily basis to the hallmarking centres are the centres where the jewellery is tested. The assaying and Assaying Centres which are located far away from their business market. This would add to the hallmarking centres tests the jewellery and if the jewellery is found complying to the risk and the transport cost. Further, they would require additional insurance to cover the risk requirement of BIS standard, the jewellery is hallmarked This hallmarked jewellery is then involved in such transportation. Also, there would be an additional time lag in delivering the returned back to jeweller. The hallmarked jewellery is marked with three marks. jewellery to the customers which would lead to their dissatisfaction. This would lead to additional costs which would affect their business. Exhibit 1 of BIS hallmarking scheme and three marks Introduction BIS CERTIFIED Jewellery BIS recognised BIS JEWELLER AHCs HALLMARKING BIS Hallmarking scheme SCHEME Hallmarking scheme for gold jewellery/artefacts was started by Bureau of Indian Standards AND (BIS) in the year 2000 to protect the consumer against cheating, develop export competitiveness and make India a leading market for gold jewellery in the world. THREE MARKS Hallmarking is the accurate determination and ofcial recording of the proportionate content Jewellery of precious metal in the jewellery/artefacts or bullion/coins. Tes ng Venkatesh Assaying and Hallmarking centre Hallmarking of Jewellery with Three Venkatesh Assaying and Hallmarking centre (popularly known as VAHC) was established in 2018 with an aim to serve Jewellery Industry so as to maintain and upgrade its quality. VAHC Marks established a Management System for Quality, administrative and technical operations conforming to IS 15820: 2009. Jewellery Not Found Found Rejected Complying Complying The centers are equipped with latest test equipment’s, well trained & professional staff from this industry and the mindset to do quality work. ekud% iFkizn'kZd% 22K916 AAAAAA Mr. Venkat Rao is a rst-generation entrepreneur who has done his graduation in Chemical The BIS Logo Purity of Gold Unique Six Digit engineering and was working in a chemical factory at Ankleshwar. On advice of one of his Alphanumeric Code jeweller friend, he has left his job and invested all his life time saving in setting up of Venkatesh Assaying and Hallmarking centre in Hyderabad city near to jewellers market. He has even CASE STUDIES 79 78 CASE STUDIES
Quality control order for mandatory hallmarking of gold jewellery/artefacts has been issued on In addition to other tests, the standard species a Fire Assay test for Assay and Hallmarking of 23 June 2021 for 256 districts where there is atleast one assaying and hallmarking centres. At gold, following the procedure prescribed in the method IS 1418: 2009 (Assaying of Gold in present there are about 70000 jewellers registered with BIS for selling hallmarked jewellery Gold Bullion, Gold alloys and Gold Jewellery/Artefacts: Cupellation- Fire Assay Method.). The and there are about 950 assaying and hallmarking centres recognized by BIS for testing the process ow chart of re assay method is given in exhibit 3 given below. jewellery before putting hallmark on the jewellery. Jewellers represented for various implementation issues of mandatory hallmarking. Indian standard IS 15820:2009 is the basis for recognition of assaying and hallmarking centres. The various steps followed in an assaying and hallmarking centre are given below as Exhibit 2. 80 CASE STUDIES CASE STUDIES 81
As can be seen from the exhibit lead is used in the process and lead fumes are generated in The details of Hallmarking Process in various countries are given in Appendix 1. cupellation. These fumes are then passed in the scrubber where they are dissolved in water. Also, nitric acid is used in parting which needs to be disposed of. Hallmarking of precious metals is done in various parts of world however the hallmarking scheme followed in India is different from other parts of the world mainly due to the difference Issue/Challenges in the method of manufacture of jewellery. In European and US Market, most of their Jewellery are casted Jewellery and thus the purity is consistent in the entire jewellery. Thus, non- The recent NGT Order has identied AHC Centre as polluting Industry. Currently, AHC centres polluting test methods like XRF are enough to ascertain purity. The polluting methods like Fire and the Jeweller market are located nearby which ensures easy transfer of jewellery samples Assay and rarely required for certain types of jewellers. Moreover, in many countries, the amongst the jewellers and the AHCs. However, due to the recent NGT order, the AHCs are Assaying Centres are very few in number and hence are easy to regulate. marked as polluting Industry and thus needs to shift their premises from the main jeweller market to the outskirts of the city or strict compliance with NGT Order. In India most of the jewellery is hand crafted and most of the times different parts of jewellery are made by different artisans and then soldered together. Thus, there are chances of As stated earlier, re Assay (Cupellation) is the standard reference technique against which all difference in gold purity in different parts of jewellery. The Gold percentage of a single piece of other techniques may be compared. Despite its age, it remains the most accurate method but jewellery can differ in various segments. In such conditions, the non-polluting XRF method the recent NGT order to mitigate the polluting nature of the re assay method has created a lot may not be enough to ascertain purity as it would provide the purity at a single location. The of uncertainties among the AHCs. The guidelines have impelled them to seek and settle for Fire assay test becomes an essential requirement to ascertain purity. Moreover, India has alternative methods with appropriate accuracy but the techniques available with accuracies more than 950 Assaying and Hallmarking Centres which is tough to regulate in comparison to bordering the re assay process are costly and not easily available. Another process other European Countries. approach to tackle this situation for the AHCs is the scheme of BIS for setting up an offsite center wherein the main center can be in Industrial area complying with NGT/CPCB norms. This too has roadblocks, one of them being the additional investment required of around 30- 40 Lakhs. The customers will also be dissatised as the whole transfer process policy would add to the delay. The BIS roadmap of making Hallmarking mandatory across the country will also hit a roadblock as the Assaying Centres would not be able to operate in an effective manner due to the NGT Order. International Practices Gold is a global commodity and various countries across the world are having their hallmarking schemes in one way or other. The Vienna Convention provides Common Control Mark (CCM), attesting to the material's neness which is recognized in more than 21 countries. Some of the major consumers of gold like UK, France, Spain, USA have their hallmarking scheme based on XRF and/or Fire Assay Method. In the United Kingdom (UK), the hallmark is placed after testing by X-ray uorescence spectroscopy which is a Non-Destructive method and re assay method is used in case of doubt in purity. Similarly, all gold jewellery sold in France is tested for metal purity and marked with an eagle’s head, which has been the ofcial hallmark since 1838. Spain follows a dual system of Assay Ofce hallmarking and licensed manufacturers marking and Hallmarking is a compulsory state requirement. The comparative chart of hallmarking schemes in various countries of world is placed as Exhibit 5 given below 82 CASE STUDIES CASE STUDIES 83
Approaching BIS: and that obtained from re assay for the same sample from the referral labs of BIS. He shared the data with them as given in Appendix 3. He also stated that better comparison can be The recent Hon’ble NGT order 18.11.2019 has created a lot of implementation challenges for obtained if the sample is melted and rolled into a at strip and then tested by XRF. He BIS and Gold Hallmarking Centres and Jeweller. suggested somebody should undertake this study to nd out if some strong correlation can be drawn between the XRF values and reassasy and it could pitch for a strong case of XRF On learning the above implementation issues, Mr Venkat, Proprietor of M/s Venkatesh replacing reassay. Assaying and Hallmarking Centre, Hyderabad had a meeting with local jewellers and learnt that this order would get complications of getting it hallmarked if the hallmark centres are Mr. S V Rao further commented on the issues of challenges to be faced by jewellers, a required to be shifted from city business area to outskirts. Mr Khanna, MD of M/s. Mandovi proposal on the scheme of setting up an offsite centre within Industrial area is in progress. In Jewellers and Mr. Venkat discussed the challenges to be faced by Jewellers and issues related the offsite centre the work up to sampling of jewellery will be done and then the sample shall be to increased risk involved in transportation and will lead to raise in costs of hallmark the article sent for re assay testing to the main centre. The test results can then be transmitted if the Assaying Centres are shifted to the remote Industrial areas. electronically to the offsite centre, and the jewellery hallmarked in the offsite centre and returned back to jeweller. Setting up of an offsite centre would however require additional Mr Khanna, MD of M/s. Mandovi Jeweller, representative of the local jeweller association and investment of about 30-35 lakhs. Mr. Venkat have decided to visit Hyderabad Branch Ofce, BIS seeking guidance from the Head (HYBO) over this issue. Mr. Rao also informed them that study on new methods such as Atomic Absorption spectroscopy, inductively coupled plasma are also coming up for testing gold purity however During discussion, Mr S V Rao Head (HYBO) apprised them that “An application (OA) No. the cost of these equipment is very high ranging from INR 50-90 lakh. 568/2019, James Jose, Managing Director, CGR Hall markers Pvt. Ltd. vs Govt. of India was led in the Hon’ble NGT highlighting the air pollution caused by acidic fumes in gold Mr. Venkat and Mr. Khanna thanked Mr. Rao for all the suggestions and left the ofce thinking hallmarking centres from the process of Gold Assaying and Hallmarking without complying about the way forward. the pollution control norms. Hon’ble NGT vide its order dated 18.11.2019 directed CPCB to “update the existing guidelines in the matter so that environmental norms are met in the Alternate Options/Way Forward: process”. There are no existing environmental guidelines prepared by CPCB for Gold Hallmarking Centres. Countries like UK has moved to non-destructive instrumental method for hallmarking nished jewellery items and retained re assay as a reference for cross checking. The other methods Mr S V Rao further added that “ultimate aim of the hallmark scheme is to provide jewellery with for yellow metal testing are: utmost accuracy and reliability to the customer and all over the world re assay is being used as the proven method for gold testing as its accuracy is the highest and meeting the Ø X ray Fluorescence Spectrometry (XRF) -Analysis restricted to surface layers. Accuracy compliance to the orders issued by of Govt of India imposed is mandatory”. ranges from 0.1 to 0.5 % and moderate cost of analysis. Mr Venkat and Mr Khanna afrmed to the statement and further asked “why only the re assay method is only to be followed? Are there any other methods not necessitating pollution control Ø Atomic Absorption Spectroscopy (AAS)- High accuracy and higher cost of analysis. board clearance?” Ø Inductively coupled Spectroscopy (ICP)- High accuracy and higher cost of analysis. Mr. S V Rao, Head HYBO further stated that “Birmingham assay ofce in UK has hallmarks based on XRF results alone”. Hearing this the eyes of Mr Venkat and Mr Khanna lit up and Ø Arc Optical emission Spectroscopy (Arc- OES)- Highly versatile method and high immediately he put up the question to Mr Rao “Then why this cannot be implemented in India also”. Mr SV Rao understood his anxiety and replied that “the conditions in UK and India are instrument cost. different” like in UK most of the jewellery is casted jewellery and thus composition of jewellery is consistent in entire lot, whereas in India most of the jewellery is handmade and many times CASE STUDIES 85 in one set, small parts received from different artisans are soldered and made into one jewellery set. Thus, there is lot of variation in the gold percentage even in one article. Mr S V Rao further added that “ISO has published a standard ‘Jewellery and precious metals — Non-destructive precious metal neness conrmation by ED-XRF’ in which they have also mentioned methods of testing precious metals using ED XRF. However, the standard mentions a lot of requirements of testing machines, calibration standard, method of testing which needs to be studied before implementing in the context of Indian jewellery. Seeing the unhappiness on Mr Venkat face, he further added that “BIS has undertaken research to see whether any relation can be established between the results obtained by XRF 84 CASE STUDIES
Alternative method recommendations Appendix 1 Fire Assay Pros Cons Fire Assay Vienna Convention • Accuracy~0.02% • Versa lity is limited to gold. While on this, In the modern world, in an attempt at standardizing the legislation on the • Equipment Cost is moderate • Modifica ons needed for Ni and Pd. inspection of precious metals and to facilitate international trade, in November 1972 a core • Pollu on group of European nations signed the Vienna Convention1 (Chapter 23) of Law of treaties of ICP United Nations Treaty collection) on the Control of the Fineness and the Hallmarking of ICP Precious Metal Objects. Articles which are assayed and found by the qualifying ofce of a • Complete analysis signatory country which conform to the standard, receive a mark, known as the Common • Sample Size~20 mg • High equipment cost Control Mark (CCM), attesting to the material's neness. This mark is recognized in all the • Faster speed for Ni,. Pd and white gold • Accuracy~0.1% other contracting states, including: Austria, Cyprus, the Czech Republic, Denmark, Finland, Great Britain, Hungary, Ireland, Israel, Latvia, Lithuania, the Netherlands, Norway, Poland, XRF XRF Portugal, Sweden, Switzerland and Ukraine (1). Other nations monitor the activities of the Convention and may apply for membership. • Complete analysis • Surface layer, flat samples needed • Non-Destruc ve • Accuracy~0.1-0.5% United Kingdom Touchstone Touchstone The hallmarking act passed in 1973 made hallmarking mandatory in UK. Hallmarks in UK consist of three compulsory and two optional marks (Appendix 2) Compulsory marks are the • Almost non-destruc ve • Accuracy~1-2% Assay Ofce mark, the sponsor's or maker's mark and neness in millesimal number. Optional • Equipment Cost is low • Unsuitable high carat and white gold marks are year mark and CCM. In the United Kingdom (UK), the hallmark is placed after testing by X-ray uorescence spectroscopy which is a Non-Destructive method and re assay method • High Accuracy AAS AAS is used in case of doubt in purity. Hallmarks are placed on a piece of jewellery by one of Arc-OES permitted four Assay Ofces with their own symbol for easy identication. The symbols are a • Versa le method • High cost of analysis castle, a leopard’s head, a rose, or an anchor. • Complete analysis • Sample processing required • Non-Destruc ve France Arc-OES France also requires hallmarks on gold jewellery. All gold jewellery that is sold in France is • High instrument cost tested for metal purity and marked with an eagle’s head, which has been the ofcial hallmark since 1838. This mark indicates that the piece is at least 18k gold, which is the minimum purity Discussion Questions that a piece must be in order to be assayed. France also requires a maker’s mark be placed on any gold, silver, or platinum jewellery sold in France, which must be a diamond-shaped mark • How do you rate BIS hallmarking scheme as compared to schemes followed in other parts with four equal sides, called a lozenge. of the world.? Spain • Can the methods used internationally be applied in Indian context where in India most of the jewellery is handmade whereas internationally most of the jewellery is casted? Spain follows a dual system of Assay Ofce hallmarking and licensed manufacturers marking. Hallmarking is a compulsory state requirement. Characteristics of the typical mark formation • How can the CPCB guidelines be fullled with win win situation for both the parties are: • What options are available with Mr. Venkat for running his centre? Which option is the best Mark of guarantee: It accredits gold’s alloy and can only be put by the Ofcial or Authorised as per you? Laboratories of the Autonomous Communities accrediting the ofcial law of the precious metal. • Do you think any correlation has been drawn between XRF reading and reassay reading? What could be reasons for the same. First law: 750 neness (parts per thousand) • What improvement needs to be done in hallmarking scheme followed in India to make it Second law: 585 neness (parts per thousand) world class. Mark of identication of origin: It accredits to the manufacturer or importer. This mark must be registered with the Spanish Ofce of Patents and Marks. 86 CASE STUDIES CASE STUDIES 87
Sponsor mark details: This identies the person or company manufacturing or importing gold Appendix 2 for sale in the country Fineness: Hallmarking is required for gold articles above 1 g. It is dened in parts per thousand (ppt). Acceptable neness standards are 375 ppt, 585 ppt, and 750 ppt Assay Mark: The assay mark has to be one of the following seven assay ofces. V1: Valencia M1: Madrid A1: Andalusia G1: Galicia C1 and C2: Catalonia B2: Balearic USA In the US, hallmarking is not a legal requirement. Many US jewellery collectors instead look for certain maker’s marks for assurance that a piece is of high quality. The problem is that maker’s marks aren’t regulated, so there’s no way of connect a maker’s mark to a process that proves a piece is advertised honestly. In fact, in the US, there is no legal requirement to even register a maker’s mark; it’s simply up to the maker to add their mark as they wish. In other nations in Europe, other regulations are in place. Some countries require a hallmark, such as Hungary, Sweden, Finland, and Russia. In other nations, like Italy, instead of requiring a hallmark, the nation simply requires that maker’s marks be registered, and these are used as a sort of independently monitored hallmark. The difference between a hallmark and a maker’s mark, even in a nation where maker’s marks are regulated, is that a hallmark indicates that the piece was physically sent to a third-party ofce and tested for purity. Even in nations where the maker’s mark is registered, it is still based on the honour system, which requires the jeweller to test their own pieces and then advertise them honestly. 88 CASE STUDIES CASE STUDIES 89
Appendix 2 Appendix 3 On 372 Gold samples, purity was measured through XRF and Fire Assay Methods and the statistical tests were done using T Test. XRF Fineness Sr XRF Fineness Sr XRF Fineness Sr Reading in re No Reading in re No Reading in re No of Au assay assay assay (ppt) of Au (ppt) of Au (ppt) (ppt) (ppt) (ppt) 1 926.6 916.99 125 938 921.3 249 927.6 919.15 2 922 916.67 126 925.5 917.5 250 960.3 919.1 3 923.1 914.52 127 926.5 924.5 251 917.1 916.05 4 915.8 916.03 128 930.7 924.5 252 941.8 933.6 5 913.5 915.08 129 925.8 914.15 253 924.3 916.4 6 914.9 914.99 130 930.7 912.1 254 926.5 917.5 7 945.4 916.94 131 934.9 915.35 255 922.8 917.3 8 924.5 911.72 132 928.2 917.1 256 933.2 915.05 9 917.3 916.06 133 927.4 914.05 257 921.2 915.65 10 944.9 916.85 134 915.4 915.05 258 921 917.3 11 918 916.37 135 938.7 916.75 259 923.1 917.6 12 912 913.8 136 922.9 918.45 260 924.5 917.85 13 828.8 921.16 137 944.8 916.6 261 930.8 917.25 14 908.2 916.93 138 936.9 914.9 262 941.6 919.5 15 916.4 915.6 139 926.3 919.5 263 918.65 917.6 16 928 927.06 140 925.4 921.7 264 948.9 932.1 17 917.4 919.93 141 931.2 922.2 265 940.3 941.05 18 936 933.6 142 919.4 917.05 266 932.6 920.35 19 929.8 929.71 143 916.1 914.65 267 919.9 915.7 20 937 935.22 144 918.8 916.15 268 919 914.35 21 916.8 917.29 145 918.9 916.65 269 928.7 916.3 22 934.3 931.51 146 919.8 919.55 270 929.3 925.65 23 931.8 934.19 147 943 919.9 271 917.6 916.15 24 932.8 934.07 148 937.9 919.45 272 921.8 915.35 25 914.7 916.72 149 925.5 915.15 273 926.7 917.5 26 935.1 933.18 150 939.6 920.2 274 927.7 917.15 27 929.3 932.35 151 923.2 914.3 275 923.6 918.7 28 933.7 933.32 152 931.1 919.8 276 919.7 917 29 931.6 932.42 153 928.4 912.4 277 930.3 918.8 90 CASE STUDIES CASE STUDIES 91
30 923.2 924.21 154 932.9 915.75 278 918.1 914.2 65 925.6 917.25 189 916 915.3 313 947.9 918.55 31 917.5 918.58 155 922.9 919.65 279 935.1 916.2 66 927.6 912.7 190 928.6 918.1 314 920.4 908.55 32 911.3 911.29 156 937.3 919.85 280 917.5 916.2 67 922.4 921.55 191 921.2 915.1 315 933.1 33 925.3 916.68 157 943.4 919.8 281 913.1 914 68 927.4 918.2 192 926.8 914.9 316 920.8 916 34 915.5 920.29 158 937.5 914.35 282 919.5 916.85 69 922.7 915.65 193 932.9 919.25 317 920.5 919.3 35 912.9 909.78 159 937.3 918.45 283 918.5 916.95 70 926.4 919.45 194 925.7 914.2 318 931.6 916.9 36 911.7 917.54 160 928.5 918.15 284 921.7 917.35 71 941.7 915.2 195 942.8 914.95 319 923.35 917.55 37 771.3 752.75 161 921.4 919.65 285 924.8 917.2 72 928.5 919.05 196 928.6 914.55 320 920.2 914.75 38 921.5 914.3 162 920.5 920.15 286 941.6 922.3 73 940.3 910.1 197 927.3 924.95 321 921.9 917.1 39 920.3 163 919.7 914.45 287 920 917.4 74 943 929.4 198 920.3 919 322 918.5 914.75 40 918.3 916 164 921.1 288 921 915.95 75 927.3 917.2 199 930.2 931.8 323 935.8 917.65 41 924.8 916.6 165 920 915 289 960.1 949.4 76 923.9 918.5 200 917.5 914.7 324 906.6 917.55 42 926.5 914.6 166 928 914.25 290 936 902.65 77 929.9 917.05 201 914.5 912 325 922.6 916.55 43 920.8 915.05 167 935.9 291 922 915.55 78 930.6 917.05 202 919.3 916.9 326 916.5 918.35 44 921.5 912.05 168 932 923 292 923.4 917.95 79 800.6 798.15 203 927.4 914.15 327 929.6 916.55 45 921.3 914.6 169 925.7 915.15 293 910 916.9 80 928 912.95 204 911.8 913.15 328 920.9 917.1 46 923 914.3 170 927 917.4 294 918.5 916.35 81 918.5 916.2 205 923.5 912.55 329 954.3 917.15 47 922.1 914.15 171 920.2 915.6 295 917.6 916.8 82 934.8 914.65 206 919.3 913.7 330 929.5 919.25 48 923.1 916.8 172 921.4 921.6 296 922.1 916.35 83 916.4 912.15 207 922.3 913.75 331 919.4 914.8 49 924.2 918.7 173 922 918.05 297 920.6 918.85 84 765.7 750.9 208 925.6 912.85 332 929.8 915.55 50 923.5 915.95 174 919.7 919.6 298 922.8 922.7 85 925.2 918.8 209 917.2 914.1 333 927 915.85 51 753.1 914.3 175 919.8 921.35 299 925.4 923.7 86 921.1 914.85 210 920.9 915.95 334 918.35 904.5 52 923.1 750.1 176 936.7 300 918.8 916.55 87 921.9 915.35 211 925.6 916.4 335 920.6 916.55 53 918.6 914.9 177 927.1 914 301 918.5 916.05 88 916.5 915.2 212 916.5 918.5 336 917.3 918.85 54 921.2 915.85 178 917.3 915.9 302 920 915.1 89 917.1 915.65 213 945.9 916.1 337 927.4 916.3 55 913.3 918.5 179 927.2 918.85 303 922.9 917.5 90 934.3 916.35 214 928.2 917.25 338 963 918 56 915.9 912.9 180 939.3 918.75 304 921.1 912.25 91 917.2 916.25 215 932.2 917.05 339 919 918.6 57 918.8 914 181 922.3 916.55 305 958.1 916.8 92 919.2 917.15 216 945.3 917.6 340 918 916.7 58 941.9 916.75 182 922.9 914.5 306 927 914.55 93 915.2 914.82 217 928.9 918.4 341 946.9 916.3 59 925.2 915.75 183 940.7 917.1 307 922.4 918 94 919.91 914.8 218 919.7 916.25 342 922.8 917.5 60 918.1 911.75 184 929.3 915.8 308 915.9 916.55 95 929.4 916.5 219 917.9 917.05 343 932.8 917.9 61 917 916.35 185 925.6 918.75 309 927.4 918.45 96 921.5 916.5 220 919.3 916.55 344 927.6 916.75 62 915.4 911.5 186 921 918 310 939.3 914.8 97 929.4 916.55 221 931 915 345 928.6 920.9 63 921.8 916.3 187 917.5 917.6 311 938.3 916.25 98 920.3 917 222 919.4 917.2 346 942 921.45 64 926.2 912.05 188 918.1 921.8 312 931.3 918.1 99 922.2 917.15 223 949 914.35 347 936.3 921.1 914.95 919.6 920.9 915.8 915.15 92 CASE STUDIES CASE STUDIES 93
100 923.9 918.15 224 931.3 918.8 348 925.2 918.35 A paired sample T-test was adopted to compare XRF and re assay methods for gold testing. 101 918.8 915.7 225 925.2 916 349 924.4 918 The T-test was conducted between the means obtained from the XRF analysis and the re 102 923.2 915.7 226 928.3 917.7 350 925.9 assay method using a signicance level of 0.05, which symbolizes a 5 % risk of concluding the 103 932.2 914.15 227 934.2 918.2 351 918.9 917.05 existence of a difference when there is no real difference. The null hypothesis gets rejected if 104 920.1 917.5 228 921.3 917.6 352 922.9 917.65 the measured p-value is lower than the signicance level, inferring that the difference between 105 913.4 914 229 918.5 915.75 353 919.6 917.2 the population means is statistically signicant. The table shows that the average for the XRF 106 918.6 918.5 230 917.4 915.4 354 935.2 917.6 analysis was 924.260645, whereas 915.900322 for the re assay method. Subsequently, with 107 925.6 923 231 920.4 915.35 355 917.6 371 as the degree of freedom, the p-value was estimated as 4.41570E-42, while the t stat stood 108 932.3 916.8 232 921.2 915.8 356 949.7 910 at 15.487376930. Thus, the data illustrates that the magnitude of the t-value is higher than the 109 941.7 912.7 233 915.5 914.6 357 921.2 915.55 critical value (calculated from the t table) and lies in the rejection region. Furthermore, the 110 941.3 922.75 234 930 917.2 358 918.4 916.9 computed p-value is considerably lower than the signicance level of 0.05; therefore, the two 111 932.2 916.8 235 938 916.85 359 925.5 917.85 methods indicate a signicant difference in usability and cannot be used interchangeably. 112 918.8 917.6 236 932.4 916.6 360 921.6 916.3 113 967.7 916.45 237 938.5 915.6 361 924.1 917.4 Paired T Test 114 954.1 931.1 238 927.1 917.45 362 931.3 915.5 115 943.2 925.9 239 923.45 924.3 363 917.4 915.55 771.3 752.75 116 917.6 916.7 240 919.15 923 364 916.4 914.95 117 927.2 916.75 241 917.6 917.15 365 929.7 915.55 Mean 915.825533 907.0947208 118 918.3 914.9 242 918.5 917.05 366 921.7 917.1 119 925 914.25 243 919.6 915 367 930.7 915.55 Variance 1757.266508 1785.221442 120 923.6 915.9 244 925.8 918.55 368 930.1 916.45 121 942.7 916.45 245 920.8 916.15 369 924.8 915.3 Observations 394 394 122 930.7 917.35 246 919.1 917.35 370 923.3 915.4 123 935.3 918.1 247 914.6 914.35 371 917.4 913.5 Pearson Correlation 0.952887891 124 932.3 915.85 248 922.5 919.1 372 960.5 918.1 916.65 Hypothesized Mean Difference 0 922.95 df 393 t Stat 13.41051891 P(T<=t) two-tail 4.98832E-34 t Critical two-tail 1.966018615 Statistical Analysis T Distribution Following Parameters needs to be determined to do Statistical Analysis: 1 Probability Density P (X) tstat=15.4873769 Region of null hypothesis 0.5 tcritcal=1.96637 H0: µ1-µ2=0 a) Mean Region of alternative hypothesis b) Variance 0 tstat>tcritical H1:µ1-µ2≠0 c) Observations 0 So null hypothesis is rejected d) Pearson Correlation e) Hypothesized Mean Difference CASE STUDIES tcritical f) Df g) T Stat 12 3 h) P(T<=t) two-tail i) t Critical two-tail t Values 94 CASE STUDIES 95
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