Tuesday, September 24, 2013

Looking for a great return on investment?

Hire an Industrial Engineer

By Joni Newkirk - CEO, Integrated Insight

Many large companies such as UPS, Amazon, Ford and Disney rely on a pool of Industrial Engineers (IEs) to ensure complex systems work efficiently.  The term itself may lead you to believe the IE’s work is limited to industrial environments, but nothing could be further from the truth.  Today, IEs can be found in just about every industry and supporting many disciplines from operations to finance to information technology, and even sales and marketing.   While the Industrial Engineering or Operations Research discipline is typically perceived as a cost cutting measure, those who leverage IEs effectively know they can just as easily be the catalyst for improved revenue as well.   Ensuring decisions that impact costs do not negatively impact revenue and vice versa - understanding the impact of revenue decisions on costs -  is critical to maximizing profits. 

Industrial Engineers solve problems, often times problems you didn’t even know you had, but your customers may suffer through daily.  They have a knack for looking at a system or process and figuring out how it can be done better, typically leading to improved product or service quality, and profit.   Leveraging a skill set that includes statistics, human factors engineering, operations research, economics and management, IEs have the ability to view the organization holistically.  I have found them particularly effective in solving cross-functional or inter-divisional issues where the proverbial ball is often dropped and improvements are not only harder to identify, but often difficult to fix.  Not surprising, Industrial Engineers are often tapped for management and more than a few Fortune 500 companies have IEs in top executive positions including Mike Duke, CEO of Walmart and Tim Cook, CEO of Apple.

Leveraging the talent of an IE is advised for any organization interested in optimal use of resources.   With an average starting salary and benefits of $100K-$120K, an Industrial Engineer with strong management support and access to people and processes within an organization can easily pay back the investment multiple times year over year.  Small businesses as well as larger organizations would benefit from the versatile skills and breadth of experience IEs bring.  Consider the following:
  •  For a company like Six Flags that generates $1.07 billion in revenue with a 20% margin, a 1 percentage point improvement in margin is worth approximately $11M, or a 5% improvement in the bottom line.
  • In a company like FedEx, with $42 billion in revenue and where labor comprises almost 40% of total operating expenses, a 1% reduction in labor cost would be worth $161 million, an 8% increase in net income.
  •  A 50-unit chain restaurant with 200-seat venues and an $18 average check that can reduce table turn time and increase covers through improved ordering and kitchen processes, will yield $3 million in increased revenue for each minute of improvement.
Let your next hire be an Industrial Engineer.   Money-back guarantee.

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