The Crucial Skill Industrial Engineers Will Need To Get Promoted

Posted on: November 3, 2014

The Unexpected Skill Industrial Engineers Need to Get Promoted

How will railroad’s demand for tank cars be affected by the U.S. shale boom? Or how can a car rental company determine the most profitable cities to position their vehicles? Today, these business problems can be answered by highly-educated and informed Industrial Engineers, leveraging terabytes of Big Data.

Industrial Engineers are inherently familiar with crunching large amounts of data. Most IE university programs are heavily data-oriented, with courses on Differential Equations, Queuing Theory statistics, and Thermodynamics. Traditional entry-level jobs for IEs involve labor time studies, supply chain modeling, and production planning. But today’s best Industrial Engineers are solving bigger, more impactful business problems leveraging the new world of Big Data.

For engineers, getting data has become easier – the advent of ERP systems made company-wide data more accessible than ever. But there is a clear shortage of experts in interpreting Big Data and applying it in problem solving. In fact, the McKinsey Global Institute forecasts that by 2018, the U.S. will have a shortage of 190,000 experts who can analyze Big Data. To fill this gap, companies like IBM and Cisco have actively lobbied universities to create Master’s programs in Analytics. This supply/demand imbalance creates a huge opportunity for savvy Industrial Engineers to craft their careers around the need for experts in Big Data applications.

What an IE can expect in Big Data:

Typical roles are not so much about logging observations on the shop floor, but instead the IE’s role will be two-fold. The first piece involves recognizing trends and correlations within the Big Data and identifying improvement opportunities. Then the findings are coupled with the more “classic” IE skills to drive process improvement. This high-level process can have huge impact across a variety of organizations (and on the Engineer’s individual career) including:

High-visibility financial improvements:

By identifying improvement opportunities in high cost and highly varied processes, Big Data Engineers can be the drivers behind substantial financial improvements for their employers. Activity based costing is the key to understanding which processes are working, and which are not. These are often high-priority projects that are visible to upper-level management, creating optics and career opportunities for the Engineer.

Engineer + Big Data = an ideal partnership:

Big Data can be an invisible “partner” to an Engineer, enabling for earlier problem identification and smarter, more effective recommendations. In an earlier project, one of our customer’s IEs compiled labor standards for a specific process. The standards held true for awhile, but over time we noticed a worsening of both cost per unit and productivity. Once digging into the Big Data, our Engineer discovered a significant change within the process: there was a product mix change. The IE could not see the mix change through observation on the floor, but Big Data identified that there were product mix anomalies that came with significant cost. In partnership, Big Data enabled our Engineer to identify the root cause and the Engineer was able to remedy the problem.

Keeping Labor Standards current:

Surprising, but it is common for companies to pay $100K on creating labor standards, only to become obsolete 3 years later. With today’s Big Data tools, IEs can easily recalibrate labor standards as often as necessary – at a cost of 90% less than traditional IE methodologies. An IE with Big Data can monitor the processes and identify incorrect standards (either too low or too high). The IE can then immediately address the issue and adjust the standard accordingly. Continuous monitoring is a fair process, keeps standards neutral, and employees are happy.

Working on High Value-Add Initiatives:

An IE’s core value to an organization is in identifying process improvement opportunities. At any given time, there are an estimated 3-4 critical, high-cost process improvement opportunities within every operation. Leveraging Big Data allows IEs to quickly identify these critical areas and where to best focus their time. Successful leadership in high value-add initiatives can make the IE the “star”, providing him/her with better visibility within the organization, more advancement opportunities and a more satisfying development path.

The key for Industrial Engineers is making Big Data something other than just MORE Data.

To learn more, we recommend: Big Data: A Revolution That Will Transform How We Live, Work, and Think and Cost & Effect: Using Integrated Cost Systems to Drive Profitability and Performance.

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