Logistics is the backbone of supply chain management; however it faces unpredictable factors such as labor shortages, economic conditions, climate change and unprecedented demand patterns. Conventional predictive algorithms and computing methods are falling short in meeting industry demands. Although Quantum technology is still in its early phases, it provides promising results in tackling industry challenges. According to Mckinsey, Quantum computing can have an economic value ranging from $29 billion to $63 billion by 2035; the logistics and supply chain industry are at the forefront of benefiting from Quantum technology.

What is Quantum Computing?

Regular computation methods process information in bits — 1s and 0s. Each bit is either a 1 or 0. On the other hand, quantum computing processes information in qubits — 1, 0 or both at the same time [complex numbers]. Quantum computing operates on the principle of the “Quantum Theory” where matter can exist in multiple states — waves, particles and both. This unique property of quantum computing is known as “superpositioning”. Another unique property derived from the quantum theory is “Quantum entanglement” which allows multiple qubits to link and work together. As information can be projected and rotated, numerous possibilities can be processed at the same time. 

How is Quantum Computing transforming logistics?

Route Optimization

As discussed above, quantum computing allows various algorithms to run in parallel, leading to the possibility of considering numerous variables simultaneously. Possible variables include: shortest routes, traffic situation, fuel charges and climate conditions. Quantum computing can allow logistic companies to determine the most efficient delivery route while keeping in check fuel charges and climate conditions. To explain this better, consider a delivery man needs to make a multitude of stops, what would be the most efficient sequence of stops? Quantum computing can provide an optimal sequence of stops as it can process a myriad of variables. Route optimization can also enable logistic companies to reduce their carbon footprint which can tackle their problem of meeting sustainability requirements.      

Optimized Fleet Management

Supply chain management is not only about finding the most optimal routes; it is also about optimizing vehicle use and management. Quantum computing processes data in real time — this feature can be used to improve fleet management. It can analyze vehicle movement patterns to determine optimal size and composition, predict maintenance, reduce fuel consumption, and optimize labor and vehicle costs. 

Efficient Warehouse Management

Optimized supply chain management starts with efficient warehouse management. Enhanced storage layouts, allocation practices and picking routes are essential for optimal warehouse management. Quantum Computing allows managers to analyze various factors — facility layout, storage unit space, inventory levels, and demand fluctuations — to optimize storage and order fulfillment strategies. Inventory management can also be enhanced by utilizing quantum algorithms and technologies.

Optimized Supply Chain Management

Unlike logistics, supply chain management deals with operations involving procurement, production, warehousing, and distribution. These myriad of functions require complex data analysis as a variety of variables are involved. Traditional computing methods can not analyse all instances and situations. On the other hand, Quantum computing can process data simultaneously optimizing supply chains in real time. Complex variables like demand forecasting can be accurately predicted using quantum simulation techniques and risk analysis. Similarly, quantum algorithms can predict potential disruptions and provide necessary adjustments accordingly. 

Efficient Cargo Loading

Optimized cargo loading is the desire of every company transporting large quantities of goods by rail, road, air and sea. Quantum technology can be used to optimize cargo loading by analyzing variables such as container size, special handling requirements, container capacity and dimension of items being handled. The terminal at Pier 300 located in Los Angeles deployed quantum technology [D-Wave Quantum] for cargo loading and noticed a 60% boost in crane deliveries per day — this advancement contributed towards increasing the port’s value up to $2.3 billion in 2021. 

Conclusion

The application of quantum computing to improve logistics and supply chain management is vast. Although quantum technology is still in its early stages, logistic companies utilizing quantum technology have noticed enhanced operational efficiency as reported in a research conducted by the quantum economic development consortium. In the future quantum algorithms promise to tackle complex logistic problems and enhance supply chain operations. Early adopters of this technology will gain a significant competitive edge so it is advised to take early action and formulate strategies accordingly.