Welcome!

News Feed Item

Fujitsu Develops Model Predictive Control Technology Specifically for Supply Chain Management

Generates highly accurate distribution industry demand forecasts and production plans that can minimize inventory and maximize profits from retail operations

Tokyo, Mar 7, 2014 - (JCN Newswire) - Fujitsu Laboratories Ltd. today announced that it has developed model predictive control technology specifically intended for supply chain management. Using this technology, it is possible to make successive revisions to plans based on multiple long-term forecasting scenarios and to respond to sudden changes in demand.

Big data has made it possible to forecast demand with increasing accuracy, but there is still a need to make better decisions for production quantities and order quantities in situations where demand often changes due to factors such as discount sales promotions or new product introductions. In such situations forecasting is considered to be unreliable and uncertain.

Fujitsu Laboratories has developed a model predictive control (MPC) technology, based on multiple forecasting scenarios, that looks ahead a certain amount of time to generate optimal ordering and production plans. Furthermore, by revising the forecasting model itself, it is possible to generate highly accurate planning made in response to sudden changes in demand.

This technology can be used, for example, to optimize inventories based on demand forecasts for retail store operations, or to generate ordering plans that optimize profits even when demand changes suddenly. When verified with actual customer data, profits increased by an average of roughly 16%.

Background

In recent years, there has been a sudden emergence of tools for real-time collection, compilation, and analysis of huge volumes of data, such as data from product sales as well as social media and sensor data. The use of big data has come to be regarded as an important way to grow business and establish competitive advantage.

This includes putting machine learning, data mining and other predictive and analytic technologies to work together with optimization technologies to deal with enormous volumes of data. Technologies employing big data are increasingly seen as a way to assist with decision making in operations and management.

Issues

Although the accuracy of demand forecasting is improving thanks to the use of point-of-sale data, it is not easy to make accurate forecasts that take into account changes in demand that may arise from special sales or new product introductions. In such situations, it has been challenging to determine how best to use big data to make optimal decisions.

While it is possible to improve forecasting accuracy by using more sophisticated forecasting models that explicitly account for the factors underlying changes in demand, there is no way to completely eliminate the uncertainty in the forecast. Accordingly, it is important to make the best possible decisions while understanding the risks involved because of the inherent uncertainty of forecasts.

About the Technology

Fujitsu Laboratories has researched and developed optimal control methods for relevant models in the manufacturing domain, and, taking into account the unpredictability of models, has moved forward on the development of model predictive control technology that achieves optimal control in response to conditions that change minute-by-minute. This has been applied to fields such as energy management and engine control, where it has resulted in more efficient use of resources and improved performance.

In this instance, Fujitsu Laboratories applied its acquired model predictive control technology to retail supply chains. Responding to rapid changes in demand, and taking into account opportunity loss due to the cost of maintaining inventory and the cost of running out of stock, this technology achieved ordering plans that minimized total costs.

Key features of the new technology are as follows:

1.Every time an order is placed, the system determines the optimal order quantity by performing an optimization calculation that attempts to maximize profit while minimizing total costs. These costs include the cost of carrying inventory and the cost of opportunity losses incurred by running out of stock, all under a set of constraints, such as shipment capacity, delivery time, and expiration dates.
2.Order quantities are optimized over a fixed period that is based on a demand forecast that is successively revised.
3.Order quantities are calculated to limit loss and maximize profits even under worst-case scenarios, by taking into account multiple long-term forecasting scenarios gleaned from big data.

By repeating the forecast/optimize cycle in steps 1 through 3 above, it is possible to automatically generate optimal ordering plans that respond to rapid changes in demand, all while taking into account the uncertainty in the forecast, a result that previously had been difficult to achieve.

This technology uses a calculation technique called mathematical optimization, which gets the best answer possible by following the rules that have been applied. In this instance, by varying the way it calculates the total cost and the constraints, it can generate ordering plans with flexibility.

Results

This technology was able to generate ordering plans that optimized retail inventory levels in a supply chain in a way that maximizes profit and responds to rapid changes in demand. When confirmed using actual retail store data across approximately 90 stores over a period of 60 weeks to generate ordering plans, this technology improved profits for all but one of these stores over conventional methods of determining order quantities via safe inventory amounts. In total, this technology increased profits by an approximate average of 16%.

Future Plans

Today, Fujitsu Laboratories is developing a forecasting and optimization platform that assists with and automates decision making in operations and management by combining advanced forecasting and analysis technologies based on big data with optimization technologies, and is making it possible to create templates of analysis scenarios that combine forecasting and analysis with optimization, all on a single platform.

In the future, the company plans to incrementally incorporate an optimization technology based on the newly developed model predictive control technology into this forecasting and optimization platform, and position it as part of the FUJITSU Big Data Initiative set of products and services related to big data.

About Fujitsu Limited

Fujitsu is the leading Japanese information and communication technology (ICT) company offering a full range of technology products, solutions and services. Approximately 170,000 Fujitsu people support customers in more than 100 countries. We use our experience and the power of ICT to shape the future of society with our customers. Fujitsu Limited (TSE: 6702) reported consolidated revenues of 4.4 trillion yen (US$47 billion) for the fiscal year ended March 31, 2013 For more information, please see www.fujitsu.com.



Source: Fujitsu Limited

Contact:
Fujitsu Limited
Public and Investor Relations
www.fujitsu.com/global/news/contacts/
+81-3-3215-5259


Copyright 2014 JCN Newswire. All rights reserved. www.japancorp.net

More Stories By JCN Newswire

Copyright 2008 JCN Newswire. All rights reserved. Republication or redistribution of JCN Newswire content is expressly prohibited without the prior written consent of JCN Newswire. JCN Newswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
While DevOps promises a better and tighter integration among an organization’s development and operation teams and transforms an application life cycle into a continual deployment, Chef and Azure together provides a speedy, cost-effective and highly scalable vehicle for realizing the business values of this transformation. In his session at @DevOpsSummit at 19th Cloud Expo, Yung Chou, a Technology Evangelist at Microsoft, will present a unique opportunity to witness how Chef and Azure work tog...
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at EMC, will introduce a methodology for capturing, enriching and sharing data (and analytics) across the organizati...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
SYS-CON Events announced today that China Unicom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE F...
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?