I heartily recommend the alternate Crafting rules in Unearthed Arcana.
The system is designed for those campaigns where there is no down-time, but is perfectly usable where there *is* down-time.
The basics are: Characters have a pool of "Craft Points". They receive 100 CPs x their new level each level they advance. (So, the base pool for a 1st level character is 100, a 2nd level character is 300 {1x100 + 2x100}, etc.) Each Item Creation Feat also adds several hundred CPs to the character's pool.
Making items is done "overnight" by paying 1 CP per 10 gp of the Market Price. It is presumed that this represents the Crafter having worked on the item over time while resting and such. Only 1 item can be made per crafter per night.
If the party has time, the CP cost of making an item can be greatly reduced (but not eliminated) by spending the normal amount of time.
Other characters can "assist" by paying up to 1/2 the CP cost for the item (so those Fighters and Rogues can still help improve their goods, and have a use for the CPs they will accumulate over time).
Some new Feats are added to the mix: Craft Masterwork Arms and Armor, Craft Masterwork Weapon, Craft Masterwork Ranged Weapon, Craft Alchemical Item, and Talented Craftsman. The Masterwork feats are required to be able to make Masterwork items (which I like, because it gives the 5th level Expert Armorsmith villager a Feat that represents his dedication to his craft and makes it less likely that a wandering Fighter will be able to craft better armor than a Professional); Craft Alchemical Item allows non-spellcasters to make Alchemical goods. All add more CPs to the character's pool (the formula appears to be 500 CPs x the Minimum Caster Level requirement for the feat). Talented Crafter just adds 500 CPs to the pool, but can be taken over and over.
[Edit: Oh, and the system is used for crafting non-magic items as well as magic items.]