As American business moves from the industrial to the information age and global business, the most substantial and dramatic impact is on the U.S. manufacturing firm. Although the service-producing sector is expanding rapidly, the manufacturing sector must work hard to maintain and grow. Continued competition from foreign manufacturing firms at home and abroad, expanded use of technology, and increased demand for better-quality products have created other changes in what, how, and where American manufacturing is done. As a result, operations research analysts are in great demand today.
Production is the area within manufacturing that is least glamorized but most essential. It involves procuring materials to produce a product and planning and controlling the manufacturing process. Materials management is concerned with all activities in the procurement and distribution of materials needed to manufacture a product. After the materials are obtained, the production begins and after production, distribution of the product. The term operations management is used widely today to include managing the production of goods and services. Such concepts as job design, facility location, capacity planning, workforce management, inventory, and scheduling fall into this category.
The organizational structure and operations of each industry and firm vary as it produces its products. The objective is to work effectively and efficiently to assure high-quality goods and services. This article will give you a look at operations and production careers. Included is such information as:
- what jobs production personnel perform
- who employs these professionals?
- salaries and career paths
- latest trends
- job opportunities
- educational and skills needed to pursue production careers
- sources of additional information
An important position in today's companies is that of the operations research (OR) analyst, sometimes called management scientist. The OR analyst is a specialist who uses mathematical tools and computer technology to analyze business operations, methods, and products to provide information to the managers who must make sound decisions. Improving productivity is a goal of OR analysts. Areas of work include business strategy, facilities layout, inventory control, and personnel scheduling. Although work differs from industry to industry, or analysts use computerized mathematical models and a similar theoretical base to conduct analyses. Usually the operations research analyst reports to executives fairly high up in the company and deals with solutions to large, complex problems. An analyst might be responsible for planning a production schedule that keeps the cost of production and inventory low and eliminates the piling up of unfilled orders. Many college management programs offer a program in operations and production that combines operations research techniques with production knowledge. However, the work of operations research analysts is performed in all large organizations and in all functional areas, not only in production.
Production Management
Millions of goods are produced each year in the United States coordinated by production managers. The vice-president of operations and production, the regional managers, and the individual plant managers are all production managers working at different levels of responsibility. They are involved with production planning and control for the company nationwide, for a certain region, or for an individual plant, respectively. Production is the technical side of management and makes use of quantitative tools and computers to determine the material requirements for production, the most efficient way to manufacture a product, and how to control for quality. Production involves the management of personnel and the equipment they operate.
An entry-level production job for a college graduate is the line supervisor. The responsibility of the line supervisor is to oversee the people who run the machines. Many line supervisors are responsible for scheduling production runs, designing budgets, and maintaining employee relations. An individual may be moved a number of times to varied positions before advancing to manufacturing manager, head of the entire manufacturing operation.
Such staff positions as production planner might be held by upwardly mobile production management candidates. Production planners prepare production schedules for manufacturing industrial and commercial products. They may also be responsible for planning new plant layouts, projecting inventory levels, and calculating long-term expenditures for facilities and equipment.
A staff production job that a beginner might be assigned is assistant quality assurance manager. This assistant works closely with the quality assurance manager, assuming some of the responsibility for preventing product deficiencies and detecting and correcting any that do exist. The quality assurance manager and staff review a product's design requirements and often participate in the selection of materials and supplies. The manager directs sampling, inspecting, and testing operations and sets standards for the rejection of defective parts. Working as part of the quality assurance staff are engineers, technicians, and inspectors.
Materials Management
The materials manager has an important function in the production process. Basically, materials management involves having the right item, at the right place, at the right time, at a reasonable cost. This is true for manufacturers of both goods and services. The emphasis in service firms is ordering, receiving, storing, and distributing within the firm the supplies required to perform the service. In manufacturing firms, the materials management function is extended to include not only management of materials needed to produce the product, but also storing the product throughout all phases of production and in its finished form; moving the product to the shipping department; and transporting the product to distribution centers, warehouses, or directly to customers.
Responsible in many organizations for the procurement, storage, and movement of materials within the company, materials managers must be industry specialists. They keep the production manager posted on the industry's current capabilities, emerging technology, and individual suppliers and their products. The major task of materials managers is the identification of suppliers breaking significant new ground in materials and production technology. Materials and purchasing managers interact regularly with engineering and quality control professionals.
Working under the materials manager is a group of purchasing professionals. The primary purchasing functions are establishing sources of supply, getting the needed items on order, setting prices and delivery dates, and dealing with short-ages. Purchasing, though sometimes underrated, is extremely important. There are two aspects of profit-making money and reducing costs. Shrewd buying at good prices has established the purchasing manager as an integral part of the management team. The purchasing manager is responsible for establishing and enforcing purchasing department policies, forecasting supply and price trends, seeking new ideas and sources of materials, recommending that specific materials and components be used in production, and participating in new product development with respect to projected cost.
Working under the supervision of the purchasing manager are purchasing agents. Usually purchasing agents are involved both in buying personally and in supervising the buying activities of assistant purchasing agents and buyers. Depending on the size of the purchasing department, senior purchasing agents may do more or less buying and supervising. For example, in a large department, a purchasing agent may do less buying and more training, development, and supervision of subordinates.
The job of the buyer involves such responsibilities as placing orders with sup-pliers, checking the progress of overdue orders, conducting interviews with industrial salespersons to consider new materials, and keeping close contact with suppliers through correspondence, phone calls, and plant visits. The buyer must be good at cost/price analysis-that is, able to judge the fairness of a supplier's quoted price by judging what the supplier's costs are. The successful buyer maintains an effective number of sources and always has a backup supplier for necessary items. Some companies certify or qualify suppliers. To be able to take advantage of opportunities to stock up on items that may run short or they are offered at a good price, the buyer must always be aware of market conditions. Building long-term supplier relationships often assures good prices and on-time deliveries. These relationships measure the success of the buyer.
Many buyers specialize, depending on the company or industry in which they are employed. Such specialty areas include raw materials or commodity buying; production material or component buying; construction buying, which may involve negotiations, tools, spare parts, and operating supplies buying; and general-purpose buying of a wide range of materials generally of low value. These last two specialty areas are typical initial assignments and do not require the technical expertise of the other three areas.
Many start careers in purchasing in the position of expediter. The responsibility of the expediter is to see that delivery commitments made by suppliers are kept or, if delays occur, to attempt to speed the deliveries. This job, although clerical in nature, has expanded as companies are seeking to reduce time between order and delivery of materials. As expediter, a beginner has an opportunity to become familiar with most items purchased as well as who supplies them-the necessary background for advancing to an assistant buyer position.
After materials are purchased, the traffic function comes into play. The traffic manager deals mainly with securing delivery of purchased materials, including backup delivery options. In 1997 many companies had trouble shipping their products to customers because of the UPS strike. Responsibilities for overall supervision of traffic operations--which include quoting freight rates to buyers, procuring special cars and equipment for transporting materials, handling claims and adjustments on damaged shipments, routing and tracing inbound shipments, and approving transportation bills-are handled by the traffic manager. In larger companies, the traffic manager heads a separate department; in smaller companies, the traffic manager may be part of the purchasing department.
A final aspect of the materials management picture is inventory control. The inventory manager is responsible for maintaining in storage the levels of inventory necessary for the production process. Working closely with the purchasing and traffic managers, the inventory manager has an important role in seeing that materials scheduled for use are available in inventory.
Current Trends
The global economy has significantly affected American manufacturing firms. American firms are competing with low-cost, high-quality imports from other countries. American firms are opening plants abroad, improving quality control operations, and shortening the time materials remain in inventory to compete effectively in both the national and international markets. Hiring nationals in foreign operations has reduced labor costs substantially.
Technology has both eliminated and created industries and careers in manufacturing. Over the past decade, many manufacturing workers have been replaced by robots. The robotics industry itself now produces many jobs along with the fiber optics, laser, and telecommunications industries. However, the new jobs created by these industries require higher technical levels of training than the old assembly line jobs.
Technology in Manufacturing
The use of robots with computer technology has created computer-aided manufacturing (CAM) and computer-aided design (CAD). Some organizations have integrated some of the production processes with computers, termed computer-integrated manufacturing (CIM), while other organizations have the entire manufacturing process controlled and performed by computers (Flexible Manufacturing Systems). Expansion of existing systems through artificial intelligence (AI) and expert systems should continue in the future, thus changing the manufacturing function even more.
Computerization also has changed the nature of purchasing occupations but has not eliminated jobs. With less paperwork, purchasing agents and managers can spend more time on buying decisions using technology such as electronic data interchange (EDI). Computers facilitate accessing up-to-date product and price listings, maintaining desired inventory levels, processing orders, and determining when to place orders. There is a trend today toward limited-source contracting, in which purchasing agents deal with fewer suppliers, having identified those who offer the overall best quality, service, and price. Implications of these technological changes are that the nature of jobs in production and materials management will continue to change and employees will be required to develop new skills.
Reengineering and Continuous Improvement
Reengineering or process design involves investigating and changing both the tasks and activities performed by the organization and the information systems used to support these tasks. Objectives such as reducing delivery time, increasing product and service quality, enhancing customer satisfaction, and increasing revenues and profitability are all necessary to remain competitive in today's business environment. The notion of continuous improvement of processes to add value to products and services is now fundamental to planning. Continuous improvement and reengineering could result in small changes within the corporation or major restructuring of departments that would have a large impact on employees.
Total Quality Management (TQM)
Total quality management is an approach that makes a commitment to quality throughout the organization. Today, quality means the ability of a product, either a good or a service, to meet or exceed customer expectations. The International Standards Organization (ISO) has developed quality standards, called ISO 9000, that have been adopted by many organizations that are committed to buying high--quality materials and producing high-quality products and services. Corporations such as IBM are placing greater emphasis on customer needs and redesigning products and processes with the customer in mind. Nalco Chemical designed an automated sales information system to help staff answer customer questions and meet customer needs that resulted in a $14 million increase in sales.
Job Opportunities
Trends such as employment of new technologies that result in downsizing of production departments, outsourcing of aspects of operations, and limited-source contracting or reducing the number of suppliers reduce demand for production and purchasing personnel. However, a growing emphasis on efficiency and quality increases demand for operations research analysts. In fact, operations research analysts are among the fastest-growing employment groups, according to U.S. Bureau of Labor Statistics. Top managers have taken a more systematic approach to decision making and need the quantitative analyses provided by operations research analysts. Manufacturing, transportation, finance, and services industries will all create many opportunities for OR analysts as they attempt to make the productivity gains necessary to compete with growing domestic and global competition. Operations research analysts are employed in increasing numbers by local, state, and federal governments, the military, and public services as well as in the private sector. Some analysts have doctorates and work for research foundations or universities.
Because the use of computers has streamlined the work of ordering and procuring supplies, the growth in jobs for purchasers and buyers is estimated to increase. Limited source contracting reduces the amount of contact with suppliers necessary to obtain needed materials for production. Opportunities for purchasing positions occur in government agencies, hospitals, and educational institutions, but over half of the opportunities occur in manufacturing industries. Half of all purchasing agents work in small departments with fewer than five employees. Greatest demand will be for materials managers with M.B.A.s and business, science, or engineering graduates with a couple of courses in purchasing. Graduates of two-year programs will find job opportunities limited to small firms. Especially high demand will be for individuals with technical backgrounds to work in companies that manufacture complex items such as industrial engines and electronics equipment.
The demand for industrial production managers is expected to decline by 7 percent. Although manufacturing is currently experiencing growth, downsizing of management and the efficiency of new technology is reducing the need for production managers. Opportunities will be greatest for those with degrees in industrial engineering or business.
An area in which demand is strong and continuous is quality assurance. The use of increasingly complex products and production methods, combined with ever more stringent government regulations, has contributed to the growth in job opportunities in the area of quality assurance.
Equal Opportunities
Opportunities in operations research, production management, and materials management are expected to increase for women and members of minority racial or ethnic groups. Because less physical strength is needed with the newer technologies, more production opportunities are expected for women. For minorities, their opportunities depend on obtaining training or retraining to compete for new positions. The great demand for operations research analysts will assure opportunities for all who qualify.
Aptitudes and Attributes for Success
Education: The areas of operations research, production and materials management are highly technical in nature and require strong backgrounds in mathematics and computer science. Most employers require a degree in business or engineering with expertise in the new technologies. Information systems including organization analysis and planning, work measurement and standards, and work simplification are desirable. A production planner may be selected from manufacturing, engineering, and machine shop departments. Usually on-the-job training is available.
In the area of quality assurance, an associate degree is a good background for a position as quality assurance technician or inspector. Movement into management requires additional education. Usually requirements for advancement to quality assurance manager are an undergraduate degree in engineering or science and an M.B.A. Also acceptable is a business undergraduate degree with courses in science. Industrial experience is always required. Critical to the effectiveness of a quality assurance manager is the ability to work with all levels of personnel from the production worker to the top executive.
The minimum education for those interested in operations research is a bachelor's degree in math, engineering, operations research, or economics. Several math courses above calculus as well as knowledge of probability theory, statistics, and computers are required. An excellent background for a position as operations research analyst in private industry is a bachelor's degree in math and an M.B.A.
A four-year college degree is not necessary, however, for entry into purchasing careers. A high school graduate may be hired in a clerical or stockroom position and move into purchasing work as the employee gains knowledge and experience. Smaller companies readily hire graduates with associate degrees for entry-level purchasing jobs, but for movement into management, a bachelor's degree is important regardless of the size of the company.
Personal Characteristics: To be a successful operations research analyst requires some unique skills and attributes. Included are the abilities to:
- think logically
- be creative
- formulate problems
- identify stumbling blocks in a project
- find available resources
- recognize restrictions
- communicate mathematical results to others
Certification: Two certification programs exist for purchasing professionals today. For those in private industry, the certified purchasing manager (CPM) certificate is conferred by the National Association of Purchasing Management. The certified purchasing professional (CPP) and the certified purchasing executive (CPE) are conferred by the American Purchasing Society. For those in public purchasing, the certified professional public buyer (CPPB) and the certified public purchasing officer (CPPO) designations are conferred by the National Institute of Governmental Purchasing, Inc. For all of the above designations, applicants must pass exams and acquire experience in purchasing. Formal courses are offered by local association groups and many colleges to help individuals prepare for the exams.
Career Development and Compensation
Advancement is possible in all areas of operations and production for those with drive, ability, and the proper educational background. In manufacturing firms, operations is considered the most critical function. Operations managers earn excellent salaries and have a good shot at the chief executive position. The vice-president of operations is one step from the top. Figure 7-1 shows how operations and production in a manufacturing firm might be organized.
Today, advancement and salary within operations are determined not only by the ability to make critical decisions, but also by technical knowledge and experience. Many of the critical decisions involve using technology, such as robots, in the production process. Also, much of the information used by production personnel to monitor the production process is available via computer and telecommunications systems. The greater technical expertise operations managers have, the greater their value to their organization.
Depending on the degree of importance placed on materials and the way the firm is structured, materials management may offer job mobility. Some firms may assign a vice president of materials who functions at the same level as the production vice president. Because of the growing importance of the purchasing function and the necessary role of the materials manager in market forecasting, production planning, and inventory control, the materials orientation in firms has increased.
To advance from purchasing to materials management, an individual must gain a deeper knowledge of the operations of other departments and be proficient in the use of computers and quantitative techniques. This necessary knowledge makes manufacturing line managers and quality assurance specialists viable candidates for a move into the key materials management slot. The quality assurance manager usually has spent a number of years in supervision at a lower level to gain the experience in administration and planning needed to advance to the position of manager.
The greater emphasis on strategic planning and critical decision making in manufacturing firms, coupled with advanced technology, have catapulted the operations research analyst into a position of major importance. Starting salaries for research analysts range from about $35,000 to $45,000 a year. Top operations research analysts in large corporations can earn as much as $ 100,000 a year. Greater recognition, greater salary, greater risks, and greater opportunity to move into top management positions are all characteristics of positions in operations research. On average, experienced production managers earn about $65,000. In addition, they receive bonuses. The average salary for experienced purchasers is $30,000.
Sources of Additional Information
There is much information available through the many organizations for operations, production, and materials management professionals. Listed here are the names and addresses of organizations to which you may write for career information. For careers in production planning, write:
American Production and Inventory Control Society, VA 22046
National Association of Manufacturers, Washington, DC 20004
For careers in quality assurance, write:
American Society for Quality Control, Milwaukee, WI 53201-3005
For careers in physical distribution, write:
Council of Logistics Management, 2803 Oak Brook, IL 60521
For careers in operations research, write:
Institute of Management Sciences, 290 Westminster Street Providence, RI02903
Mathematical Association of America, Washington, DC 20036
Operations Research Society of America Mount Royal & Guilford Avenues Baltimore, MD 21202
Society for Industrial and Applied Mathematics, Philadelphia, PA 19104-2688
For careers in purchasing, write the following:
National Association of Purchasing Management, Tempe, AZ 85285-2160
National Association of State Purchasing Officials, c/o the Spieled Group, Lexington, KY 40507
National Institute of Governmental Purchasing, Reston, VA 22091-5302
