SYS-CON MEDIA Authors: Pat Romanski, Elizabeth White, Yeshim Deniz, Glenn Rossman, Cynthia Dunlop

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.

@CloudExpo Stories
SYS-CON Events announced today that SOA Software, an API management leader, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. SOA Software is a leading provider of API Management and SOA Governance products that equip business to deliver APIs and SOA together to drive their company to meet its business strategy quickly and effectively. SOA Software’s technology helps businesses to accel...
SYS-CON Events announced today that Utimaco will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Utimaco is a leading manufacturer of hardware based security solutions that provide the root of trust to keep cryptographic keys safe, secure critical digital infrastructures and protect high value data assets. Only Utimaco delivers a general-purpose hardware security module (HSM) as a customiz...
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic • Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff hap...
SYS-CON Events announced today that ElasticBox is holding a Hackathon at DevOps Summit, November 6 from 12 pm -4 pm at the Santa Clara Convention Center in Santa Clara, CA. You can enter as an individual or team of up to 10 developers. A New Star Is Born Every Month! All completed ElasticBoxes will then be sent to a judging panel - 12 winners will be featured on the ElasticBox website in 2015. All entrants will receive five full enterprise licenses for one year + ElasticBox headphones + Elasti...
Once the decision has been made to move part or all of a workload to the cloud, a methodology for selecting that workload needs to be established. How do you move to the cloud? What does the discovery, assessment and planning look like? What workloads make sense? Which cloud model makes sense for each workload? What are the considerations for how to select the right cloud model? And how does that fit in with the overall IT tranformation? In his session at 15th Cloud Expo, John Hatem, head of V...
Cloud services are the newest tool in the arsenal of IT products in the market today. These cloud services integrate process and tools. In order to use these products effectively, organizations must have a good understanding of themselves and their business requirements. In his session at 15th Cloud Expo, Brian Lewis, Principal Architect at Verizon Cloud, will outline key areas of organizational focus, and how to formalize an actionable plan when migrating applications and internal services to...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, will discuss how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP ...
Ixia develops amazing products so its customers can connect the world. Ixia helps its customers provide an always-on user experience through fast, secure delivery of dynamic connected technologies and services. Through actionable insights that accelerate and secure application and service delivery, Ixia's customers benefit from faster time to market, optimized application performance and higher-quality deployments.
SYS-CON Events announced today that Calm.io has been named “Bronze Sponsor” of DevOps Summit Silicon Valley, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Calm.io is a cloud orchestration platform for AWS, vCenter, OpenStack, or bare metal, that runs your CL tools puppet, Chef, shell, git, Jenkins, nagios, and will soon support New Relic and Docker. It can run hosted, or on premise and provides VM automation / expiry, self-service portals,...
In her General Session at 15th Cloud Expo, Anne Plese, Senior Consultant, Cloud Product Marketing, at Verizon Enterprise, will focus on finding the right mix of renting vs. buying Oracle capacity to scale to meet business demands, and offer validated Oracle database TCO models for Oracle development and testing environments. Anne Plese is a marketing and technology enthusiast/realist with over 19+ years in high tech. At Verizon Enterprise, she focuses on driving growth for the Verizon Cloud pla...
SYS-CON Events announced today that Aria Systems, the recurring revenue expert, has been named "Bronze Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue bu...
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce t...
As Platform as a Service (PaaS) matures as a category, developers should have the ability to use the programming language of their choice to build applications and have access to a wide array of services. Bluemix is IBM's open cloud development platform that enables users to easily build cloud-based, creative mobile and web applications without having to spend large amounts of time and resources on configuring infrastructure and multiple software licenses. In this track, you will learn about the...
Blue Box has closed a $10 million Series B financing. The round was led by a strategic investor and included participation from prior investors including Voyager Capital and Founders Collective, as well as the Blue Box executive team. This round follows a $4.3 million Series A closed in December of 2012 and led by Voyager Capital. In May of this year, the company announced general availability of its private cloud as a service offering, Blue Box Cloud. Since that release, the company has dem...
SYS-CON Events announced today that Verizon has been named "Gold Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Verizon Enterprise Solutions creates global connections that generate growth, drive business innovation and move society forward. With industry-specific solutions and a full range of global wholesale offerings provided over the company's secure mobility, cloud, strategic network...
SimpleECM is the only platform to offer a powerful combination of enterprise content management (ECM) services, capture solutions, and third-party business services providing simplified integrations and workflow development for solution providers. SimpleECM is opening the market to businesses of all sizes by reinventing the delivery of ECM services. Our APIs make the development of ECM services simple with the use of familiar technologies for a frictionless integration directly into web applicat...
The only place to be June 9-11 is Cloud Expo & @ThingsExpo 2015 East at the Javits Center in New York City. Join us there as delegates from all over the world come to listen to and engage with speakers & sponsors from the leading Cloud Computing, IoT & Big Data companies. Cloud Expo & @ThingsExpo are the leading events covering the booming market of Cloud Computing, IoT & Big Data for the enterprise. Speakers from all over the world will be hand-picked for their ability to explore the economic...
Cloudwick, the leading big data DevOps service and solution provider to the Fortune 1000, announced Big Loop, its multi-vendor operations platform. Cloudwick Big Loop creates greater collaboration between Fortune 1000 IT staff, developers and their database management systems as well as big data vendors. This allows customers to comprehensively manage and oversee their entire infrastructure, which leads to more successful production cluster operations, and scale-out. Cloudwick Big Loop supports ...
To manage complex web services with lots of calls to the cloud, many businesses have invested in Application Performance Management (APM) and Network Performance Management (NPM) tools. Together APM and NPM tools are essential aids in improving a business’s infrastructure required to support an effective web experience… but they are missing a critical component – Internet visibility. Internet connectivity has always played a role in customer access to web presence, but in the past few years use...