(FORTUNE Magazine) – SMALL manufacturing companies are in crisis. Their main customers, the big boys of U.S. industry, have been humbled by global competition and are seeking their salvation in higher standards of quality and productivity. The big companies can't find redemption alone. So, like passionate converts, they are spreading the gospel of efficiency to their suppliers. Suddenly, small companies whose greatest concern was once to simply get the product out the door are under pressure to adopt the latest technologies, use quality control methods, and slash prices. . The suppliers often do not understand the new processes and management techniques their customers want them to embrace. Says L. Joseph Thompson, professor of manufacturing at Cornell's Johnson School of Management: ''Small companies are less likely than large companies to have made improvements for productivity. They're concerned about meeting the payroll and not about the longer term.'' Besides, if the suppliers do manage to come up to their customers' idea of quality, they expect to be paid more, not less. They're not the world's best experts in management. Suppliers had better learn fast. Most large U.S. manufacturers are reducing their number of vendors in order to control quality. Says Charles E. Lucier, a Booz Allen & Hamilton vice president: ''Most want two or three suppliers instead of ten or 12.'' They will give preference to those close to home. Russell W. Meyer, the chairman of Cessna Aircraft, the small-plane manufacturer headquartered in Wichita, says: ''We spend a lot of time with subcontractors. It's a lot easier to work with someone in Wichita than with someone in Los Angeles.'' To make the cut, suppliers will have to go through a rigorous survival drill. Buyers routinely send inspection teams to rate a small company's plants. They want to see Japanese-style just-in-time manufacturing and delivery techniques, statistical process controls that identify causes of defects, and the ability to handle data electronically. Some small companies resist, either from ignorance or from fear. Says Joseph A. Bockerstette, a manufacturing specialist at consultant Coopers & Lybrand: ''Many suppliers feel just-in-time is a way for FORTUNE 500 companies to dump on them.'' When a large company begins asking for three deliveries a day, a small supplier may end up stockpiling the goods the customer wants. Craig Skevington, president of Factory Automation & Computer Technologies, a consulting firm near Albany, New York, that specializes in manufacturing, says, ''Just-in-time becomes just-in-case.'' The stringent requirements could bring a wave of restructuring among little manufacturers as wrenching as the one the large companies went through. Because the small fry are great sources of innovation and new jobs, Skevington and others worry that a weakened small manufacturing sector could chill entrepreneurship and hurt the ability of the U.S. to generate new products. Help is on the way. New organizations, sponsored by government and private companies, are coming to the rescue of manufacturing's embattled little guys. Among them: -- The Cleveland Advanced Manufacturing Program, one of nine technology research centers financed by the state of Ohio's $250 million Thomas Edison Program, provides a free assessment of a manufacturer's production line and recommends improvements. -- In New York and Michigan, state-employed manufacturing experts roam industrial areas, offering small companies that can't afford consultants new ways to improve their manufacturing processes. -- On Massachusetts's Route 128, Coopers & Lybrand has started a manufacturing center to help local outfits solve their production-line problems. -- In Cleveland, Troy, New York, and Columbia, South Carolina, regional manufacturing technology centers have sprung up. Funded through the National Institute of Standards and Technology (formerly the Bureau of Standards), they aim to transfer advanced manufacturing technology developed in government labs to smaller companies. -- In Pennsylvania, government and corporations are raising $60 million for nine Industrial Resource Centers that help the state's small manufacturers by providing consultants on technology, management, and marketing. -- In Wichita, the Center for Technology Application -- financed by local companies, a regional economic development agency, and Wichita State University -- offers training classes for computer machine tool operators, provides engineering advice, and promotes closer ties between large and small companies. WICHITA'S technology center provides some fascinating insights on how such programs help small suppliers. The flat plains spreading to the horizon and the big open sky around Wichita suggest God had flying as much as farming on his mind when he created the vast Midwest. A fortuitous combination of air pioneers and willing investors made Wichita a wellspring of aviation activity. Wichita is home to Cessna, Beech Aircraft, Gates Learjet, and the military aircraft division of Boeing. Hundreds of high-tech machine and tool-and-die shops grew up around the aircraft business. Other major manufacturers include NCR (computers) and Coleman (camping equipment). Among the wheat fields, manufacturing generates 20% of Kansas's output of goods and services. In 1986, when Wichita's most important industries -- aircraft, farming, and oil -- slumped at the same time, the area's most prominent executives and politicians launched a major development program. The WI/SE Partnership for Growth, named for Wichita and surrounding Sedgwick County, decided that the usual efforts -- lure new companies, revitalize the downtown, and get more direct flights from major cities -- would not be enough. The group also wanted to help small manufacturers. So it started the Center for Technology Application at Wichita State University, whose large engineering department has long provided support to the aircraft industry. The center asked more than 400 small manufacturers what their needs were and created programs to meet them. When the companies complained about a lack of skilled workers, the partnership organized classes in machine tool programming and shop math at the regional vocational school. When tool- and die-makers said they wanted to receive manufacturing data electronically, the center set up a task force to find inexpensive ways of transmitting data by modem between the large contractors and their suppliers. Knowing how vulnerable they are, many small manufacturers eagerly supported the program. ''The smaller you are, the better you have to be,'' says Willie F. Tomison, co-owner of NC Machine, a tool-and-die shop (1988 sales: $310,000) whose customers include Boeing, Bell Helicopter, and General Dynamics. ''It's obvious we're going to have to be able to meet new manufacturing requirements.'' The shelf outside Tomison's office is lined with familiar products his company has helped produce. Among them: a styrofoam container for a McDonald's hamburger, the handle for a Sears Craftsman wrench, and the plastic holder for a Toyota auto seat belt. Tool-and-die shops like Tomison's must translate the designs of engineers into products or the molds to make them. The job combines brute strength and incredible delicacy: carving a block of metal to accuracies far finer than a human hair. Traditionally, big companies prepare blueprints for a part and send them to the tool shops, where the drawings are measured by hand and converted into movements on a milling or drilling machine. Now, computer- controlled milling machines and computer-aided design offer another option: direct transmission of an engineer's concepts by tape or modem to the sophisticated tooling machines. TOOLMAKERS talk of reducing from weeks to days the time it takes to translate a customer's design into a finished product -- and of eliminating most errors in the process. Says Tomison: ''If you want to compete, you're going to have to work fast.'' He is working with the Wichita partnership to test equipment and transmission standards for speedier design and production. Why is the Wichita program a good model? First, WI/SE got off to a fast start because organizers immediately recruited 32 important leaders of business, government, and academe. The heavyweights raised a quick $9 million, eliminating lengthy fund-raising drives. Second, the attempt to help small companies was part of an overall economic development plan and thus could command lots of community resources. To compile a directory of companies with electronic capability, the partnership enlisted an organization of retired engineers. Wichita State's Institute for Aviation Research and its Composite Materials Laboratory willingly diverted their focus from large aviation companies to small manufacturers. Third, everyone bought into the program. The large companies' need for better suppliers meshed with the desire of the small companies to sell more. Both groups have enthusiastically supported the training classes and the data transmission project. But few small manufacturers have joined the university- sponsored quality council, perhaps because their customers are just starting to demand perfection. One of the most controversial aspects of WI/SE was a proposal to transfer technology from large to small companies. The notion was that the big guys develop and discard many new technologies because they offer no immediate practical value. But smaller companies could devote the energy needed to bring them to market. So far, only NCR has agreed to participate in the transfer program. The company came up with 14 items that Colin Isenman, NCR's director of engineering in Wichita, describes as ''mostly half-products: more than a concept but pulled from development.'' In January, NCR invited 17 local companies to a presentation of the ''half-products.'' So far none have decided to ask NCR for a license and no other large manufacturers have followed NCR's lead. They cite restrictions in government contracts and argue that their neglected ideas would require too much capital investment for small companies. Perhaps they are also worried about competition. WHAT hath Wichita wrought? Small manufacturers report they feel less isolated because large companies and the university are involved in their problems. For that reason, Bill J. Pritchard, president of Wichita Tool, says he canceled plans to move his company to Texas. The meetings have fostered a new spirit of cooperation among the minimanufacturers, who now talk of joining forces to bid on projects no one could handle alone. Closer ties between large and small companies have also flourished. Excel Manufacturing, a maker of precision machine parts and a supplier to Boeing, McDonnell Douglas, and General Dynamics, worked with Cessna for the first time in the partnership test of an electronic data transmission system. Impressed by Excel's work, Cessna invited the company to bid on contracts worth $30,000 for wing fittings on the Citation III corporate jet. Excel won the contracts and is now bidding on several other Cessna jobs. Beyond Wichita, there are other success stories. When the Cleveland Advanced Manufacturing Program offered a free plant inspection to members, Cleveland Machine Controls, a $40 million manufacturer of industrial controls, signed up and came away with ten recommendations. President William N. Jones adopted suggestions for scheduling work flow and using more efficient machines for high-volume work. Says he: ''There's no question we've reduced inventory and the time a work order is in our shop.'' In New York City, Ed Lewison, one of the state's ten technology extension agents, has helped small manufacturers upgrade their technology inexpensively by finding sources of rebuilt equipment. Lewison also brought two companies together to develop a metal stamping business; the heads of both say the joint enterprise will eventually produce $2 million in revenues. Consulting firms are getting in on the action. Recently, Coopers & Lybrand's Center for Manufacturing Technology in Massachusetts developed a pilot computerized system to help a small company design and test manufacturing procedures for book and magazine production. The test enabled the company to shorten the design-to-delivery cycle from 14 months to six months. Small manufacturing companies are perhaps the most dynamic part of American industry. In the decade from 1976 to 1986, they created 1.4 million jobs while the big manufacturers lost 100,000. Many large companies are shifting to what the management experts call distributed manufacturing. That means treating their factories like small companies and farming more work out to suppliers. There's plenty of business for small manufacturers, and plenty of reason to help them do it better. After all, says Booz Allen's Lucier: ''They are the future of manufacturing in the U.S.''