Whatever the economic circumstances and business environment - recession or growth; confident or uncertain - organisations are increasingly calling for better information handling and more informed decision taking. O.R. is an essential management tool for understanding and solving the many complex problems that face organisations nowadays.
People who work in O.R. help to manage information effectively and cope with uncertainty and provide long and short term strategies for their organisations. Opportunities for O.R. professionals have never been better. The demand for O.R. specialists and the variety of work on offer are expanding rapidly.
One of the attractions of O.R. work is its variety. For example, O.R. is contributing to the success of organisations within all of the sectors featured here. As an O.R. professional you could have the opportunity of moving around and experiencing many different business environments. In fact, the potential applications for your O.R. training will be endless.
Growth in the transport sector is often constrained by financial and environmental pressures, government restrictions and the need to maintain safety standards. The result of this is that demands often exceed the capacity of the system and there is always a need to squeeze the maximum possible out of the existing infrastructure and formulate and debate plans for future improvements.
This drive for optimising the use of existing systems and for forward planning can be helped by O.R. For example, O.R. developed techniques are all used widely by airlines and train operating companies to offer varying fares and make higher revenues by filling more seats at different prices - an O.R. technique known as Yield Management. Indeed, the very existence of the 'low fare' airlines depends on the effective use of O.R. techniques to enable them operate at a profit.
The analysis of market and consumer information is a major and rapidly growing role for O.R. in the retail sector. In supermarkets, for example, O.R. has been used to determine which shelf layouts best suit the shopping habits of customers and, so, maximise the outlet’s sales. In addition, O.R. is used in retailing to ensure that supply chains – moving goods from producer, through warehousing to branches – is managed as efficiently as possible. Data from store loyalty card schemes is also analysed by O.R. groups in a variety of ways - for example, to advise on stock holding policies and overall profitability improvement.
O.R. methods also help retailers to predict the turnover that can be achieved from new store locations - information which is used to help decide when and where new store developments should be made.Efficiency enhancements and better patient care are perennial challenges for those providing health services. For example hospital managers are always wrestling with the problem of better utilisation of operating theatres, assessing the risks posed by patients with various conditions and so on. O.R. techniques are widely used in the Health Service. For example, by using O.R., appointment systems have been designed that can substantially reduce outpatients’ waiting times whilst keeping highly qualified medical staff fully occupied.
O.R. is very active within the major banks and other financial institutions. O.R. people address a very wide range of issues from the planning and analysis of high-street customer services to organisation strategy and international finance, as well as being widely employed in Credit Risk Management - a vital area for lenders needing to ensure that they find the optimum balance of risk and revenue.
The project variety offered to those in O.R. enables them to develop a wide range of experience at an early stage in their careers. This means that, in banking as in other sectors, O.R. groups are treated as a source of talent for general management positions.
There is a demand from the very top of government for the increased use of analysis and modelling to underpin the 'Modernising Government' initiative. O.R. is seen as a key contributor assisting in the development of policies that are based on evidence and will work in practice.
This positive climate, and a successful track record, has underpinned the continuing expansion of the Government OR Service. GORS employs nearly 200 analysts in a range of government departments with the broad scope of government responsibilities being reflected in the huge variety of work.
A flavour of this is given by a selection of GORS activities: improving the effectiveness of anti-smuggling efforts, modelling the impact of performance related pay for teachers, forecasting aircraft sales, design of a speed camera experiment, analysing the risk of underwriting UK exporters, evaluation of an Inland Revenue call-centre, reducing hospital waiting times, projecting the size of the prison population and study of illicit internet usage.
O.R. people teach on a variety of university courses: undergraduate and postgraduate management degrees and diplomas, as well as the more specialist O.R. and mathematics degrees.
Staff of universities also specialise in the development of techniques and universities encourage people to pursue consultancy work for outside organisations. In addition to providing a source of income, more importantly, this work helps to strengthen the links between the academic and practical OR environments.
Specialist Research institutions, such as those in agriculture and forestry, often employ O.R. trained people. Depending on the institution’s needs, these people could be part of a small O.R. team or attached to a specialist research team.
O.R. began as part of the UK defence effort during World War II and has continued to play an important role over the years since then.
Most recently, as a consequence of the development of very fast, computer controlled, defence systems, computer modelling of attack-defence scenarios has become of paramount importance. This has led to an increased presence of O.R. people and there is a strong presence both within the Ministry of Defence and other defence research organisations.
In addition to the ‘in-house’ resource, several consultancies regularly undertake projects for the defence agencies.
Consultancy is a strong growth area in the UK and many of the British and international business consulting organisations increasingly have sections that specialise in business modelling, statistics and O.R. Consultancies tend to have a very broad client list and, therefore, their consultants tend to be involved in a wide variety of project work.
Consultancy projects are often fairly short and intensive with a particular emphasis being put on achieving an agreed timescale. There is also a requirement to deliver results which clients will consider to be value for money.
O.R. techniques have been used to develop programmes which can identify and cluster various customer types. Given the need for companies to target their marketing activities ever more finely, Database marketing has become a very important element in many companies’ marketing strategies.
Having data capture systems in place that can identify customer behaviour patterns helps companies to understand which types of customers buy what kind of products or services. The task of matching customer needs to stock holding or product development strategy then becomes very well informed.
Clearly, in an operation such as food retailing, millions of transactions can be completed each day. As the point of sale bar-code scanning technology has developed retailers are now able to capture immense volumes of sales data which, by virtue of loyalty card schemes, they are able to attribute to individual customers. Until recently, it was impossible to analyse such large databases, but new O.R. techniques have made this achievable.
By applying O.R. methods to such an immense volume of data, it is now possible to use the information to devise precisely targeted communications about products and services which are most likely to appeal to the targeted customer group. O.R. is also used in market research – for example, to model the effectiveness of advertising and promotional activity and in the complex analysis of data derived from sample surveys.
O.R. has traditionally played a significant role in helping companies to improve efficiency, reduce costs and make the most effective use of capital investment.
O.R. is commonly used to assist with plant logistics, forecasting, planning and scheduling. It also contributes to marketing, personnel and strategic planning work. The types of industry currently using O.R. are numerous and include brewing, computers, motor manufacture, aerospace, steel production and many more.
The scale of operations in such large organisations means that even a small percentage gain in performance can result in very great benefits – a crucial factor in the profit conscious environment in which service enhancements are becoming critical.
O.R. people take a lead role in working with staff at all levels to negotiate and implement working methods. Many projects involve modelling the complex operating logistics of these large operations, striving for continuous improvement.
O.R. projects in this sector can also focus on marketing, finance, personnel and strategic planning matters.