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Columnist H. James Harrington

Photo: Scott Paton, publisher

  
   

Using the Consortium Model
Small businesses can join others to improve their processes.

Stanley A. Marash, Ph.D.
smarash@qualitydigest.com

During the past two years, the United States, like many other nations, has experienced trying economic times. Faith in corporate America has diminished as accounting scandals and fraudulent activities fill the headlines. Small companies are often subject to the ills of bigger ones--which are, in many cases, their customers--as this toxic economic fallout filters down.

Despite the turmoil, thousands of U.S. businesses continue their commitment to quality initiatives. As profits erode and competition increases, it becomes even more imperative for organizations to improve their efficiency while continually enhancing service and product quality to their customers.

One proven tool for helping smaller businesses accomplish these goals is the consortium model, in which a group of companies joins together to implement a new business management model. The companies can be linked by geographic proximity, industry, technology, customer base or any combination thereof. Consortiums can be sponsored by state governments, industry associations or the major corporations for these companies' supplier base.

New Jersey helped pioneer the consortium approach in 1993, when it became the first state to help small companies obtain ISO 9000 registration. Since then, hundreds of companies have gone through the process, which consists of several basic components:

A kickoff meeting presented to the top management of member companies to explain the process, establish ground rules and gain support

A baseline evaluation of each consortium member to provide insight into current strengths and weaknesses

Essential training modules (e.g., executive briefings, auditor training and documentation training) to which each member sends two or three people

Monthly meetings, at which members share progress, problems and lessons learned

Individual on-site consultations for each consortium member

A preassessment audit for each member to gauge its readiness for a registration audit

This process has been modified, adapted and used internationally to prepare companies for ISO 9000, FDA compliance, QS-9000 and other quality initiatives. Today, STAT-A-MATRIX is about to launch a consortium of small companies interested in implementing Six Sigma. Why not? Companies that have implemented ISO 9001:2000 are required to demonstrate continual improvement. What better way than to build Six Sigma into their ISO 9001 management systems?

Joining together for process improvement--whether for research, development, design, manufacturing or service--can create a competitive edge for small businesses. Two important reasons for joining are the shared knowledge of processes used by others and the reduced cost of implementing an effective management system. Whether applying process controls or implementing regulatory requirements, companies in a networking environment with a group of industry peers and the leadership of a trained facilitator can appreciate the common problems and solutions facing small businesses.

Perhaps more important, a consortium affords small companies the opportunity to access tools used by major corporations--everything from ANSI/RAB-registered lead auditor training to Six Sigma Champion, Green Belt, and even Black Belt training and coaching. These tools are all components of effective continual improvement processes, which are particularly important today because they:

Ensure that companies improve their products, service quality and business efficiency in a climate of diminishing resources

Provide a competitive edge and marketing advantages over competitors

Help eliminate wasteful and unnecessary redundancy in management systems

Help companies meet and exceed customer requirements

Make companies more productive and profitable

The consortium model's success has been demonstrated time and again. Companies that have participated in the process report improved processes, productivity and profitability; reduced implementation costs; enhanced communication between departments, vendors and suppliers; increased customer satisfaction; productive staff trained in important new skills; and opportunities to meet potential partners.

In hard times like these, companies obviously must adjust and make concessions, but they should never compromise on their efforts to establish strong quality management systems. Consortium programs offer an economically sound approach to help ensure this will never happen. The economic uncertainty currently affecting the United States will eventually pass; why not make sure your company is one of the forward-looking survivors?

About the author

Stanley A. Marash, Ph.D., is chairman and CEO of STAT-A-MATRIX Inc. Fusion Management is a trademark of STAT-A-MATRIX Inc. ©2002 STAT-A-MATRIX Inc. All rights reserved. Letters to the editor regarding this column can be e-mailed to letters@qualitydigest.com.