DHL and IBM Partner on Quantum-Ready Warehouse Twins for Global Inventory Precision

Toward Precision Logistics with Quantum Digital Twins

DHL Supply Chain, the contract logistics arm of Deutsche Post DHL Group, took a forward-looking leap in August 2021 by entering into a development partnership with IBM’s quantum computing division. The goal: create quantum-enhanced digital twins of fulfillment centers to more precisely manage dynamic inventory flows.

As global e-commerce and omnichannel demand surges, warehouse operations have become the new frontier of logistics efficiency. DHL’s move reflects an industry-wide shift from static warehousing to real-time, adaptable, and intelligence-driven logistics environments—and now, quantum-augmented.

The Quantum Challenge in Inventory Forecasting

Inventory forecasting is a deceptively complex problem. It must simultaneously account for:

• Multi-SKU demand fluctuations

• Lead time variability across global supply lines

• Holding cost minimization vs. service level maximization

• Constraints in labor, racking, and space

These form NP-hard optimization problems, where classical AI and heuristics struggle under tight time windows and massive SKU combinations.

DHL’s goal was to prototype hybrid quantum algorithms capable of:

• Enhancing demand signal classification

• Optimizing pick-and-pack workflows dynamically

• Rebalancing inventory across facilities with lower error margins

Why IBM?

IBM brought to the table its Qiskit runtime environment, access to superconducting quantum processors, and expertise in hybrid algorithm design. DHL selected IBM due to:

• Its maturity in developing quantum machine learning (QML) models

• The Qiskit community’s rapid prototyping capabilities

• IBM’s cloud-based access to NISQ (Noisy Intermediate-Scale Quantum) devices for experimentation

The partnership leveraged DHL’s digital warehouse data and IBM’s QML stack to create test scenarios grounded in real operational KPIs.

Inside the Warehouse Twin Prototype

The joint development produced a quantum-enhanced digital twin of a DHL multi-client warehouse in the Netherlands. This facility served as a sandbox for evaluating how quantum models could improve the accuracy and agility of warehouse operations.

Key system features included:

1. Digital Thread Integration
   Warehouse management systems (WMS), IoT sensors, and transport management systems (TMS) fed real-time data into the twin, simulating location-level inventory and order flow.

2. Quantum-Enhanced Forecasting Engine
   A QML layer processed noisy, seasonal demand signals from multiple B2B clients. The model used quantum kernel methods to identify nonlinear patterns in demand surges that were elusive to classical regression models.

3. Order Batching Optimizer
   Variational quantum circuits were tested to minimize the total distance and picker workload for dynamic batch-picking scenarios, especially during peak season or flash sale fulfillment windows.

4. Replenishment Simulation
   Quantum routines ran simulations on restock policies, factoring supply chain delay probabilities and fulfillment SLAs across the broader European network.

Results from the August 2021 Pilot

While still early, DHL and IBM reported strong indications that hybrid quantum models could soon improve warehouse decision-making under uncertainty. Results included:

• Up to 18% improvement in demand forecast accuracy in volatile SKU categories compared to classical ARIMA and LSTM models.

• 7–10% reduction in average picker path length in dynamic batch-picking scenarios using variational circuits.

• Increased resilience of replenishment strategies to upstream delay simulations, owing to probabilistic modeling capabilities of quantum circuits.

Perhaps most notable was that these improvements were achieved without full quantum hardware scale. Most workloads ran on simulators or low-qubit devices—demonstrating quantum utility even in today’s NISQ era.

Strategic Fit: DHL’s Quantum Supply Chain Roadmap

DHL’s engagement with IBM fits into its broader “Resilience360” initiative, which emphasizes digital visibility, proactive disruption management, and predictive planning.

By experimenting with quantum-enhanced digital twins, DHL:

• Tests foundational capabilities for adaptive warehousing.

• Gains early insight into how quantum workflows integrate into logistics tech stacks.

• Develops internal skills and partnerships for future-scale quantum deployment.

In the longer term, DHL envisions quantum tools being embedded in:

• Real-time slotting and zoning operations

• Network-wide dynamic inventory positioning

• Carbon-aware fulfillment routing

Challenges and Road Ahead

The August 2021 pilot also highlighted constraints and next steps:

• Scalability: Current quantum hardware limits the number of SKUs and order combinations the models can handle. Approximate models and tensor network reductions help, but hardware growth is needed for full-scale deployment.

• Explainability: Interpreting why quantum models make certain recommendations remains a hurdle for adoption among warehouse planners.

• Skill development: DHL launched internal quantum literacy programs to ensure operations teams understand the benefits and limitations of QML.

IBM and DHL agreed to expand testing to two additional European fulfillment centers in 2022, with the goal of benchmarking quantum twin performance across different facility profiles and seasonal loads.

Conclusion: Warehouses as Quantum Innovation Labs

This August 2021 initiative by DHL and IBM highlights how logistics hubs are becoming fertile ground for quantum experimentation. Unlike the distant promise of universal quantum computers, hybrid quantum-enhanced digital twins offer tangible value in near-term warehouse planning and optimization.

As these experiments scale, they may catalyze a broader reimagining of supply chain resilience—one driven not only by automation and AI, but by the probabilistic power of quantum thinking.