PROVE THE VALUE

Trends and Opportunities

As operations researchers pursue their careers, a wide variety of industries and specializations remain open to them. In the United States, the Bureau of Labor Statistics reports that major employers of operations researchers include air carriers, computer and data processing services firms, financial institutions, insurance carriers, engineering and management services firms, telecommunication companies, and the Federal Government. The Bureau also writes that job opportunities in O.R. should be good because of interest in improving productivity, effectiveness, and competitiveness, and because of the extensive availability of data, computers, and software.

Following is a list of current trends influencing O.R. and opportunity areas for O.R. professionals. Of course, these are only examples; opportunity is truly everywhere.

Opportunities by industry
Academia: Among INFORMS members, positions teaching at universities remain a strong source of employment. O.R. departments have revitalized themselves at engineering and business schools such as the University of Alberta, Indiana University, Villanova University, Georgia Tech, and Northwestern University. For more on O.R. opportunities and issues in academia, go to Issues & Strategies for Academics.

Agriculture and food are discovering operations research applications for planting, procurement, and distribution.

Airline industry: Although experiencing hard times, the airline industry is still a predominant area of employment, both at airlines and at consultants contracting to airlines. Revenue management and pricing, airline network planning, crew scheduling, maintenance planning, parts inventory management, and fuel management offer assignments to operations researchers. Much O.R. work in the industry is outsourced, but several airlines are reviving their internal O.R. departments. Some growing airlines may also offer opportunities to operations researchers. A new source of opportunities: fractional fleet services that allow corporations to dispense with corporate planes by purchasing a set number of hours per year of contracted private planes. With providers obligated to supply airplanes in the face of variable demand, operations researchers are finding growing opportunities.

Energy: The oil industry was one of the first users of operations research techniques to help manage their refinery operations, and operations research technologies are heavily used by all the major oil companies. Electrical and hydro-electric companies use operations research to determine how to efficiently produce power as well as trade power among their partners. With the deregulation of the power industry, numerous opportunities for operations research are bound to arise.

Forestry uses O.R. in harvesting and at timber mills. Timber is a strong application area.

Health care: Health care continues to offer a variety of uses for operations research, including quality assurance, the design of medical informatics, emergency room scheduling, resource modeling, and, in some cases, diagnosis. Emergency services like 9-1-1 and air ambulances rely on operations researchers to keep response times quick and determine fleet levels. A recent application of revenue management by a hospital for the purpose of contract negotiation with vendors may point to a new way of containing medical costs. As the health care system and hospitals in particular seek to reduce costs and make better use of resources, operations researchers can model better systems as hospital staffers and as consultants.

Manufacturing: Manufacturing organizations continue to use operations research to optimize factory operations. One category of manufacturing, semiconductor optimization, is seeing a vital use of O.R. professionals. O.R. professionals may also offer guidance in technology adoption. Warehouse optimization, tied to manufacturing, is a potential growth area. Supply chain planning, a key aspect of any manufacturing operation, is driven by operations research technologies.

Marketing: Marketing departments use operations research to determine the best ways to target their diversified customer bases. Operations researchers can offer guidance on what are the right offers to give to the right customers, and when it is no longer profitable to target certain segments of the market.

Mining and similar sectors working with natural resources may rely on the lessons of the forestry industry, offering a potential growth area.

Pharmaceuticals: Pharmaceutical companies continue to use O.R. professionals in the manufacture and development of products, and in the management of drug portfolios representing the assortment of different drugs maintained by companies.

Retailing: Although retailing companies don't currently use O.R. heavily, clothing manufacturers and stores are exploring O.R. applications to forecast sales, plan purchasing and production, do pricing, and improve supply chain management.

Telecommunications, although experiencing difficult financial times, may again rely on operations researchers in various areas as the economy and the field stabilize.

Transportation: Operations researchers perform logistics for air traffic control, trucking, and railroads. Real-time dispatching and delivery truck routing are important O.R. areas. The healthy package delivery field is one that continues to rely heavily on the work of O.R. Another important area for operations researchers is international freight, including the scheduling and pricing of containers.

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Opportunities in the public sector
The public sector has offered opportunities in various areas, including school location, fire and ambulance station location, police and firefighter deployment, and policy science.

Homeland security: Homeland security and related interstate and federal systems may represent opportunities for operations researchers, who can advise planners about where to spend and place resources within the system. O.R. can help the fight against terror via routing and rerouting traffic in case of terrorist attack, and the improvement of systems like the electrical grid.

Military: Conceived during war, operations research remains strong in the military, where the services use O.R. for personnel force management, logistics, transportation, war gaming, strategic planning, tactical planning, and war theater optimization. Consultants to the military employ operations researchers, as well. The U.S. Bureau of Labor Statistics reports that in the United States, the military remains the largest employer of operations researchers in the Federal Government, and that many operations research analysts in private industry work directly or indirectly on national defense.

Municipalities and states: These levels of government rely more on operations researchers to deal with highway traffic delays and the development of intelligent traffic systems.

Public health: In public health, operations researchers have made important recommendations in drug treatment, AIDS prevention, and organ donation.

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Trends by application
Data mining: With the widespread emergence of very large databases, many different organizations are finding vital help from O.R. professionals in extracting the information they really want. O.R.'s data mining methods, whose use is growing rapidly, give superior solutions in diverse database-plumbing applications – such as predicting purchasing behavior, segmenting customers, detecting fraud, assessing credit risk, and anticipating customer attrition.

E-commerce: Even after the dot.com bust, E-commerce offers opportunities in business-to-business and consumer areas of online purchasing, vendor purchasing models, online auctions, and supply procurement. In addition to sellers, bidders are looking to O.R. models for decision support on how to bid intelligently. Online grocers that make home delivery are another area of opportunity for operations researchers.

Environmental applications: Operations researchers offer aid in pollution control and the design of systems to prevent shipping accidents.

Financial engineering: Financial engineering and related work is seeing some instances of growth for operations researchers, with work in portfolio selection, portfolio models, and hedge fund strategies. Banks rely on risk management modeling, among other applications. Insurers rely heavily on operations researchers to do risk analysis and pricing. Some credit card companies use operation researchers to work on credit scoring.

Marketing: Direct marketing models, customer segmentation, Customer Relations Management (CRM) – all rely on the service of operations researchers, both at the business-to-business and consumer level.

Revenue management: The practice of retail management has extended from the airlines to hotels, cruises, car rental operations, and even gas pipeline operations.

Scheduling: Scheduling continues to offer employment for operations researchers, with O.R. being used for sales forces, call centers, air traffic control, bus crewing, retail staffing, and hospital nurses.

Strategic planning: This remains an area where operations researchers offer great potential. Some large companies rely extensively on operations researchers before introducing new product lines or services. Some large and mid-size companies use O.R.-based forecasting systems to plan sales and growth. Operations researchers have also been instrumental in turning around ailing companies.

Supply chain management: SCM continues to rely heavily on operations researchers, particularly those optimizing the supply chain. Operations researchers in the field work for major software companies and consultants, as well as major manufacturers and mid-sized companies.

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