More MBAs are being hired in the manufacturing sector according to reports

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According to analysts, more and more MBA are leaving the trading floors to pursue positions in manufacturing.

Why are so many people with master’s degrees in business administration moving into a sector that has been dominated for years by industrial engineers? And why is the manufacturing sector eager to hire MBAs for more than the standard human resources and accounting positions?

Decline in the number of industrial engineers

Industrial engineers were the first group to implement scientific studies and methodical planning to the shop floor using methods pioneered by Deming and Juran. Those earning a masters in business administration learn about manufacturing planning, streamline supply chains and balance shop loads as industrial engineers do.

However, those earning an MBA may focus on logistics or supply chain management or complete an online executive masters in business administration to focus on managing people. Yet there are more graduates with any of these master’s degree specializations than industrial engineering students because the MBA is seen as more valuable in the workplace since you can work in a traditional industrial engineering capacity in many cases and move into operations management, manufacturing planning, or facilities management.

The MBA is also seen as the degree of choice for engineers who want to have the possibility of moving into management or standing out from other engineers. In contrast, industrial engineering programs are on the decline because it is seen as too specialized, though IEs are moving into the service sector.

Greater complexity in the workplace

Those with an MBA understand the complexity of managing contractors and subcontractors as extensions of the company. This is why GMAC reported in 2014 that almost 90% of manufacturing companies expected to hire MBAs; only healthcare institutions expected to hire more MBAs.

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The supply of MBA talent going where there is demand

With so many people carrying the MBA credential versus the declining number of management jobs, we see more MBAs moving into manufacturing where there are jobs open to them simply to find good paying employment.

While relatively few MBAs sought jobs in healthcare and manufacturing, about three-quarters of those who sought them found them shortly after graduation whereas fewer than six in ten seeking traditional jobs in finance, accounting and management found them as quickly as they planned. And this is only partially due to people with experience in these industry sectors returning to them after completing an MBA. Rochester, for example, saw a three percentage point increase of students entering manufacturing.

Manufacturing has long required scientific and information-driven management, and with the decline in the overall numbers of industrial engineers, MBAs are filling in the gap. MBAs are attracted to manufacturing by the availability of jobs, and they are sought by companies who need help with data analysis and managing complex supply chains. And MBAs remain in demand in manufacturing as more of the product manufacturing is shifted to suppliers while their employers customize the products before shipping them to the customer.