1. M: Everyone here in the room has personal work challenges. And each of us faces a unique set of work issues. I thought it would be interesting to spend just a little time finding out what these OR luminaries consider as challenges. I know they’ll be honest with us. Let’s start with Brian, our business college dean. Some of the people in the audience are also academics and will probably empathize with your problems. (BRIAN) For one, the sudden change in top management and the current review process of strategies from bottom up. That’s been slightly unsettling. Also, as dean, I need to work, and manage, both downwards and upwards, people with different wants and needs. Then there are various systems being used in the university – there’s no synchronization. For example: one office uses bar codes for tracking documents but other offices don’t.
2. M: Wilson has been in and around government for the better part of his professional life. Wilson, what had been the major challenges in your government and semi-government work? (WILSON) I’m challenged by incoherent and uncoordinated policy decisions. There’s also the inherent conflicts, whether it’s between labor and capital, or between landowners and tenants. Of course, there’s the politics in nearly everything government does. Then there’s the thick-faced bureaucracy. And the greed and corruption.
3. M: What about our OR consultant, Vic? What are your unique work challenges? (VIC) As an OR practitioner in the Philippines, the most challenging task is getting management “buy-in” to the techniques and capabilities of OR. Keep in mind, most of the people I sell to in top management are not familiar with OR methods. So the challenge is to explain to them in layman’s terms why, for example, optimization and simulation can help streamline their supply chain without using complicated equations. The other challenge is for me to learn how to utilize all these free, open source resources in projects where OR is appropriate. You may not realize it but most of the OR resources needed for even large scale projects are available from the internet without any cost.
4. M: What about you, Elise? What had been your challenges as head of San Miguel’s OR? And now as a lead consultant for ORSP’s government outreach program CORPS?
ELISE: As a consultant, I find the task of getting to the client’s real problem the most challenging and key to delivering results that can create a difference. I have learned over the years how important it is to distinguish symptoms from the real problems. In this regard, what has changed are not the concerns of the client, but the methodologies that are available. I am a believer of the saying “a problem understood is a problem half-solved.” I found its usefulness in the course of my consulting work with the government. Also, with the great strides in computing power available even to laptops, with new non-linear optimization tools, with new methodologies coming out all the time, I’m challenged to keep updated. As an analyst I never realized that the spreadsheets could be used to solve OR problems. When I was a young analyst, I did not hear of DEA, genetic algorithms, the tabu search, or problem structuring methods. It’s like being on a treadmill – you have to keep running to stay in place.
B. OR use in the private and public sectors
1. M: Let’s ask Vic – is OR playing a role in Philippine commerce and industry? If so, which sectors do you know personally through your consulting work are actually using OR?
VIC: OR is indeed playing a role in local business. I am familiar with product companies using OR to optimize their supply chain, banks using OR to optimize their portfolios, and insurance companies trying to manage, optimize and balance their assets to make sure that they have sufficient funds to pay future liabilities.
2. M: What about you, Elise? You spent nearly 20 years in the country’s largest diversified conglomerate as the OR advocate and internal consultant. In which business function do you think OR has made the biggest headway?
ELISE: One just needs to look at all the available ERP software, those with “OR inside” to realize that majority of OR applications for business is in logistics – getting the goods where it is needed at the right time of the right quantities.
3. M: Still with you, Elise. San Miguel, under the Sorianos, was one of the first conglomerates to put up its own OR department, way back in the 70s and 80s. Clearly, as early as then, there was already appreciation for the potential contribution of OR to solving business problems. Was that the start of a huge wave that has now reached critical mass in the business community? Or did that represent the peak of OR popularity and things have gone downhill in the two decades since? Or, has it been a case of fits and starts?
ELISE: Since the 80s, a handful of OR departments have been put up but some had been disbanded. It’s now 2010 and yet in the ORSP, we see only eight companies having a dedicated group doing OR work. Obviously, notwithstanding the benefits that OR offers its users, its adoption in Philippine companies has been underwhelming.
4. M: Leaving business aside, let’s talk about OR in government. No, that’s not an oxymoron, although the audience will be forgiven for thinking that. I had previous discussions with the panelists on the issue and their overwhelming answer is – no, with very few exceptions, analytics has not been successfully used in government. So let me ask the panelists then – where could OR be theoretically used in the public sector? Let’s start with Wilson, our government representative on the panel.
WILSON: Theoretically, the use of mathematics may be the most practical or accurate approach to policy decisions – including conflict resolution at the macro level. Right now, we have no coherent industrial policy or its compendium strategic development plan, neither is there an energy plan, a water plan or a food plan. OR could help. Also, due to the downward skip of the economy, as well as the decreasing quality of life, there is pressure to depoliticize the policy-making processes by using scientific approaches, utilizing OR framework and methodologies. OR could be used to reformulate policies on the age-old poverty problem, population management, and climate change related issues. This is where the OR practitioners and advocates can take aggressive posturing.
M: Wilson, you currently specialize in labor and industrial relations. In this context, which the areas could possibly benefit from OR applications?
WILSON: Several. Candidates include wage setting and wage rates in relation to human development or otherwise. Also occupational safety and health measures.
5. M: Vic, where do you think OR could potentially be used in government?
VIC: I can think of many possible uses – traffic, garbage collection, optimal deployment of the police force, allocating resources during disasters, managing the electricity grid, optimal operation of our water dams, manpower allocation and deployment, and many others.
C. Phils. vs. internationally
1. M: Let’s take a macro view now and ask the panel – does it imply that Philippine private and public sectors compare poorly in OR use and appreciation vs internationally? Elise, you should answer this given your ORSP, APORS, and IFORS exposure. Let me break this up into specific bite-sized questions. First, which countries lead in OR practice?
ELISE: I would put the UK and USA as among the top in OR practice for business and government. IFORS membership numbers also give a clue – the US has the highest headcount, followed by the UK. I would say Canada and Germany follow closely in terms of a combination of academe and practice. Japan has a huge OR community, but most of them are in the academe.
M: So, the US dominates even the UK in both public and private sector OR?
ELISE: No. I would say UK has an advanced state of OR application in government while US would have more in the business sector doing OR.
M: Is there any other evidence out there that puts the US as the “OR gold standard” among countries?
ELISE: Well, a Wall Street Journal survey released this month ranked “mathematician” or one who uses quantitative methods for problem solving as the number one job out of 200 professions, according to the 5 criteria of income, environment, employment outlook, physical demands, and stress. Computer Engineer was “only” 5th. Interestingly, the “seaman” job was 197th out of 200. In the Philippines, it’s probably in the top 3 or top 5.
M: And how do we compare to other developing countries, like Egypt, Indonesia, Brazil, India, China, etc.?
ELISE: I believe the Philippines is at par, if not a little bit better among the developing country OR practice. Elise can elucidate a bit more.
M: And to your knowledge, are there a lot of areas, methodologies, tools or applications where OR is used in the UK or US but not in developing countries like ours?
ELISE: There are several but let me just give one specific example. OR workers in the UK report the use of problem structuring methods. In the Philippines, I have yet to hear of its application in business. This could be attributed to lack of competence and training in the area. I know that these methodologies are not taken up as part of the OR curriculum in local universities.
2. M: Vic, I’m sure you agree with Elise that we have ways to go. Now, you’re also familiar with INFORMS, the US equivalent of ORSP. What’s your impression of INFORMS and its members, Vic?
VIC: Most companies and universities that are members and present at INFORMS could be considered role models. Vic can expand.
D. Obstacles
1. M: Clearly, OR is under-appreciated, under-utilized, and in Elise’s own words, “underwhelming”. I’d like the panel to answer “why”? First possible reason, is there a problem of OR visibility and awareness? Both from the user side as well as the “pusher” side? Elise?
ELISE: Clearly, there’s lack of visibility. It’s not a well-known discipline, as math, statistics engineering – or even corporate planning – are. The name itself, which by the way, was coined by the Brits, is confusing and not descriptive. In fact, there are moves to change it, and several options have been bandied about – decision science, management science, business analytics, etc. In a way, even the academic community is not of one mind. The OR faculty units can be lodged in the Math, Engineering or Business colleges; in some case, they all have their own OR faculty.
2. M: Brian, would you agree?
BRIAN: Yes, absolutely. In the business school setting, OR is currently not appreciated as much as other quantitative courses such as finance and accounting. For example, MBA students would “focus” on accounting and finance because they find it more interesting and easily applicable to their work. OR for them is still traditionally for engineering purposes. The focus should be on decision sciences.
3. M: Elise, on the lack of visibility, is this only a developing country issue?
ELISE: Surprisingly, no. Even INFORMS thinks lack of visibility is a major issue in the US. Which led them to a “Science of Better” PR campaign in 2003. They stopped the ad campaign in 2007 and instead contracted a marketing consultant to craft a marketing strategy and hired a full-time Marketing Director to execute the strategy. Therefore, while there is a wide gap between the extent of OR practice in business in the US and the Philippines, they are plagued by the same problem of lack of visibility.
4. M: What about top management? The decision makers? Are they obstacles too? Vic?
VIC: By and large, top management is poorly educated on OR. Unless they came with MBA degrees from top local or international schools. Management is poorly informed on capabilities, applications and potential impact of OR. So to me, that’s a major obstacle.
5. M: If there was better awareness, through a more proactive program of selling and marketing, would top management be on board and be much more supportive? Elise, you’ve had a lot of experience selling to top managers in San Miguel’s various divisions. What’s your view?
ELISE: Assuming we get past the fear of the unknown through more education and marketing, or because they all suddenly have MBA degrees, there are still issues. One, historically, their seat-of-the-pants decision-making has tended to yield acceptable results. So why change? Two, alternatives are often not well-defined. We’ve always rented our barges before. Why think about buying? And three, there’s always been top management reluctance to spend too much time, like in data gathering. They want immediate action; they shun “paralysis by analysis”.
6. M: Are the OR practitioners and OR professionals also to blame? Let’s ask our academic, Brian.
BRIAN: Yes and no. We have decent practitioners and academic researchers. But – there is a need to revitalize the curriculum by emphasizing OR as a decision-making tool for business and management. Students should be taught how to use OR tools in various aspects of business (e.g. optimization in finance, Markov analysis in marketing, etc.)
M: Do you think there’s also a problem with the supply numbers?
BRIAN: I believe so. Mathematics-phobia is common among students. In the management field, OR is still a course that students dread to take because of its quantitative nature. We don’t have enough people taking up math, engineering, and OR.
7. M: Let’s go to government again, since it’s obviously the most under-served by analytics. Are there any special obstacles there, Wilson?
WILSON: Oh several. Every six years, top management changes, which means policies and priorities keep changing too. Government appointees span the spectrum, from highly-educated open-minded technocrats to uneducated, greedy, politically motivated sycophants. And then you have the corruption, which distorts the quality of decision-making.
8. M: Maybe some members of the audience can postulate other obstacle to wider-spread use, appreciation and impact of OR. We can have our panelists react. Anyone?
E. Supply side
1. M: Brian talked about the supply side. So let’s use that as a springboard to talk about supply side issues. Are our OR competent grads made of the right stuff? What about the OR teachers? What about practicum work? Access to knowledge and continuing education? Curriculum fine-tuning? Let’s start with Vic.
VIC: First, let me say that the schools are trying their best to produce OR-competent graduates. But – there’s still too much time devoted to theory and not enough time on the modeling and more important interpretation of results. The other area of concern is the reliance on teaching the OR method through proofs and manual computation. Instead, we should also use the computational tools available today to the academic community.
2. M: Brian?
BRIAN: I disagree slightly with Vic. I think most schools are producing the right graduates. I think the shortcoming is more on the industry side. Industry should learn how to train and nurture the skills of these OR-competent graduates. Students’ OJT in industry must be strengthened where industries give actual problems for students to solve. As for teachers, there is also a need to have faculty members from various non-OR fields. I strongly believe that critical thinking can be taught by both OR and humanities professors. M: BTW, since you’re here, what’s DLSU’s Business College’s strategy re OR? (BRIAN) Let me mention two things in particular. One, we’ll be beefing up OR in the College of Business. OR in other schools of business is a major field (Management Engineering at JGSOM-ADMU) and encompass a year to take (UP College of Business Administration students take six units of OR). Here in DLSU, right now, there is only one OR course for College of Business students. Second, DLSU’s Department of Industrial Engineering is very active in its industry linkage by having several centers under its belt. In the College of Business, starting next school a Decision Sciences Department will be formed to focus on systems thinking, analysis and applications.
3. M: Vic, do we have enough schools producing OR-competent or OR-literate graduates?
Vic: The Ateneo, along with UP and De LaSalle have very similar programs offerings that emphasize the use of OR. The other universities are following this trend. The growing list of participants in the ORSP quiz is a testament to this.
4. M: Elise, you’ve embraced OJT and practicum when you were in San Miguel. And you’ve pushed ORSP to continue producing workshops and seminars. Your thoughts?
ELISE: I find that assigning students to companies for a taste of the real-world has been very useful for my own training as an OR analyst. Therefore, I fully support academia-industry linkages. We will just have to sell this more to industry as few of them see the direct benefit to them of this program. On continuing education, ORSP envisions itself to be a prime local resource for seminars, workshops and technical forums to contribute to a greater knowledge of OR, both for those who are new to it and those who wish to keep up to date with developments and best practices.
5. M: Wilson, I sense that you disagree. True?
WILSON: Serious OR works are complex and the aftermath decisions have critical organizational impacts, which I do believe cannot be “trained” through practicum and OJT.
F. Prescription
1. M: OK, brass tacks. What needs to be done? Let’s start with you, Vic. Your list focuses on education and you already hinted at it earlier. Go ahead with your personal prescriptions.
VIC: In the curriculum, I’d emphasize applications over theory. I’d promote the use of open-source software (like COIN-OR, LpSolve, etc.) in the schools. I’d encourage the academic community to get academic versions of OPL-Studio/Xpress-MP/MPL for Windows and use these software to actually solve problems. I’d encourage the use of spreadsheet modelling and solver-engines within the spreadsheet like Open Solver, etc. I’d also encourage the use of simulation (ProModel, Arena, etc.). Related to this, the academe should perform more OR projects for companies and government institutions, with extensive student participation. In summary, continue improving OR education in the universities. BTW, ORSP should take on projects and lead the way.
2. M: Wilson, you mentioned to me that OR needs to be demystified. Say more.
WILSON: We need to remove the mystery from OR. Which means translating some of the materials so that they can easily be understood by many more people and creating greater public awareness. Higher public awareness means greater public support, in order to increase the pressure points on corrupt politicians and inefficient bureaucrats. M: Who do we need to sell OR to, in government? (WILSON) At the very least, ORSP and CORPS should dialogue with NEDA, DTI and DOF, and then with the economic cluster of the Cabinet.
3. M: Brian?
BRIAN: I agree with Wilson – OR needs to be marketed and sold to the general public. If OR can also be seen in people’s daily lives, like in disaster and traffic reduction, then OR can be more familiar with a lot of people.
M: You also made mention of the need for a “softer OR side”. Explain.
BRIAN: What I meant was – OR must go beyond “production” of technically proficient people but that OR must be also embrace its softer side in dealing with sustainability and social responsibility.
4. M: Alright, let’s get to Elise. I know you had a long prescription list. Let’s start with your education wish list.
ELISE: One, I’d offer OR courses as part of business programs. Two, I’d increase Math competence through proper early education in Math. Three, I’d create more supply through exposure to OR early in education. Four, I’d make sure OR education kept up with the advances in OR modelling and availability of tools. And fifth, I’d push for mandatory continuing education for practitioners. Too many OR researchers and practitioners stay in a narrow “comfort zone” for their entire careers, so despite the fact that the field is broad, many practitioners are not.
M: Your advice for OR in business?
ELISE: Make sure you identify the OR champions in the companies. They’re the decision makers who use OR directly. Or who contract for the use of OR. Or who choose to have OR embedded in their management processes. They don’t have to know how it works, they just have to know that it’s useful.
M: Anything else on your prescription list?
ELISE: We still need government support to help fund some of the OR research, education, and marketing. And maybe not a prescription but a “be careful” – sure, market OR but make sure the supply of OR professionals is there if and when the demand pick-up happens. And on the flip side, sure, market an OR course and career to students but make sure they have jobs when they graduate.