International OR
As the wORld turns
State of the profession: Global survey reflects universal concerns countered by an optimizer's optimism for the future
By Andres Weintraub and Peter Horner
Different customs and cultures impact the way operations research is taught and practiced around the world, but commonalities always seem to dominate any international discussion of the state of the profession. For example, U.S.-based INFORMS, under the leadership of President Tom Cook, recently launched a significant effort to market the profession, continuing an age-old discussion on the best way to brand it. "Operations research," "management science" or some combination of the two — or other alternatives such as "decision sciences" — have been discussed for years. The same "name game" is going on to some degree among other OR societies in dozens of other countries.
On the academic side, INFORMS is rightly concerned about the significant decrease in OR courses, particularly in business schools, as well as the increasing fuzziness on how and where OR is taught in the United States — a concern that is shared by many members of the International Federation of Operational Research Societies (IFORS).
On the practice side, while OR approaches and techniques have been extremely successful in many areas as the articles in this special issue will attest, their use is often diffused, regardless of the country in question. Spreadsheet users, for example, are often not aware they are using linear programming; in most firms, OR is carried out by other functional units.
Of course, all members of the international OR community have a vested interest in the perceived future of their chosen profession.
Given these important issues, we thought it would be useful to compare and contrast the state of the profession from a worldwide perspective. We sent a short, four-question survey to prominent OR practitioners and professors from more than a dozen countries.
The individuals who responded by the deadline included David Ryan of New Zealand, Graham Rand of the United Kingdom, Xiang-Sun Zhang of China, Mikael Rönnqvist of Sweden, Goutam Dutta of India, Hans Ittmann of South Africa, Paolo Toth of Italy, and Thomas Liebling and Dominique de Werra of Switzerland (see box).
While the opinions that follow are those of the individuals based on their unique experiences and perspectives, together they paint a "worldly" picture of OR that reflects universal concerns countered by an optimizer's optimism for the future.
1. In your country, are OR tools being used in industry? In government? Describe some significant successes or failures.
Based on our unscientific but revealing survey, it's safe to say that OR is "widely used" (the phrase showed up in many of the responses) throughout the world. Success stories are plentiful. Failures are less common, perhaps because, as one panelist noted, practitioners are reluctant to discuss them. When failures have occurred, implementation snafus rather than the solution itself tended to cause the downfall, according to our panelists.
Graham Rand, United Kingdom: OR is widely used in industry and in government. The Operational Research Society has a high proportion of practitioners in its membership. There has been a shift in recent years to OR employment in consultancies, rather than in internal OR groups.
Xiang-Sun Zhang, China: OR theory and techniques have been widely applied in industry, agriculture and military, as well as in the government. The OR Society of China (ORSC) has a chapter, the Daqing branch, consisting of more than 200 members who are working in the oil industry.
OR/MS Today reported on an OR project ["Prediction for China Grain Output," October 1998] that is sponsored by the Academy of Mathematics and System Sciences within the Chinese Academy of Sciences, home to the most prestigious OR team in China. This project is still running and submits the annual grain output prediction report to the Chinese government in early May. An extension of the typical OR technique, the project employs input-output analysis and minimum sum of absolute value treatment to arrive at its forecasts. The prediction provides the government with an important reference to arrange grain consumption, storage, import and export. The study was awarded the first-place prize in the "OR in Development" competition at the IFORS Triennial Conference in Beijing in 1999.
David Ryan, New Zealand: OR tools are being used in both industry and government in New Zealand. Applications of OR techniques can be found in telecommunications, in rostering of Customs and Immigration staff at Auckland International Airport, in many aspects of crew scheduling for Air New Zealand, in the operations of the electricity market, in many applications in the forestry industry and the dairy industry.
One failure (at least so far) has been in a manufacturing application where the OR tools are still to be implemented in production. We have also not been successful in the railways industry despite some significant effort.
Paolo Toth, Italy: OR tools are used both in the private and in the public sector in Italy. Some significant successes follow (of course, the list is not exhaustive). Possible failures could have occurred, but I am not aware of them.
Successes:
- material flow management (FIAT),
- automatic cloth cutting (several textile companies),
- waste management (several municipalities),
- fleet management (several mass transit companies, Ferrovie dello Stato the Italian Railway company),
- management of clinical laboratories (several hospitals),
- organization of Roma Jubilee 2000,
- freight distribution (different packages used by several companies),
- crew planning (several mass transit companies, Alitalia, Meridiana, Ferrovie dello Stato),
- management of urban traffic networks (several municipalities),
- bus and train timetabling (several mass transit companies, Ferrovie dello Stato),
- air traffic management (several airports), and
- staff scheduling (several hospitals, call centers, etc.).
Although there is an increasing and growing use of OR tools (especially in industry), it is nowhere near satisfactory. As operations research practitioners, we face an enormous task in promoting the continuing use of OR and, in a sense, educating managers and decision-makers about the value of this discipline. The problem is not so much within large corporations and companies but rather within medium- and small-sized companies.
During the apartheid years, South Africa experienced a protected economic environment. After 1994, things have opened up, and large organizations, wanting to compete in the world market, are realizing the value of OR in assisting them to become more competitive.
Within government, we have a unique situation in South Africa. Since 1994, when the new democratically elected government came into power, most of our government officials have been replaced by new, inexperienced officials at all levels — national, provincial and local. This has impacted not only the use of OR tools, but also all modern and sophisticated tools. The reality is that the new cadre of officials first needed to understand the intricacies of their new environments before they could venture into using modern tools to assist and support their decision-making. The lack of communication and continuity within the ranks of government officials further complicates matters.
It is almost impossible to give a comprehensive impression of the use of OR in industry and government. A few examples will highlight what is happening currently. SASOL, one of the large petroleum and chemical companies in South Africa, is a big user of simulation (the ARENA simulation package) as well as optimization (PIMS, the LP package that has been developed specifically for the chemical industry).
CAPS Logistics has been used successfully within three larger South African organizations — SPOORNET (railway company), ABI (cold drink company) and AFROX (gas company).
In the logistics and supply chain management area, simulation packages are widely used along with products from Roadshow, Manugistics, i2 and others. South African Airlines has acquired the revenue management package, PROS.
Within government, OR has been used mostly in the defense area. The South Africa National Defense Force (SANDF, winner of the 1996 Franz Edelman Award for Management Science Achievement), has a very strong war-gaming capability that is utilized extensively and is continuously enhanced and upgraded. A modeling and simulation group within the CSIR's Defense Technology unit serves the SANDF, while the Institute for Maritime Technology provides OR services to the Naval branch of the SANDF.
CSIR has done extensive work in the area of crime prevention in recent years for the South African Police Services and the Department of Justice. The type of work has been a combination of modeling, simulation, statistical analysis linked to GIS to improve the use of crime statistics, crime pattern analysis and crime mapping, as well as addressing the issue of court services throughout the country.
Goutam Dutta, India: OR tools are certainly used in India, in both industry and the government. Successes include Tata Steel (which won the 1994 Franz Edelman Prize for its work on optimal energy distributions in a steel plant), applications at Mudra Communications and Indian Railways, and the gas distribution problem in South India. All of these cases appeared in Interfaces.
As for failures, a $65,000 study by the Bombay Metropolitan Regional Development Authority demonstrated a means to reduce congestion on suburban trains, yet it was never implemented. On perhaps an even grander scale, the head of the OR group at Tata Steel (the first Asian company and first steel company to win the Edelman) was forced to leave based on the recommendation of a major consulting company. The OR group still exists, but it is not as active as it was earlier.
Mikael Rönnqvist, Sweden: OR is used both in industry and government in Sweden. OR tools are used in airline crew scheduling, airline design, telecommunication, forestry, transportation companies, traffic analysis and planning, mechanical design, staff planning and production systems. Companies developing business systems or larger consulting organizations are including more OR modeling capabilities as well as customized solutions using optimization software. Companies generally have a few skilled persons responsible for OR development, or they outsource this to other organizations or companies for specific projects.
One example of a successful company using OR is Carmen Systems, a company that develops systems for staff and operational planning in the airline and railway industries. A problem or failure is that insufficient communication between OR researchers and industrial/business people sometimes results in a "no go" for promising industrial projects.
Thomas Liebling and Dominique de Werra, Switzerland: OR is well-established in Swiss industry, government and academia. Most large firms have a division in charge of planning at a strategic or an operational level where OR plays a key role. This is true in particular for transportation companies (trains, buses, airplanes and even boats) as well as for postal services and telecom. Many companies routinely use production planning and scheduling (timetabling) software based on classical and/or original OR techniques.
While in the past many large companies (hydro-electrical plants, pharmaceutical, food and machine industry) had their own OR groups, many of these have been outsourced. Some of the ensuing (and successful) consulting companies have become important employers of OR specialists.
Another traditional user of OR methods has been the Army, which used to have its own OR staff, along with soldiers (chosen among civilian OR specialists) doing their annual military service in OR. The professional OR group is now outsourced, while the soldiers continue to work with the models, such as simulation applications developed by spinoffs.
One should also observe that today OR techniques are so well-established and their use has become so standard that people do not always realize that these were originally developed as OR methods (linear programming and simulation are notorious examples of this phenomenon).
2. Is OR being taught in undergraduate programs? In graduate programs? Under which department is it usually covered: engineering, mathematics, computer science, business administration, others?
Even within individual countries, OR is literally all over the map when it comes to higher education. Graduate and undergraduate OR courses crop up in dozens of different departments. While our survey indicates that OR courses are generally more plentiful in engineering departments than, say, business schools, the overall demand for the subject at the university level appears to be holding steady.
Graham Rand, United Kingdom: OR is taught at undergraduate level in most of the U.K.'s 100 or so universities. However, in most cases this consists of one or two modules, often under the mathematics umbrella. Nevertheless, there are significant degree schemes in operational research at several universities. At the postgraduate level, the standard one-year master's of science course, which includes a three- to four-month, client-based project, is offered by eight or nine universities and is usually supported by the government via a research council. The postgraduate courses are usually taught in management schools, in departments of management science.
Xiang-Sun Zhang, China: The answer to this question depends on the definition of "OR courses." Courses about OR mathematics/fundamental tools such as linear programming, nonlinear programming, graph theory, combinatorial optimization, queuing theory, etc., are quite popular in undergraduate programs in departments of applied mathematics, computer science, business administration, management science, transportation management and so on. The few general OR course books mainly introduce various OR practice cases in China.
China has 17 universities that offer Ph.D. programs for OR, and 50 universities that have a master's degree program in OR. In addition, graduate programs in management science and engineering, system engineering, transportation planning and management are all closely related to OR. For example, 39 universities offer Ph.D. programs for management science and engineering, and 113 universities have master's degree programs in this field.
David Ryan, New Zealand: There are strong undergraduate programs in OR at four of the seven universities in New Zealand. One program is in engineering and the other three programs are in business schools. In the engineering-based program and one of the business-based programs, there are also links to mathematics and statistics departments.
Paolo Toth, Italy: OR is taught in undergraduate, graduate and Ph.D. programs. The majority of the courses are delivered in engineering, followed (in this order) by computer science, business administration, statistics and mathematics.
Hans W. Ittmann, South Africa: In South Africa, higher educational institutions consist mainly of universities and technicons. In both cases, we still sit with "creations" of the past. One needs to take this into account. There are still what is referred to as historically disadvantaged institutions (HDIs) among both the universities and the technicons. OR is taught mainly at previously advantaged institutions or the so-called "white" institutions. Social changes and school consolidations, however, are altering this environment.
Of those universities that offer OR courses, the subject is generally taught at both the undergraduate and graduate level. At the undergraduate level, courses are referred to by several names, including operations research, quantitative methods, optimization, simulation, decision theory, game theory, stochastic processes and linear programming. Universities use either the discipline name, a catch-all phrase (such as optimization) or the specific technique. There is no consistency, and it differs from institution to institution. What is offered at a university is also dependent on the interest of the university personnel.
At the undergraduate level, one can obtain degrees in operations research or quantitative management, although in most instances the specialization only occurs during the graduate programs. At the graduate level, most of the institutions where OR is taught offer programs in operations research and students can obtain post graduate degrees in operations research. A first degree in South Africa typically takes three years, and the fourth year is an honors year after which a student can earn a master's degree. The later two are considered graduate or post-graduate degrees, leading to B.Sc. Hons. and M.Sc. degrees in operations research.
The departments that offer OR courses vary considerably from institution to institution. At the University of Cape Town, the department of statistical sciences offers the OR course. At the University of Stellenbosch, several departments offer OR courses including applied mathematics, the department of logistics within the faculty of economic and management sciences, industrial engineering and the business school. At the two-campus University of Natal, OR is offered by the School of Mathematics, Statistics and Information Technology at one campus and at the School of Mathematical and Statistical Sciences at the other campus. At the University of the North (an HDI), one finds OR together with mathematics, applied mathematics, computer science and statistics within the School of Computational and Mathematical Sciences. From these examples, it is clear that there is huge variability in how and where OR is taught in South Africa.
Goutam Dutta, India: OR is taught in both undergraduate and post-graduate programs. The University of Delhi has a department of operations research. OR is part of the curriculum in engineering, mathematics, computer science and business administration at many universities. At the Institute of Chartered Accountants of India (equivalent to CPA), students have to pass a final examination with eight subjects. OR used to constitute half of the compulsory courses. In the revised syllabus, OR still constitutes about 50 percent of costing.
Mikael Rönnqvist, Sweden: OR is taught at all major universities although there is a big difference between the number of students attending. As an example, at Linkoping University where the OR group is large, there are more than 20 undergraduate courses involving between 1,000 to 1,500 students each year. At other universities, there are often smaller groups offering a variety in OR courses. In addition, many groups that focus on logistics, production economics and computer science have large components of OR within the courses or programs.
Graduate programs in OR areas are offered at the main universities. Most OR courses are taught at engineering departments that traditionally have been strong in Sweden. The strongest OR content is generally aimed at industrial engineers with a focus on management and business. Many of the OR courses have close links to departments such as mathematics, computer science, economics, mechanical, statistics and electrical engineering.
Thomas Liebling and Dominique de Werra, Switzerland: OR is taught at both undergraduate and graduate levels in most Swiss institutions of higher education. At the Swiss Federal Institutes of Technology (EPFL in Lausanne and ETHZ in Zürich), OR is a compulsory subject in most engineering curricula. At both EPFL and ETHZ the graduate OR program is mainly within mathematics, but with strong links to computer science, communication systems, electrical and industrial engineering, logistics and technology management.
At the graduate level, several programs are offered to Ph.D. students in particular; such programs are most often organized with foreign academic partners. EPFL and ETHZ have strong links to other European universities in OR research and education, mainly in combinatorial optimization. These connections have been extremely useful in setting up international OR programs.
In other Swiss universities, OR is generally to be found in the economics, computer science or business administration faculties. Most Swiss universities have consulting groups in OR that also provide their students with applied projects. These are very popular and cover areas ranging from logistics to applications in medicine, the life sciences and engineering design optimization.
OR is also taught at the newly upgraded engineering colleges. Often their graduates are the ones who implement vehicle routing, scheduling, MRP and other OR techniques in small- and mid-sized Swiss companies.
3. Is the discipline generally known as "operations research" (OR) in your country, or is it known by some other name, such as "decision sciences," "operations management," etc. Are other names more recognized or more prestigious than operations research?
Like the ongoing branding effort now underway in INFORMS, the worldwide OR community has played its share of "Name that Profession." When the dust finally settles, "operations research" or "operational research" usually end up on top, although there are signs that more descriptive monikers are gaining support. One of our panelists, no doubt weary of the name game, said, "Who cares about the name of the horse as long as it runs fast?"
Graham Rand, United Kingdom: It is usually known as operational research or management science in universities, and operational research or business analysis in industry, OR in government, and operational analysis in defense. In industry it is frequently integrated into a functional department, e.g. financial services, marketing.
Xiang-Sun Zhang, China: Operations research is still the most prestigious name for this discipline since the State Committee of Education uses OR as one of the Ph.D. program's titles. But many people may not clearly know the difference between OR and several other terms. System analysis, optimization, even management science are all often used by the public media. Recently, "logistics" has become more recognized by the government, industry and other economic sectors. Many OR people enter this area.
David Ryan, New Zealand: The discipline is generally known as operations research or operational research.
Paolo Toth, Italy: The discipline is generally known as ricerca operativa (operations research). The name is well-recognized in the academic world. In the industrial world, other names such as decision science, management science or optimization techniques are perhaps more recognized.
Hans W. Ittmann, South Africa: The operations research fraternity has formally organized itself within the Operations Research Society of South Africa. There have been a number of attempts in the past to reconsider the name, but after long (and emotionally loaded) discussions, no consensus could be reached on an alternative. A small survey of colleagues regarding the branding issue produced several interesting responses. Some call themselves "operations researchers," but others use a description to explain what they do, such as "using mathematical models to solve problems." In my own case, when someone asks me what I do, I instinctively cannot resist saying that I'm an operations researcher. Invariably, I have to then go into a long explanation of what this thing called OR is.
It is interesting to note that not one of the university departments that offer OR have the words "operations research" featured in their name. At the University of South Africa, which has the largest OR department in the country, the department is called quantitative management. At the CSIR, our own group is now called Decision Support Services, whereas OR was featured in the name up until about 10 years ago. Again, this is a difficult issue, and there is no clear indication of a preferred term or name. People use whatever they feel comfortable with. What is clear is that the term "operations research" does create problems.
Goutam Dutta, India: In the engineering schools, it is known as OR. In the business schools, it is known as some combination of QT/OR/OM/decision sciences. Who cares about the name of the horse as long as it runs fast?
Mikael Rönnqvist, Sweden: There is no group that calls itself an OR group. Instead, they are known as optimization, logistics, production, computer science, design, optimal control or management groups. All of these groups recognize the "operations research" content of their programs, but they have a more precise name depending on the undergraduate programs they offer or are heavily involved within.
Thomas Liebling and Dominique de Werra, Switzerland: The discipline is certainly better known under other names like operations management, decision aid methods or logistics, names close to the latter probably being the most popular at present. The lack of a nice denomination — from which the field seems to be suffering since its inception — in a way reflects its traditional "catalyzing" nature. Indeed, OR has played a pioneering role for the last 50 years, in Switzerland as much as elsewhere, in making computers become the powerful decision aid tools they are today.
OR has survived many short-lived denominations with a "systemic" flavor that were fashionable in their time. In spite of its seemingly awkward name, after more than 50 years, OR is still well and alive; in fact, it is going through an expansion phase due to the many fields of application arising in the new technologies and in the life sciences.
4. How do you visualize the future of OR in your country? Is it growing and gaining acceptability? Is it declining or becoming diffused in other disciplines? Or has it never taken off?
"Guardedly optimistic optimizers" probably describes the global community of operations researchers as they look to the future. Almost without exception, our panelists see bigger and better things for OR in their respective countries as the tools of the trade continue to permeate throughout society. At the same time, many voice concern that the profession might lose its identity even as its often-hidden successes continue to mount.
Graham Rand, United Kingdom: Acceptability is high, and I suspect it is holding ground, though the name itself may be less frequently used. The demand for OR master's graduates is high, but they do not always join "OR" groups. Usage of quantitative analysis appears to be increasing. There are several current "hot spots" — financial services (credit and risk management), transport, defense, communications and logistics.
Xiang-Sun Zhang, China: One of the reasons that OR has been widely recognized is that OR has developed very powerful and systematic tools and philosophy. As a result, OR inevitably penetrates into related areas. It is hard to say that this marks a decline of OR.
I am quite optimistic about the future of OR in China. The history of modern OR in China is not so long as in the Western counties. Our industry and the market are still in the premature stage of OR application, so there is a great potential to extend the OR education and application. From this point of view, China needs the experience and expertise from the developed countries.
David Ryan, New Zealand: I believe the future is excellent. Many of our success stories have received positive publicity and there is a focus on practical applications within the OR programs within the universities.
Paolo Toth, Italy: In my view the future of OR in Italy is globally good. In the universities, several OR courses are inserted in undergraduate and graduate programs, and several new positions (mainly as full and associate professors) have been recently established. The OR courses are attended by many students, and several dissertations are discussed in the OR area. Many young researchers participate in the OR schools and conferences. So from the academic and research points of view the future is quite good. In the industries, many OR groups have been merged with "information technology" groups, thus losing their OR identification, although they continue to perform OR activities. Few (but strong) groups perform applied research in the industries.
Hans W. Ittmann, South Africa: Personally, I am very optimistic about the future of OR in South Africa. This I base mainly on the fact that OR techniques, the OR approach and the general philosophy of OR is permeating throughout our society. More and more people in industry, in government, in small, medium and micro enterprises, non-governmental organizations, etc., are being exposed to OR in one way or another. It may not be in a recognizable form of operations research per se, and those exposed to it and using it may not be aware that it is OR, but if you really look at what it is they are doing, it is OR! For example, linear programming, possibly the most frequently used technique in OR, is taught at secondary school in South Africa.
Many OR techniques are now available in standard software packages. Admittedly, one is not always sure that the packages are utilized correctly, or that results obtained from the software packages are interpreted correctly or used correctly. The OR fraternity faces major challenges to rectify the situation.
I am nevertheless continually amazed at what companies are doing in terms of optimization, simulation, etc., but it is not under the banner of OR. Counterbalancing this optimism, it must be noted that the OR Society has experienced a decrease in membership numbers in recent years. The reasons are numerous, and the concern is real. Even more troubling, few young people are joining the Society and the ones who do are generally not active members.
Goutam Dutta, India: In spite of some outstanding successes, OR has never really taken off in corporate India. I think blame is primarily with the OR teachers, who consider it an extension of mathematics, and management teachers, who never teach anything beyond formulation and solution. The fact that implementation is the most important part of real-world problems has not been recognized by the management teachers in India.
However, things are going to change. There is growing realization in the Indian corporate sector that highly talented and mathematically trained personnel are an asset to the company. A major private oil company is hiring Ph.D.s in OR. Nachiket Mor, executive director of ICICI Bank, stressed the need for highly skilled personnel in quantitative modeling. The National Stock Exchange in Mamba has a small group working on OR problems. The Federal Reserve Bank of India now requires credit rating and modeling for all other banks.
Mikael Rönnqvist, Sweden: The use of OR is increasing in industry as well as academia. In industry, we see an increased use of advanced systems for production, staffing, transportation, routing, manufacturing, scheduling and process control where operations research or optimization plays an important role. There is a risk, however, that system developers at IT departments with no OR background do not include OR tools early (or not at all) in the design process.
At universities, the number of OR courses and students attending seems to be increasing. Also, other close disciplines such as statistics, optimal control and computer sciences are growing and their use of OR tools such as modeling, optimization or statistics is substantial.
The Swedish OR Society, unfortunately, attracts few members. On the other hand, there are other organizations (within the Nordic countries) that are more active with conferences, courses and workshops that attract more people. There is a need to coordinate these in order to promote the OR field. Overall, I believe that there are great opportunities for OR applications in Sweden.
Thomas Liebling and Dominique de Werra, Switzerland: Switzerland has an active OR association (SVOR/ASRO) that organizes courses and meetings where new developments and potential applications are discussed; a special effort is made to attract young members such as recently graduated students. One out of every 50,000 people living here is a SVOR/ASRO member.
One should also underline the strong interplay and even overlap between OR and its neighboring disciplines such as mathematical programming, discrete mathematics, theoretical computer science, statistics and automatic control theory. All of these areas are largely concerned with modeling, optimization and simulation, and as a consequence it is not infrequent to find the OR specialists in the corresponding academic positions.
Clearly, OR techniques as such will certainly continue to be needed in the industrial and economic environment of the country. While it is not certain that the name operations research as such will remain as the chosen one, most engineers will have been exposed to courses in OR during their studies or thereafter, so that they will be aware of the use of mathematical techniques for handling decision problems or even large and complex optimization problems in engineering, particularly in the new technologies. By now many former students with an OR background have joined large companies and consulting firms where some have reached top-level executive positions. All recognize that their basic training in OR gave them an excellent preparation to handle the many problems involving technical as well as human aspects they are facing every day.
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Andres Weintraub is a professor in the department of industrial engineering at the University of Chile. A vice president of INFORMS (Education and Outreach), Weintraub is a past president of the International Federation of Operational Research Societies. Peter Horner is the editor of OR/MS Today.
OR/MS Today copyright © 2003 by the Institute for Operations Research and the Management Sciences. All rights reserved.
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