3 answers
Mia
Student
Winston-Salem, North Carolina
1
Question
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What is the day to day of a Financial Engineer like?
I am a Senior in college applying to Master's programs. I am considering many schools that have both Master's in Industrial Engineering, and Master's in Financial Engineering. Can anyone in either of these fields explain their day to day a little bit, and how I should decide which path to take? #engineering #college #financialengineer #industrial #industrialengineer #finance
3 answers
David Lee
Actuary
52
Answers
Los Angeles, California
Updated
David’s Answer
Sorry I don't practice in those areas but do have a masters in industrial engineering and operations research, which had an available financial engineering focus.
One aspect of industrial engineering has to do with design of factories so the flow of material and tasks performed is optimized for efficiency, cost, quality, time constraints, etc. You study mathematical optimization (to come up with optimal solutions subject to constraints), statistics (for quality control), and simulation (to simulate factory flow), among other things. I spent some time in school studying a semiconductor facility where microchips are made, and visited the factory itself. These graduates might work in the office side of some factory setting, studying the efficiency or quality output of the processes.
I guess for theoretical reasons financial engineering is crammed into the same department. Finance is rather mathematical and statistical, and the subject areas I mentioned for industrial engineering also apply, but with finance you are applying those concepts to stocks, bonds, derivatives, and other financial instruments. People going through that part of the program typically wanted to be a trader, market maker, financial "quant" or something like that--Wall Street types who like cufflinks and suspenders ha ha
So you can see these two areas have similar theoretical underpinnings but may attract rather different sorts of people, but all with some good analytical and math smarts!
One aspect of industrial engineering has to do with design of factories so the flow of material and tasks performed is optimized for efficiency, cost, quality, time constraints, etc. You study mathematical optimization (to come up with optimal solutions subject to constraints), statistics (for quality control), and simulation (to simulate factory flow), among other things. I spent some time in school studying a semiconductor facility where microchips are made, and visited the factory itself. These graduates might work in the office side of some factory setting, studying the efficiency or quality output of the processes.
I guess for theoretical reasons financial engineering is crammed into the same department. Finance is rather mathematical and statistical, and the subject areas I mentioned for industrial engineering also apply, but with finance you are applying those concepts to stocks, bonds, derivatives, and other financial instruments. People going through that part of the program typically wanted to be a trader, market maker, financial "quant" or something like that--Wall Street types who like cufflinks and suspenders ha ha
So you can see these two areas have similar theoretical underpinnings but may attract rather different sorts of people, but all with some good analytical and math smarts!
Allan Espiritu
Principal Industrial/Manufacturing Engineer
3
Answers
York, Pennsylvania
Updated
Allan’s Answer
Hello, I’m a career long IE. So as an IE you can basically go in any industries, it’s up to you on what you enjoy. I’ve worked I NBC aerospace, automotive, supply chain, machine shops, parts manufacturing, and service industry. Foremost, an IE works with people, machine, processes, energy and data to improve efficiencies. You will interact with people a lot so if you are not a people person, then this is not the right role for you. All 5 things above interact with people so there’s no way around it.
I enjoyed working in automotive since it covers all 5 and it changes every year (new model year). You will be working on new processes, rebalancing the line, researching /procuring new equipment, training people, changing data sets, eliminating ergonomic issues, make/buy decisions, ROI, etc. it’s busy and you only have 7-8 months to prepare for next model year and only have 1 week to convert the line. It’s fast paced and long hours but it’s rewarding!!!! I’ve also worked in distribution where you work primarily with labor standards and creating/updating them as new technology is introduced in DCs. Nowadays, there’s a lot of travel since I am not assigned just one DC but multiple ones. You are also analyzing data sets and they are large!!! So you’ll need to be knowledgeable in sql and Excel.
I’ve worked in new product introduction (NPI) for an appliance/ power company and I justified new products. I created P&L or cost models for new products and forecasted 1-3-5-10 yr profitability for the program. So I had to estimate labor and material (domestic or intl), NRE and recurring costs. I got to work with our factories in China or Italy. That was exciting since I created the true cost of a product before our company invested in it.
Then there’s aerospace, which can be slow since lifecycle of an aircraft goes beyond 10 years so not a lot will change other than the processes. You’ll see the same aircraft for 10 yrs and you’ll probably invest in new technology in fabricating it.
So these are the industries I’ve worked in and I hope they shed some light on what you can expect. Remember as an IE you are the efficiency expert for any company and you are there to eliminate the WASTE in their process so you need to integrate the people, machine, data, energy, and material to improve the bottom line.
I enjoyed working in automotive since it covers all 5 and it changes every year (new model year). You will be working on new processes, rebalancing the line, researching /procuring new equipment, training people, changing data sets, eliminating ergonomic issues, make/buy decisions, ROI, etc. it’s busy and you only have 7-8 months to prepare for next model year and only have 1 week to convert the line. It’s fast paced and long hours but it’s rewarding!!!! I’ve also worked in distribution where you work primarily with labor standards and creating/updating them as new technology is introduced in DCs. Nowadays, there’s a lot of travel since I am not assigned just one DC but multiple ones. You are also analyzing data sets and they are large!!! So you’ll need to be knowledgeable in sql and Excel.
I’ve worked in new product introduction (NPI) for an appliance/ power company and I justified new products. I created P&L or cost models for new products and forecasted 1-3-5-10 yr profitability for the program. So I had to estimate labor and material (domestic or intl), NRE and recurring costs. I got to work with our factories in China or Italy. That was exciting since I created the true cost of a product before our company invested in it.
Then there’s aerospace, which can be slow since lifecycle of an aircraft goes beyond 10 years so not a lot will change other than the processes. You’ll see the same aircraft for 10 yrs and you’ll probably invest in new technology in fabricating it.
So these are the industries I’ve worked in and I hope they shed some light on what you can expect. Remember as an IE you are the efficiency expert for any company and you are there to eliminate the WASTE in their process so you need to integrate the people, machine, data, energy, and material to improve the bottom line.
Rana Khoda, MBA, CSM
Sr. Manager Program Management
10
Answers
San Francisco, California
Updated
Rana’s Answer
Hi Mia
As a Financial Engineer, you have 2 main responsibilities:
1- Look after daily production issues ( for example incorrect populated/calculated on the invoice, or a transaction doesn't sync successfully to your ERP system,..)- As the Engineer you need to be able to look into these issues and resolve them as quick as possible
2-Second responsibility normally fall under special projects. In real world, there are normally projects going on (besides business as usual) For example: Introducing a ew currency, new CC, new way to monetize,..... These tasks normally have lower priority than production issues
In general as Financial Engineer you will be owning/enhancing systems that are needed to run Financial Operations ( Billing systems, Tax Engine, Revenue Recognition systems,...)
Regards
Rana
As a Financial Engineer, you have 2 main responsibilities:
1- Look after daily production issues ( for example incorrect populated/calculated on the invoice, or a transaction doesn't sync successfully to your ERP system,..)- As the Engineer you need to be able to look into these issues and resolve them as quick as possible
2-Second responsibility normally fall under special projects. In real world, there are normally projects going on (besides business as usual) For example: Introducing a ew currency, new CC, new way to monetize,..... These tasks normally have lower priority than production issues
In general as Financial Engineer you will be owning/enhancing systems that are needed to run Financial Operations ( Billing systems, Tax Engine, Revenue Recognition systems,...)
Regards
Rana
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