Quantum boost for global supply chains

WHEN global supply chains were disrupted during COVID-19, America’s busiest port, Los Angeles, found itself swamped with containers piling up from around the globe. It turned to quantum computing to solve the congestion.

It then found it could move higher amounts of cargo more rapidly than if it just relied on conventional computing. And now the Port of Rotterdam is following suit in adopting quantum technology to enhance operations.

In an ever-competitive global market, businesses compete not necessarily based on brands but on their supply chain agility and efficiency. Still-nascent quantum tech can enhance resource utilisation and warehouse capacity in managing inventory.

Quantum computing offers businesses a massive opportunity to solve complex problems by considerably speeding up data-driven decision-making.

Supply chain businesses have faced difficulties in controlling data fragmentation, disruptive events and the constant fluctuation in customer demand which regularly create supply chain hiccups.

Speedy and accurate decision-making with voluminous data amid such complexities requires higher computation capabilities than conventional computers can handle.

The exploration of quantum computing will continue to expand and lead to real-world applications. A recent report by McKinsey projected the value of quantum computing to reach US$700 billion by 2035.

The World Economic Forum, meanwhile, identifies quantum computing as one of the five emerging technologies to watch this year. This study predicts that given the evolving market, Schumpeter’s theory will increasingly drive businesses to incorporate emerging technologies into their existing infrastructure for competitive advantage.

Today’s conventional computers rely on transistors to calculate using the binary logic in digits or ‘bits’ with each bit represented by either 0 or 1. However, quantum computers are not constrained by the logic principle but utilise quantum mechanics – the branch of physics that deals with the behaviour of matter and light on a subatomic and atomic level.

What makes it superior to conventional computing is that it not only calculates in bits but also in quantum bits or ‘qubits’ at the subatomic level using electrons and photons, where multiple values occur via superposition and quantum entanglement.

This allows more calculations to take place simultaneously rather than one after another. Optimal solutions to complex problems can be achieved at an exponential rate compared to conventional computing.

For instance, Google scientists published a study demonstrating that their quantum processor required only about 200 seconds to complete a task that would have taken a state-of-the-art supercomputer 10,000 years.

This can benefit industries involved in global supply chain management as quantum computing is most applicable where big datasets are involved for simulations or modelling, forecasting and mapping interactions.

It offers potential supply chain optimisation in these areas: product development, purchasing, production planning, inventory management and logistics.

Quantum computing can also assist companies to shorten the time between product development and market launch. In one case, German automaker BMW collaborated with a quantum computing company to accelerate parts design and development via simulation.

By optimising the process, parts can be rapidly tested and the design validated. BMW also partners with quantum computer developers to improve parts purchasing efficiency by maximising decision-making that requires matching the right supplier at the lowest price with production schedules.

According to IBM, last-mile delivery can be optimised by calculating the optimum route at the lowest cost, shortest distance and fastest time in alignment with fleet capacity.

Meanwhile, global professional services firm Ernst & Young provides two cases of quantum computing in logistics and transportation optimisation.

In the first case, Coca-Cola Japan aims to optimise the delivery route to improve service turnaround time for 700,000 vending machines. In the second, a logistics company partners with Microsoft to optimise freight transportation while balancing various factors such as traffic conditions, driver preferences, etc.

Managing costs optimally, matching demand and supply accurately, and delivering products and services timely from end to end of the supply chain determine success.

However, businesses usually face constraints as they must manage the flow of information, materials, and finance within the supply chain across multiple networked parties dispersed over various locations, requiring complex decision-making processes.

A key driver to developing supply chain agility and efficiency is technological innovation. In particular, digitalisation and the adoption of emerging technologies like quantum computing can significantly transform existing business models by harnessing huge amounts of data for supply chain optimisation.

Such strategies require increasing computing power infrastructure to assist businesses in leveraging data to enhance crucial decision-making processes.

It is all not a bed of roses, however. With the opportunities offered, encryption threats can arise. Quantum computing’s processing prowess and velocity using Shor’s algorithm can decrypt conventional cybersecurity systems leading to data breaches. Companies will need to employ quantum cryptography to combat this.

Quantum computing will be a strategic investment, especially for large corporations or multinationals. However, businesses that lack funding or access to this technology can be disadvantaged and risk falling behind due to a quantum divide.

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* Andrei Kwok is Senior Lecturer and Director of Graduate Coursework Studies, Department of Management, School of Business, Monash University Malaysia. He declares no conflict of interest.