The Consortium Approach to Success
Stanley A. Marash, Ph.D.
About a year ago, I wrote in
this column about the consortium model for small businesses.
This month, I’d like to add some insight into how
the system works.
To remain competitive in today’s business-to-business
environment, smaller companies must meet the increasingly
stringent quality requirements imposed by their customers--both
larger corporations and government agencies. Registration
to ISO 9001:2000, for example, is a given requirement for
many industries, as well as for selling to the U.S. Department
of Defense. Moreover, industry-specific variants of the
standard, required within specialized industries such as
medical devices, automotive, aerospace and telecommunications,
place an additional burden on smaller firms--particularly
those that sell to more than one industry. And some companies
go beyond ISO standards and insist that their suppliers
employ tools such as Six Sigma and lean enterprise.
In 1993, a public-private initiative involving the New
Jersey Department of Commerce, various New Jersey agencies
and organizations, as well as officers from small businesses
and economic development organizations developed the concept
of a consortium of small businesses that would pool resources
to make ISO 9001 and other such standards affordable and
attainable. By joining a consortium, small companies could
achieve benefits from partnering and cost savings due to
economies of scale.
Currently, 42 states provide some level of customized
training funding for small businesses, and the model has
been consistently successful.
Participating businesses must have a demonstrated need
for the training, be committed to the process and pay their
employees’ wages during training. However, these companies
might still lack funds to cover outside assistance and instruction
as well as the resources to design a quality management
system for their firms. By including groups of companies
in a joint venture, skills training can be cost effectively
presented.
Because these small firms are unfamiliar with training
and don’t have training staff or facilities, the consortium
hosts--often local colleges--play a vital role in administering
and hosting the classroom-based training. The host’s
follow-through ensures training continuity and serves as
a vital support resource.
The New Jersey companies partnered in regional programs
lasting approximately 12 months and leading toward ISO 9001
registration. The purpose wasn’t merely to teach ISO
9001 principles to member companies but also to implement
effective quality management systems as the program progressed
through a series of monthly training courses coupled with
on-site coaching. Some common problems shared by the companies
were:
Poor quality, a high rate of rejects (e.g., scrap) and no
real process to determine good and bad products
Shortage of qualified in-house staff to train others and
no formal training system
Potential customer loss because businesses weren’t
registered to ISO 9001, bad shipments, billing errors, inefficiencies
and poor routine
Lack of employee awareness as to how product quality affects
job security
No formal quality management system throughout their processes
A mandate from customers to adhere to ISO 9001 by a certain
deadline or lose any business
The typical consortium process included these steps:
ISO 9001 executive overview--management orientation for
all companies in the consortium
ISO 9001 gap analysis--each company individually
12 monthly group meetings--all companies together, reviewing
progress and sharing lessons learned
On-site, one-on-one coaching--each company individually
Documentation training--formal training for all companies
together
Lead auditor training--formal training for all companies
together
Internal auditor training--formal training for all companies
together
Preassessment audit--each company individually
Corrective action review--each company individually
In addition to ISO 9001 registration, specific program
outcomes included:
Consistent documentation of the entire company process
Greater quality awareness by all employees
A positive cultural change involving the entire population
Increased efficiency and productivity
Enhanced communications throughout each company
Reduced scrap and/or rework and the expenses incurred
Customer expectations met
Companies better able to deliver a quality, cost-effective
product on time
Today, the New Jersey version of the model is still working.
Several other consortiums are in progress or getting under
way, helping companies with ISO 9001:2000, basic quality
skills training and, in one case, Six Sigma. The consortium
model truly gives small companies the ability to emulate
larger ones.
Stanley A. Marash, Ph.D. is chairman and CEO of The
SAM Group, which includes STAT-A-MATRIX Inc. and Oriel Inc.
Letters to the editor regarding this column can be e-mailed
to letters@qualitydigest.com.
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