South Korea’s Hyundai Mobis Trials Quantum Optimization in Incheon Logistics Hub
February 3, 2023
On February 3, 2023, Hyundai Mobis—the automotive logistics and parts manufacturing division of Hyundai Motor Group—formally kicked off a pilot project to optimize warehouse and distribution operations at its Incheon logistics hub using quantum-inspired computing.
This initiative marks South Korea’s most ambitious integration of quantum optimization into the live automotive supply chain, signaling the country’s intent to become a competitive player in applied quantum logistics.
The Incheon facility serves as a major node for distributing components such as electric drive units, battery systems, and infotainment modules to over 120 assembly lines across East Asia. The challenges are multifaceted:
Managing fluctuating demand from EV and hybrid vehicle assembly plants
Dynamic storage allocation within dense urban facilities
Coordinating part dispatch across sea, air, and rail modes
Using classical tools, optimization windows could take 6 to 12 hours to compute during high-demand cycles. Hyundai Mobis, seeking to reduce latency and improve real-time responsiveness, partnered with:
ETRI, which provided quantum optimization algorithms and integration support
Qunova Computing, a Seoul-based quantum startup focused on hybrid logistics modeling
The pilot project utilized quantum annealing models executed on simulators designed to mirror D-Wave’s Advantage architecture. By translating Hyundai’s scheduling and warehousing problems into Quadratic Unconstrained Binary Optimization (QUBO) format, the joint team aimed to solve:
Vehicle routing problems (VRP)
Storage bin packing
Delivery time window compliance
Initial testing demonstrated:
28% reduction in pick-path travel distance within the warehouse
19% decrease in order fulfillment lag time
40% reduction in SKU relocation events per day
The key advantage was the ability to re-run optimization cycles every 10 minutes, compared to 4–6 hours using legacy tools.
The Hyundai Mobis pilot is supported under the Korean Quantum Economy Roadmap (2022–2031), a $2.5 billion initiative to stimulate applied quantum R&D. This roadmap prioritizes:
Development of homegrown quantum algorithms for logistics and security
Industrial adoption in key sectors including automotive, semiconductors, and shipping
Building sovereign quantum cloud access for public-private collaboration
Dr. Kim Tae-hyun, Director of Quantum Systems at ETRI, noted:
“This project demonstrates that quantum algorithms can now solve real supply chain bottlenecks—not just theoretical models. The future of logistics is adaptive, dynamic, and quantum.”
Hyundai Mobis’ lean manufacturing model is highly sensitive to delay, especially with electric vehicles (EVs) where parts are highly modular and shipped from dispersed suppliers. The quantum optimization engine was configured to simulate:
Worst-case traffic delays
Sudden EV battery demand surges
Container slot shortages at Busan port
By modeling these disruptions in real time, the system dynamically adjusted delivery priorities, container sequencing, and warehouse routing. This proved critical in reducing excess inventory buildup and JIT misalignments during the Lunar New Year logistics crunch.
Though still in pilot mode, Hyundai Mobis reported notable improvements in:
Warehouse throughput rate (up by 15%)
Carrier turnaround time (cut by 22%)
Inventory turnover ratio (increased by 9% quarter-over-quarter)
The company also flagged a potential $2.8 million annual savings if the quantum optimization engine is deployed across all five Korean logistics hubs.
If the pilot continues to yield performance gains, Hyundai Mobis is expected to:
Integrate quantum optimization into its Mobis Logistics Control Tower software by Q4 2023
Launch international pilots at facilities in Chennai, India and České Budějovice, Czech Republic
Develop a native Korean-language QUBO compiler in partnership with Qunova to expand SME adoption
South Korea’s growing investment in quantum logistics mirrors trends in neighboring countries:
China is advancing cold chain optimization using quantum routing at JD Logistics
Japan’s Hitachi is working on quantum AI models for predictive maintenance
Singapore is testing quantum-secured logistics corridors for pharmaceuticals
By being the first to test quantum annealing in live warehouse operations, Hyundai Mobis is positioning South Korea as a regional innovation leader in next-generation supply chain resilience.
This February 3 pilot highlights Hyundai Mobis’s strategy to align quantum innovation with operational excellence. As global supply chains grow more volatile, the ability to simulate and optimize logistics decisions in near real time will become a defining advantage.
Quantum optimization, while still in its early days, is proving it can deliver measurable value—even without error-corrected qubits. For Hyundai Mobis and South Korea at large, the future of logistics may well be written in quantum code.