Flexibility in Engineering Design
Event details
| Date | 07.03.2014 |
| Hour | 12:15 › 13:15 |
| Speaker | Prof. Richard de Neufville (MIT) |
| Location |
GC B330
|
| Category | Conferences - Seminars |
Flexibility in Design is an effective way to manage uncertainty. It enables system managers to adapt to evolving environments, to avoid bad situations and take advantage of emerging good opportunities.
The approach is strategic. It views systems management as a dynamic process in which designers necessarily add or change capacities and capabilities over time. As in chess, the key to success lies in positioning the system to provide valuable options. Flexibility in design is most desirable when the future is most uncertain, exactly when options are most valuable.
Flexibility in Design contrasts with Robust design. Rather than minimize the variation of future system performance, Flexibility in Design redistributes the variation in performance, reducing the downside possibilities while maximizing upside potential.
The presentation outlines the process of achieving Flexible Designs, and demonstrates its operation and value through examples. The analysis maximizes overall expected system value. It starts with explicit recognition of underlying uncertainties – in sharp contrast to conventional systems design based on fixed system requirements. The process explores the distribution of possible outcomes associated with alternative design concepts, generally by Monte Carlo simulations.
Example applications indicate that Flexibility in Design routinely leads to 10 to 30% increases in expected value. The intuition is that it guards against the highest risks (a win), enables taking advantage of new opportunities (more win), while frequently reducing immediate capital costs (by deferring decisions on capacity and function). The net effect in general is: more wins at lower cost!
Bio: Dr. Richard de Neufville is Professor of Engineering Systems and of Civil and Environmental Engineering at MIT. He specializes in Systems Analysis and Design of major infrastructure. His work now focuses on flexibility in technological systems. This is logically equivalent to using “real options”, but in engineering the analysis differs substantially from that of financial options. This approach implies a fundamental shift in engineering design, from a focus on fixed specifications, to a concern with system performance under the range of possible risks and opportunities. He has worked widely – geographically and substantively -- on many projects, including hydropower, oil platforms, copper mines, and his substantive specialty, airports. He is author of Flexibility in Engineering Design (MIT Press, 2011), Airport Systems Planning, Design and Management, (McGraw-Hill, 2nd edition, 2013); Applied Systems Analysis (McGraw-Hill) and other texts. Numerous prizes have recognized his work, including the Sizer Award for the Most Significant Contribution to MIT Education for having founded and led the MIT Technology and Policy Program. He has an MIT PhD and a Delft Dr.Hc. Born in the United States, he enjoyed 7 years of school in Switzerland. Prof. de Neufville is a CRAG (EPFL Center on Risk Analysis and Governance) visiting professor at the Laboratory of Hydraulic Construction.
The approach is strategic. It views systems management as a dynamic process in which designers necessarily add or change capacities and capabilities over time. As in chess, the key to success lies in positioning the system to provide valuable options. Flexibility in design is most desirable when the future is most uncertain, exactly when options are most valuable.
Flexibility in Design contrasts with Robust design. Rather than minimize the variation of future system performance, Flexibility in Design redistributes the variation in performance, reducing the downside possibilities while maximizing upside potential.
The presentation outlines the process of achieving Flexible Designs, and demonstrates its operation and value through examples. The analysis maximizes overall expected system value. It starts with explicit recognition of underlying uncertainties – in sharp contrast to conventional systems design based on fixed system requirements. The process explores the distribution of possible outcomes associated with alternative design concepts, generally by Monte Carlo simulations.
Example applications indicate that Flexibility in Design routinely leads to 10 to 30% increases in expected value. The intuition is that it guards against the highest risks (a win), enables taking advantage of new opportunities (more win), while frequently reducing immediate capital costs (by deferring decisions on capacity and function). The net effect in general is: more wins at lower cost!
Bio: Dr. Richard de Neufville is Professor of Engineering Systems and of Civil and Environmental Engineering at MIT. He specializes in Systems Analysis and Design of major infrastructure. His work now focuses on flexibility in technological systems. This is logically equivalent to using “real options”, but in engineering the analysis differs substantially from that of financial options. This approach implies a fundamental shift in engineering design, from a focus on fixed specifications, to a concern with system performance under the range of possible risks and opportunities. He has worked widely – geographically and substantively -- on many projects, including hydropower, oil platforms, copper mines, and his substantive specialty, airports. He is author of Flexibility in Engineering Design (MIT Press, 2011), Airport Systems Planning, Design and Management, (McGraw-Hill, 2nd edition, 2013); Applied Systems Analysis (McGraw-Hill) and other texts. Numerous prizes have recognized his work, including the Sizer Award for the Most Significant Contribution to MIT Education for having founded and led the MIT Technology and Policy Program. He has an MIT PhD and a Delft Dr.Hc. Born in the United States, he enjoyed 7 years of school in Switzerland. Prof. de Neufville is a CRAG (EPFL Center on Risk Analysis and Governance) visiting professor at the Laboratory of Hydraulic Construction.
Practical information
- General public
- Free
Organizer
- Prof. Nikolas Geroliminis & Prof. K. Beyer
Contact
- Prof. A. Schleiss