Professional Documents
Culture Documents
PERSONAL INFORMATION
Name: Hu Junfei
Nationality: Chinese (Singapore Permanent Residence)
Contact Number: +65 96165232 (FRS) Future Resilient Systems
Contact Email: hujunfei@nus.edu.sg
Singapore-ETH Centre
Correspondence Address: BLK E1A #05-19, SMALab, ISE, NUS,119260 FRS Project Leader
EDUCATION BACKGROUND 2015 M.-A. Cardin. All rights reserved 1 CREATE Way 2
#06-01 CREATE Tower
Doctor of Philosophy 2008
Singapore present
138602
Mission
To develop theory of real options and flexibility
in the design, architecture, evaluation, and
management of complex engineering systems
Keywords: conceptual design, design theory and methodology, systems design, systems
engineering, uncertainty analysis
1 Introduction systems. The literature from real options analysis provides analyt-
ical tools to assess the value of flexibility quantitatively, allowing
This paper presents a five-phase taxonomy of systematic proce-
for objective evaluation of systems design concepts. Combining
dures to enable flexibility in the design and management of engi-
the two literatures provides an extensive and complementary tool-
neering systems operating under uncertainty. It has the dual goal
kit to create better performing systems. The ideas exposed in this
of providing a review of the latest contributions in this field, and
paper are inspired from this unique perspective.
organizing existing procedures into a cohesive design framework.
The paper proposes the notion of a flexible systems design con-
The taxonomy is geared specifically for engineering systems, in
cept to describe a design concept that provides an engineering sys-
particular complex systems in the aerospace, defense, energy,
tem with the ability to adapt, change and be reconfigured, if
housing, telecommunication, and transportation industries. Such
needed, in light of uncertainty realizations. It is different concep-
systems are characterized by a high degree of technical complex-
tually from a robust design concept, which makes systems func-
ity, social intricacy, and elaborate processes fulfilling important
tions more consistent and invariant to changes in the environment,
functions in society [1]. They are long-lived (20 yr), require
manufacturing, deterioration, and customer use patternsinspired
large irreversible investments, will inevitably face much uncer-
from the definition in Ref. [6]. A flexible systems design concept
tainty over their useful lifetime, and have a significantly large
is typically comprised of two components: (1) a strategy, and (2)
RESEARCH OVERVIEW
number of design variables and parameters. Dynamic socio-
an enabler in design and management. A strategy is similar con-
technical elements like markets, operational environment, regula-
ceptually to the definition of a real option on systems by Wang
tions, and technology play a significant role in their success and
and de Neufville [7], also referred as real option types by
failure [2]. Crucial decisions have to be made in early conceptual
Mikaelian et al. [8]. These can refer for instance to strategies sug-
design phases, regarding long-term strategic deployment and
gested by Trigeorgis [5]like abandonment, capacity expansion/
operations.
reduction, switching inputs/outputs, deferring investments, etc.
This paper builds upon the definition of flexibility in systems
to provide the system with better flexibility. A strategy represents
engineering and design enabling a system to change easily in the
the aspect of the design concept that captures flexibility, or how
face of uncertainty considering technical and technological
the system is designed to adapt to changing circumstances. The
standpoints [3,4]. It also builds upon the definition of a real
concept of enabler is similar to the definition of real option in
option, which provides the right, but not the obligation, to change
systems by Wang and de Neufville [7], or mechanism by
a system in the face of uncertainty [5]. The literature from
Mikaelian et al. [8]. It represents what is done to the physical
engineering provides tools to help generate flexibility in complex
infrastructure design and management to provide and use the
flexibility in operations. Enablers take a different form for each
Contributed by the Design Theory and Methodology Committee of ASME for
publication in the JOURNAL OF MECHANICAL DESIGN. Manuscript received September
system, depending on the flexibility strategy selected.
24, 2012; final manuscript received October 1, 2013; published online November 7, The following examples provide intuition on why flexibility
2013. Assoc. Editor: Irem Y. Tumer. is a worthwhile design paradigm. The Health Care Service
- Binomial Lattice
1. Baseline!
- Decision Analysis Design!
- Simulations
- Bayesian Theory
- Dempster-Shafer Theory
- Possibility Theory
4. Design ! - Probability Theory
5. Process! 2. Uncertainty! - Statistical Analysis
Space!
Management! Recognition! - Binomial Lattice
Exploration! - Decision Tree
- Diffusion Model
- Scenario Planning
Computationally Efficient Search
- Design Catalogs
- Decision-Based Design 3. Concept!
- MATE Generation!
- Screening Methods
ORIGINAL PAPER
Received: 16 December 2013 / Revised: 12 February 2015 / Accepted: 12 February 2015 / Published online: 5 March 2015
! Springer-Verlag London 2015
Abstract Designing an engineering system that is both application of the proposed methodology through the ana-
environmentally and economically sustainable is a chal- lysis of a waste-to-energy technology in Singapore based on
lenging task. Designers need to cope with socio-technical anaerobic digestion. Results show that the expected net
uncertainties and design systems to provide high perfor- present value of the flexible design concepts provides more
mance during long lifecycles. Flexibility in engineering than 10 % improvement over a fixed benchmark design in
design provides ways to address such challenges by making terms of economic lifecycle performance. This design is
engineering systems changeable in the face of uncertainty. It conducive of better economic sustainability via additional
is difficult, however, to identify suitable system elements for power generation and better use of resources. Results also
designing flexibility, especially when subjected to multiple indicate that the flexible design can reduce downside risks
sources of uncertainty and complex interdependency be- and capitalize on upside opportunities significantly.
tween socio-technical and systems elements. This paper
considers embedding flexibility into the engineering design Keywords Sustainability ! Uncertainty management !
as a mechanism to ensure better sustainability and to im- Flexibility in engineering design ! Waste-to-energy
prove economic performance in long-term lifecycles. The system ! Real options analysis ! Change propagation
main contribution is a novel methodology to identify valu-
able opportunities to embed flexibility as a way to deal pro- Abbreviations
actively with uncertainty in market and environment. The AD Anaerobic digestion
proposed methodology integrates Bayesian network into ADOS Anaerobic digestion of organic slurry
engineering system design to effectively model complex BN Bayesian network
change propagation in the flexibility identification process. CPA Change propagation analysis
It helps structure concept generation activities by identify- CPI Change propagation index
ing candidate areas to embed flexibility in the system. It CPM Change prediction method
compares favorably to other concept generation methods DCF Discounted cash flow
(e.g., prompting, brainstorming) that require modeling and DSM Design structure matrix
PHASE 3:
evaluation of a large number of concepts generated in order ENPV Expected net present value
to identify the ones offering better performance. It differs ESM Engineering system matrix
from other flexibility enabler identification methods by GBM Geometric Brownian motion
considering indirect as well as direct dependencies, in ad- IRF Integrated real options framework
dition to the probabilistic nature and risk resulting from Logical-MDM Logical multiple domain matrix
possible changes. Another contribution is the demonstration NPV Net present value
ROA Real option analysis
J. Hu ! M.-A. Cardin (&) RSI Risk susceptibility index
CONCEPT GENERATION
Department of Industrial and Systems Engineering, National
TPD Ton per day
University of Singapore, Block E1A, #06-25, 1 Engineering
Drive 2, Singapore 117576, Singapore VOF Value of flexibility
e-mail: macardin@nus.edu.sg WTE Waste-to-energy
123
Systematic Methodology
as system-level dependencies and the cost of changing
from one state of design to another, the potential flexibility
scratch for flexibil
large, with many p
become easily intr
lution and trying
determine the initia
lows designers to s
know and have exp
from the design of
performance follow
Once a baseline
techniques can be u
discounted cash fl
simulation and com
for example: It is c
cost and revenue c
DCF model is ana
point forecasts of
demands and requi
sent value (NPV) li
Fig. 1 Summary of proposed methodology to generate flexibility in design concept is c
2015 M.-A. Cardin. All rights reserved 10
engineering systems design better lifecycle pe
to these child nodes downstream due to a change in system node B is a fixed design for V6 engine initially (e.g., BV6 ).
element si upstream and finally avoid this risk in the initial Given node A changes, node B has a high probability to
design phase. The risk generated by system element si can change to accommodate a V8 engine (e.g., BV6 changes to
be calculated as: BV8 ). If the cost of change for node B (i.e., cost for
RGenerated
si
X
Risk Susceptibility Index
Psj jsi ;8uj 2U # Psj j8uj 2U Csj
sj 2Dsi
3
changing BV6 to BV8 ) is also high, this means node B has
high RReceived . It motivates designers to consider an ad-
vanced design (e.g., flexibility or robustness) for node B in
Here, sj represents a child node of system element si, the initial stage, with the goal of reducing cost of change in
si = sj, Dsi is a set of system elements that contains all of the future. To further determine whether node B is suitable
the child nodes of system element si , Psj jsi ;8uj 2U is the for flexibility or robustness, risk susceptibility RGenerated
posterior conditional probability of a change in system should be analyzed and node B is considered as an internal
element sj given a change in system element si ; and source of uncertainty.
Psjj 8uj 2U is the posterior conditional probability of a change
Reveived
in system element sj only subject to the external uncer-
tainties. The subtraction here represents the increased Robustness System elements
R
Flexibility
probability of child node (sj) changing due to the effect of High
changing the parent node si . A large difference between the
probabilities means that given the new information from
parent node si (e.g., the parent node si will be changed with Low Fixed Design
Robustness
100 % probability), the probability for changing the child
node sj has been significantly increased and the child node
sj becomes more likely to change. Variable RGenerated si Low High RGenerated
indicates the degree of risk generated by a change in sys-
RSI
temSi element si under uncertainty U.
Fig. 3 Risk susceptibility of system element
123
2015 M.-A. Cardin. All rights reserved 11
Application: Anaerobic Digestion
Waste-to-Energy (WTE) System
Source: www.keppelseghers.com
2015 M.-A. Cardin. All rights reserved 12
The impurity portion is then sent to incineration plants. The
separated wastes are mixed with circulate material from 4.1 Step 1: Initial design
digesters, which are then pumped into the digesters. During
the digestion process, bio-gas is produced and stored in Based on the procedure described in Sect. 3, a model is
Major Tankage
Food Waste
Tipping Floor Electricity
Gas Holder Gas Engine Power Grid
Waste Collector
Gas
Bag Breaker Waste
Digester Flaring and Odor
Control
Fresh Circulate Digested
Waste Material Waste
Screener
Pre-processing Residue
Equipments Mixer Screw Press Compactor and
Containers
Impurity
Post-processing
Pumps Equipments Residues
Main Equipments
Incineration
Plants
Anaerobic Digestion general process flow
Fig. 5 General process flow for anaerobic digestion plants
System Stake-
Objective Functions Objects
EngineeringESM
System Matrix drivers holders
S1 S2 S3 T1 T2 T3 O1 O2 O3 F1 F2 F3 F4 B1 B2 B3 B4 B5 B6 B7 B8 B9
Total amount of organic waste (S1)
System drivers Organic waste recycling rate (S2)
Organic waste moisture content (S3)
Government's strategy (T1) 0.6 0.6 0.6 0.3
Stakeholders Public behavior (T2) 0.6
Waste-to-energy company (T3) 0.9
Eliminate land use (O1) 0.6 0.6 0.9 0.6
Objectives Maximize waste to energy generation rate (O2) 0.9 0.9
Achieve a clear and safety environment (O3) 0.9 0.3 0.9
Waste sorting mechanism (F1) 0.6 0.6
Waste volume reduction (F2) 0.6
Functions
Power generation(F3) 0.6
Emission control (F4) 0.6
General site works (B1)
Tipping floor and new buildings (B2) 0.6 0.6
Main equipment (B3) 0.6 0.6 0.9
Pre-processing equipment (B4) 0.6 0.6 0.6 0.9
Objects Post processing equipment (B5) 0.9 0.9
Major tankage (B6) 0.6 0.6 0.9
Power generation control (B7) 0.6 0.6
Residue compactor and containers (B8) 0.9
Flaring and odor control (B9) 0.6 0.6
best performance is then selected and referred as the where Qte is the total amount of electricity (KWh) available
Author's personal copy
Stochastic Process
Res Eng Design (2015) 26:121143
probability of each
Bayesian network (
about the cost show
can be quantitativel
the system compo
example, the poste
and the normalized
Eq. (2), the RReceiv
lated as 0.33. Since
not impact other sy
tionships as seen in
0 according to Eq.
process equipment
summarizes the ra
component. It sugg
floor and equipmen
Fig. 7 GBM simulation
2015of future
M.-A. generated
Cardin. organic wastes (5 out of
All rights reserved
tankage16
have the t
2000 runs) selected as valu
Main Equipment (B3) Major Tankage (B6)
EliminateLandUse
HigherRequirement 99.2 MaxEnergyGenerationRate AchieveClearEnvironment EmissionControl
CurrentRequirement 0.79 HigerRequirement 91.8
HigherRequirement 92.1 HigherRequirement 55.3
CurrentReuirement 8.18 CurrentRequirement 7.86 CurrentRequirement 44.7
WasteSortingMechanism
WasteVolumeReduction PowerGenerationService
HigherRequirement 81.8
CurrentRequirement 18.2 HigherRequirement 59.5 HigherRequirement 55.1
CurrentRequirement 40.5 CurrentRequirement 44.9
TippingFloorNewBuildings PreprocessEquipment
MajorTankage
CapacityExpansion 84.0 AdvancedFacilityCapacityExp 98.2
CapacityExpansion 96.1
CurrentCapacity 16.0 CurrentState 1.77
CurrentCapacity 3.90
PowerGenerationControl
FlaringAndOdorControl
AdvancedFacilityCapacityExp 68.3
AdvancedFacility 68.6
MainEquipment CurrentState 31.7 CurrentFacility 31.4
AdvancedFacilityCapacityExp 96.5 PostProcessingEquipment
CurrentState 3.47 ResidueCompactor
CapacityExpansion 97.5
CurrentCapacity 2.48 CapacityExpansion 86.5
CurrentCapacity 13.5
Concept Generation
ms and types.
resources
onal funds
s view).
s multiple 2015 M.-A. Cardin. All rights reserved
Source: Mikaelian et al. (2011)
19
employees Fig. 7. Examples of mechanisms and types across the enterprise views.
Real Options
Capacity expansion (both for tipping floor and
major tankage)
Start with 400 tpd
Expand by 200 tpd organic waste in previous year
> installed capacity, up to 800 tpd
portfolio theory in
versus return trade
comes is used as a
As illustrated in
be grouped into th
return and high-ris
3 and the benchm
are designed with
stage. Compared w
cept 3 has a slight
indicates that only
with the uncertain
provement, but th
cludes mid-range
(i.e., design conce
proved ENPV sinc
Fig. 11 ENPV versus 2015
standard deviation plot for the eight design
M.-A. Cardin. All rights reserved mitigated
23 by only e
concepts with design concep
er; a zero CPI indi- Pre-processing equipment (e.g., screen 1 0 -1 A
equipment)
a negative number
Residue compactor and containers 1 0 -1 A
The multipliers that
Sensitivity Analysis
Post- processing equipment 2 0 -2 A
ived are suggested (e.g., screw presses)
VOF changes as each volatility the proposed tool in the analysis of a WTE infrastructure
This article has been accepted for inclusion in a future issue of this journal. Content is final as presented, with the exception of pagination.
AbstractThis paper presents the results of an empirical study base of three million subscribers. Unfortunately, demand grew
of training procedures enabling flexibility in the design and man- much slower than anticipated, and the company was soon
agement of large-scale engineering systems. The work relies on unable to honor debt payments on the US$4 billion devel-
the development and use of a simulation game environment
to study decision-making dynamics under different treatment opment costs. By the early 2000s, the company had to file for
conditions. Evaluation of short-term, long-term, and in-game bankruptcy [1].
training is completed to assess the main and interaction effects de Weck et al. [2] showed later that flexibility in design
on quantitative lifecycle performance indicators, and qualitative and management of Iridiumdefined as the ability to change
user impressions. Forty-six graduate engineering students par- the system easily in the face of uncertainty [3]could have
ticipated in controlled experiments where they worked on the
design and management of a flexible emergency medical services saved up to 20% in expected lifecycle cost, perhaps even sav-
system. Results show that in-game training produces a statis- ing the technological venture from bankruptcy. The idea was
tically significant improvement on lifecycle performance score, to design each satellite so it can be redeployed in orbit as
while long-term flexibility training significantly reduces decision- required coverage increases, and stage capacity deployment of
making time. In-game training improves process satisfaction. the constellation gradually as demand grows (i.e., start with
Both short-term and in-game training lead to improved satis-
faction with the results, and contribute to improved anticipated fewer satellites, and add more as demand grows while recon-
quality of the results. Correlation studies suggest that participants figuring the constellation in space to cover changing demand
taking more time for decision-making may improve lifecycle per- areas). This contrasts with a strategy of optimizing design
formance scores. Lifecycle score improvement also increases as and capacity deployment in view of deterministic (and per-
satisfaction with the process and anticipated quality of results haps optimistic) demand forecasts, which may lead to a more
increase. Experimental results show that different training pro-
cedures produce different effects on design and management rigid design solution.
decision-making for flexible engineering systems operating under The Iridium case is an extreme illustration of a tension in
uncertainty. They provide further insights to support the devel- standard design and management practice for large-scale engi-
opment and evaluation of novel training approaches useful for neering systems, explored for some time in [4][6]: is it best
systems engineering practice and education. to invest in design flexibility early to provide better adapt-
Index TermsComputer simulation, decision making, large- ability in the view of an uncertain future, or to design the
scale systems, risk analysis, systems analysis and design, systems system optimally for a particular view of the future? The for-
engineering education. mer approach may require additional costs upfront, which may
be lost if the flexibility is not used. The latter may reduce
I. I NTRODUCTION upfront cost, but will expose the system to sub-optimal per-
O N May 1997, the first five satellites of the Iridium formance if forecast conditions do not materialize, and may
constellation were launched successfully in space. This require more costs to adapt.
large-scale engineering system was meant to revolutionize The Iridium system is an example of engineering sys-
PHASE 5: PROCESS
wireless communications by offering satellite-based phone ser- tems, defined broadly as socio-technical artifacts fulfilling
vices almost anywhere on the planet. By September 1998, the important functions for society for healthcare, power gener-
66 satellite infrastructure was fully launched. Rapid deploy- ation and supply, telecommunications, transportation, etc. [7].
ment was needed to accommodate an anticipated customer Such large-scale systems typically operate for a long-time,
and will inevitably face a wide range of changing condi-
Manuscript received July 14, 2014; revised October 28, 2014; tions over their useful life in terms of market environment,
accepted December 14, 2014. This work was supported by the National
University of Singapore Faculty Research Committee via MOE AcRF regulations, and technology. Yet, standard approaches to sys-
Tier 1 under Grant WBS R-266-000-067-112, Grant R-266-000-061-133, and tems analysis and design often focus on optimizing design
Grant R-266-000-079-112. This paper was recommended by Associate Editor and management under deterministic conditions. These may
W.-K. V. Chan.
not fully account for the impact of uncertainty on lifecycle
MANAGEMENT
The authors are with the Department of Industrial and System
Engineering, National University of Singapore, Singapore 117576 (e-mail: performance, and the potential value of flexibility. As seen in
macardin@nus.edu.sg). the Iridium case, such approaches may give rise to engineer-
Color versions of one or more of the figures in this paper are available
online at http://ieeexplore.ieee.org. ing systems that are rigid and cannot cope well with changing
Digital Object Identifier 10.1109/TSMC.2015.2392072 conditions.
2168-2216 c 2015 IEEE. Personal use is permitted, but republication/redistribution requires IEEE permission.
See http://www.ieee.org/publications_standards/publications/rights/index.html for more information.
Step 2:
2. Computer Model Computer
Model
Step 3:
3. Simulation Game Simulation
Game
Step 4:
4. Data Collection Data
Collection
Step 5:
5. Statistical Analysis Statistical
Analysis
Source: therealsingapore.com
Source: livinginsingaporetoday.com
Response time
2015 M.-A. Cardin. All rights reserved 31
Step 3: Simulation Game
Define the problem scope; identify Identify key sources of Identify appropriate
! !!!
Stochastic and the robust optimization for real decision rule is
main cost and revenue drivers; uncertainty flexible strategies
!
define design variables and input
parameters !!! !!! !! !! ! ! , !! denote total profit. The problem of choosing an optimal
options analysis in energy, emergency
Generate different Embed corresponding
uncertainty scenarios decision rules
Step 1:
Develop a deterministic then:
quantitative performance model
Step 2:
Develop a quantitative
services,
(b)
and transportation systems
(a)
performance model under
uncertainty
! !
Computational framework for simulation- max
Figure 10: Kriging meta-model for ENPV and standard deviation 2000
Step 3:
! r !! ! , ! = !!
Develop a quantitative
performance model for !!! !! !!! , !!! (6)
!scenarios
based optimization in oil and gas and
flexibility analysis
!
!!! !!!
Figure 2: Problem modeling phase for flexibility and uncertainty analysis (Phase 1)
!! ! (9)
2015 M.-A. Cardin. All rights reserved 36
where! is a subset of!!, the variables with superscript ! correspond to the variables in scenario !.
Conclusions
Standard design and architecture practice may not account well for
uncertainty and flexibility in complex engineering systems
Need empirical work to determine which procedures are most suitable for
real-world use