“My undergraduate degree was in math and computer science, and I have a master’s degree in computer science,” DJ O’Neil said. “I consulted for six years. I was a good IT consultant, but optimization really requires that you understand the science behind the solutions. The Industrial and Systems Engineering graduate program at the University of Minnesota is perfect for that.”
Retail optimization is an evolving field, O’Neil said. “It’s growing as retailers become more mature with their regular operations and planning process. They have mature enough data to say, ‘OK, now I want to optimize.’”
The Industrial and Systems Engineering program combines analytical courses, like optimization and statistics, with management courses. “My goal in going back to school was to be a retail scientist. I approached it as a very quantitative-based business degree. There was a class just on optimizing the supply chain, a class on incorporating randomness into models, and another class for making hard decisions in a very quantitative way,” he said.
There are a number of applications for optimization, he said. “You can do supply chain optimization, to help retailers put together optimal replenishment strategies. You can do price optimization to optimize margins while meeting the company’s strategic objectives.”
For his Master’s project, O’Neil created a markdown optimization model. “If I have a thousand shirts to sell, depending on how much the shirt costs, there is an optimal markdown cadence. The solution might be that I have a hundred shirts left at the end that I have to sell at two dollars, or I won’t make any money. There are real business constraints — it might be that the best thing financially would be to mark it down now, but that’s not good for the organization’s image.” While other models already exist, O’Neil said, “What I created solves the problem in a faster way.”
Why did industrial and systems engineering appeal to you?
It’s my personality — leaders are great at taking risks, making decisions quickly with the small amount of evidence available. I’m not good at that. If there isn’t a good foundation of evidence that it will work, I’m not comfortable saying, “Go ahead and do this.” So a quantitative foundation to support business strategies is what drew me to the program.
What is your current role?
I’m an Oracle retail implementation consultant. The intent is to understand both the technical deliverables and the business process and strategy. My objective is to be the one person who can talk to the business, talk to IT, provide strategy for implementation and support. It’s delivering the complete solution.
How does the degree help you?
If you can explain to the client, both in a subjective way and quantitatively, you can build confidence in the science that supports the solution. People have been setting prices for years, but they were not very data driven. Now I’m empowered to say more than, “It’s a black box, trust me.”
What’s the best part of your job?
I get to work with very smart people. We each get a ton of ownership over the solutions we build. These are solutions the client will use for 10 or 15 years. We get to make a huge impact. □