AI, Quantum and the Promise of Net Positive Supply Chains

Reducing supply-chain emissions is vital if the world is to meet its net-zero commitments. According to research by the World Economic Forum and Boston Consulting Group (BCG), just eight supply chains are responsible for 50% of global emissions, and scope 3 accounts for, on average, 75% of companies' emissions.

Building a sustainable and responsible supply chain is critical to Fujitsu’s Net Positive commitments, explains Mr Yamanishi. “At a minimum, we comply with labour standards in each country we operate. We’ve incorporated human rights into our business principles and practices. And we have a worldwide, diversified pool of suppliers. Other measures to track progress include making our cloud services more energy-efficient; expanding the research into and use of renewable energy sources; and ensuring data security and a commitment to continuous improvements and automation, for example by adopting the use of AI in improving demand planning and forecasting.”

Mr Yamanishi insists that increasing supply-chain resilience and sustainability go hand in hand. And Fujitsu has created Fujitsu Uvance to help companies to make that necessary shift, offering customers a range of strategies and solutions to achieve Net Positive.
Nathalie Struck, head of sustainability services at Fujitsu, explains that the drive towards Net Positive supply chains “starts by optimising products and development, improving resource efficiency by using low-carbon inputs, stripping out waste and maximising circularity”. But, she adds, delivering Net Positive resilience goes much further, focusing on supplier diversification, health and safety, reskilling and upskilling, employee engagement, and sharing best practices.

Visibility is key to delivering sustainability through “creating a full awareness of risk management and transparency”, insists Ms Struck. This highlights “the potential impact any social, economic or environmental risk can have on a supply chain”. And, she adds, digitisation is essential for actionable oversight. “IoT gives us more granular visibility, while the combination of AI and high-performance computing (HPC) can handle higher volumes of more diverse data.”

Ms Struck points out that Fujitsu is investigating many areas in which AI can transform supply chains and radically reduce waste, through enhancing products and services, demand forecasting, supplier risk management, production planning and route optimisation.

From sourcing raw materials to final products on retailers’ shelves, supply chains are huge and fragmented. And they must be optimised for multiple, diverse and competing objectives – from achieving environmental, social and governance (ESG) goals to optimising trade finance agreements. Although traditional computing improves supply-chain performance, quantum computing has the potential to take on more complex challenges and radically redefine supply-chain optimisation.

“Quantum computing is good at solving multi-objective optimisation problems,” explains Ellen Devereux, quantum computing consultant at Fujitsu. “The more variables there are, the better the opportunity for optimisation with quantum technology becomes.” Although a commercially available, fault-tolerant quantum computer may still be some years away, supply chains are already benefiting from quantum approaches to optimisation. Quantum-inspired technologies can solve the same optimisation problems, using digital solvers based on the Quadratic Unconstrained Binary Optimisation algorithm (QUBO), a mathematical method that addresses complex supply-chain challenges. Fujitsu has used advanced QUBO solvers to eliminate a range of supply-chain pain points, including warehouse picking, traffic flow optimisation across the Port of Hamburg and last-mile delivery for Japan Post Office.

Fahian Huq, professor in operations and supply-chain management at Alliance Manchester Business School, sounds a note of caution. “While digitisation can improve supply-chain fragility and reduce risk, it’s not a silver bullet. There are many implementation challenges. One is the digital divide. Many supply chains start in developing countries where there are significant skills shortages, and we must bridge this gap. Similarly, smaller organisations may not have the budgets or skills to digitise.”

One way in which Fujitsu is working to bridge the digital divide is to make it easier for different organisations to share data across the supply chain. Good-quality data are the foundation for digitisation, AI and quantum solutions. Providing data access to all stakeholders removes a significant barrier to digitisation for smaller players.

Recently, closed-community data sharing has emerged, where a handful of organisations share data. Ms Struck explains that Fujitsu’s vision is to scale these small communities into larger data spaces. “The objective is to make community data available to many more participants, through a centralised and dynamic data platform.”