The Operations Management

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APICS The Association for Operations Management in conjunction with the Cameron School of Business at the University of North Carolina – Wilmington, is pleased to provide the 2010 second quarter installment of an ongoing condensed quarterly report of the “State of the Operations Management Profession.” This report provides year-to-year comparisons and trend analysis where appropriate. A full report will be available annually from APICS.

This is a limited public version of this report. It omits full coverage of available geographic, gender, and demand by skill set data. The full version of this report is available free of charge to APICS members at apics.org/research.

The data for this and future reports are collected quarterly from a random sample of a 30,000-plus database of operations management professionals worldwide. Each quarter, approximately 25 percent of the APICS membership and customer base receives a request to complete an online survey collecting data concerning three unique employment areas. These include

• anticipated operations management employee hiring for the next 0 to 6 and 7 to 12 months • current salary and compensation by job function and title.

• specific knowledge and skill sets required and preferred for various job areas.

Comprehensive data for this 2010, second quarter report were collected beginning in September 2009. Four additional quarterly installments of the survey were conducted in October 2009, December 2009, April 2010, and June 2010. Where appropriate, results are presented as a combination of data from all surveys to ensure reliability and validity of the findings. The following survey results are presented in three major sections:

I. Employment hiring trends in the operations management profession. These data will help predict economic improvement or decline as measured by projected changes in employment.

The Operations

Management

Employment Outlook

Second Quarter 2010

APICS The Association for Operations Management

The University of North Carolina Wilmington

Education Pays

How much more can you expect to earn depending on your education and certification? Bachelor’s degree: 11 percent more than a high school degree Master’s degree: 16 percent more than a bachelor’s degree APICS CPIM: 10 percent more than those without

APICS CSCP: 19 percent more than those without

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The Operations Management Employment Outlook—First Quarter 2010

II. Salary ranges and trends in the operations management profession. This section of the report tracks salaries in five functional areas and over 30 job titles within the operations management field. These data are critical indicators of the strength and progress of the profession.

III. Education and certification impact on salary. Data of this type are critical for a variety of careers, training, and education purposes. They also give human resource departments valuable information about current levels of compensation based on education and certification level.

I. Hiring Trends

In this 2010 second quarter report it is promising to find continued projections of economic upturn supported by anticipated industry hiring data. In the 2009 inaugural report, only 48 percent of survey respondents with hiring responsibility indicated that they anticipated hiring new employees within in the next 12 months. Second quarter 2010 hiring projections show 57 percent of survey respondents with hiring responsibility indicate that they anticipate hiring new employees within in the next 12 months, with 90 percent of those (51 percent of survey respondents with hiring responsibility) planning to hire within one or more of the following operational areas: execution and control of operations, purchasing/ customer relationship management (CRM), quality, resource planning, and supply chain management. Conversely, 13 percent of survey respondents with hiring responsibility anticipate layoffs during the same period of time, with 25 percent of those (3 percent of survey respondents with hiring responsibility) planning to layoff within one or more of the five operational areas. The combination of increased hiring and reduced layoffs is consistent with first quarter 2010 results, showing an upward positive trend. Respondents were asked to indicate the number of current employees in five operational areas and estimate anticipated hiring and layoffs in these operational areas over the next 0 to 6 and 7 to 12 months. Table 1 shows anticipated net hiring (as a percentage of current employees) for operations management professionals primarily engaged in execution and control of operations, purchasing/CRM, quality, resource planning, and supply chain management (data reported show anticipated hiring less anticipated reductions in force).

Table 1

Career Area Anticipated Percentage Change 0-6 Months Anticipated Percentage Change 7-12 Months Execution and Control of Operations 6.8% 12.5%

Purchasing / CRM 11.% 13.8% Quality 18.3% 25.4% Resource Planning 75.4% 14.9% Supply Chain Management 7.4% 34.8%

II. Salary/Compensation

The results of the second quarter 2010 salary and employment survey are quite positive for salaries in the operations management profession. The salary component of the survey tracks compensation over 30-plus unique job titles in the field. Respondents were asked to report not only current salary but also any other cash compensation received. To ensure validity of the results for reporting purposes, respondents were grouped into five recognized categories (execution and control of operations, purchasing/CRM, quality, resource planning, and supply chain management) rather than by individual job titles. Future annual reports will be broken down by individual job titles.

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Tables 2, 3, and 4 show salary and other compensation by job category. Table 4 shows the average annual compensation across all operations management job categories was $94,117. Average

compensation ranged from a high of $100,948 for the execution and control job classification, to a low of $74,806 for the purchasing/CRM job area. The execution and control job category has consistently ranked highest for total salary compensation over the last 12 months.

Table 2: Average Salary by Job Category (in USD)

Job Category Average Execution and Control of Operations 88,871 Purchasing/CRM 69,801 Quality 71,828 Resource Planning 71,351 Supply Chain 89,393 *Overall Weighted Average 84,582

*Average salary across all respondents (salaries weighted by number of respondents in each job category)

Table 4: Average of Total Compensation (Salary + Bonus) by Job Category (in USD)

*Average salary across all respondents (salaries weighted by number of respondents in each job category)

III. Education and Certification Pay

Those employees completing a bachelor’s degree can expect approximately 11 percent more in total

compensation over a comparable employee with a high school degree. Dedication to an advanced specialized master’s degree will command approximately 16 percent more than a bachelors degree and 29 percent more than a high school diploma. Individuals completing a masters in business administration (MBA) degree can expect approximately 13 percent higher compensation than those with a specialized masters degree and approximately 45 percent more than those with only a high school diploma. When adding in the variable of gender with education, the gap becomes wider at the lowest education level. For those employees with only a high school diploma, males are earning approximately 27 percent more than females.

Table 5 and Figure 5A show that this gap narrows to approximately 17 percent with a bachelor’s degree and 7 percent with an MBA. There is a noticeable divergence in salaries between males and females with Ph.D.s, with males earning 48 percent more than females. Once again, these differences are consistent with data collected across all collection periods over the previous 12 months. Future iterations of the survey hope to provide more insight into salary differences across gender by considering how average compensation varies by factors such as job title, average number of employees supervised, and the like.

Table 3: Average Bonus by Job Category (in USD)

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The Operations Management Employment Outlook—First Quarter 2010

Table 10: Average Total Compensation by Education and Gender

Education Level Female Male Average High School $67,683 $86,119 $78,594 Associate/Technical $58,924 $79,026 $71,426 Bachelor’s $78,434 $91,438 $87,229 Master’s $80,752 $106,427 $101,164 MBA $108,765 $116,051 $114,130 Ph.D. $102,843 $152,010 $143,460

* Average weighted by number of respondents in each category

Female Male

Education Level

Salary

Figure 5A: Average Salary by Education

* Average salary includes base salary and bonus compensation

It is extremely encouraging to note that approximately 47 percent of survey respondents hold an APICS Certified in Production and Inventory Management (CPIM) designation, and approximately 20 percent currently hold an APICS Certified Supply Chain Professional (CSCP) designation. For those employees holding these advanced certifications, compensation levels move up significantly. On average,

individuals with the CPIM designation receive approximately 10 percent higher compensation than those without the designation. Similarly, individuals with CSCP designation receive approximately 19 percent higher compensation than those without CSCP certification.

Table 6

Certification % of Respondents with Certification Average % Increase in Compensation* CSCP 20.4% 19.2%

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For questions or comments about the research, data collection, or report, please contact: Drew Rosen, Ph.D., Tom Janicki, Ph.D., Steve Mahar, Ph.D.

Cameron School of Business

University of North Carolina Wilmington (910) 962-3678

[email protected]

For general inquiries about APICS and other APICS research initiatives, please visit apics.org/ research or contact:

APICS Customer Support

(800) 444-2742 or (773) 867-1777 [email protected]