Resilient remanufacturing networks: forecasting, informatics and holons

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The value of remanufacturing is estimated at £2.4B to the UK economy, potentially increasing to £5.6B in the near future. The entire process relies upon the timing, quantity and quality of the returned items (cores), and yet there have been no studies to-date that look at returns forecasting and how such forecasts can be integrated in a systemic way with inventory and production optimisation (IPO) procedures. Such procedures are stepping-stones towards financial, environmental and societal sustainability. If supported, this is the first study to look at these issues and therefore would make a considerable contribution to the theory and practice of remanufacturing in the UK.Our vision is to create a sustainable and resilient world where remanufacturers and their closed-loop supply networks have 'visibility' of product returns and reflect such information into circular economy (CE) compatible IPO to improve sustainability and resilience. In a remanufacturing context, the bill of materials loses its original meaning, and greatly depends on the state of the returned-used items. This introduces a need to forecast not only the timing and volume of the returns, but also their quality, in order to decide: i) what parts need to be replaced for the item to be restored to the desired state? ii) which usable parts can be fed back into the manufacturing process when restoring the item is not economically or practically viable? Rate of returns is expected to strongly correlate to the number of items in use and the stage in the item's life cycle. In-use product data, service information and judgmental inputs should also have explanatory power while time series effects, e.g. seasonality, may also be present. The above make the utilisation of classic demand forecasting methods impossible, calling for novel estimation approaches. Despite the obvious importance of returns forecasting in a CE context, the relevant literature is extremely limited. Further, the uncertainty associated with returns does not imply that the classic demand uncertainty for (re)manufactured products is not present, leading to what may be termed a 'two-tailed uncertainty'! Critically, the foregoing forecasting problems translate into systemic IPO challenges. A growing body of literature looks at inventory and/or production problems in closed-loop supply chains. Interestingly though, all these works are conditioned to no uncertainty with regard to returns and thus no need to forecast them, obviously diminishing the practical utility of these solutions. Integrating returns and demand forecasting with IPO requires a holonic approach, not previously attempted. A holon is an element that is both a whole in its own right but also part of a wider system - for example, in any organisation each department may establish its own strategic priorities but potentially they could act in conflict with each other if there is no general higher level organisation strategic direction to optimise their interactions. Hence, each different forecasting protocol, inventory controller and production ordering rule has its own dynamic properties but which, when integrated in different combinations, creates a new whole that may not be the simple addition of the different parts. Therefore, we will develop appropriate forecasting protocols and integrate them into IPO through systems modelling.Inventory and production optimisation in the CE are stepping-stones towards: i) immense inventory reductions and space liberation, resulting in reduced supply chain costs and cheaper, more affordable products in the market (financial sustainability); ii) reduced obsolescence risk for materials, parts and finished items, with huge implications for environmental sustainability; iii) greater availability of remanufactured products, creating a more ethical marketing channel to consumers (societal sustainability).