Flexibility Management in System Analysis

The general function of system analysis, according to Ropohl (2005), is to provide a uniform and common formal concept for the description and analysis of different types of systems. The approaches of system theory are used in different disciplines such as business management and engineering science. In business management, several authors discussed flexibility concepts based on general system analysis or special applications like the concept of 'Complex Adaptative Systems' (Gell-Mann 1995; Hocke 2004). In engineering science, systems analysis is used to improve the general performance, as well as the flexibility, of systems (de Neufville 2000;

Nilchiani & Hastings 2007). Flexibility is described as a closed loop control cycle in which the disturbances to system performance are compared with the desired performance, and the system is adapted in a control process until the actual output meets the desired value (Figure 13).

Figure 13. Closed loop control cycle

Hocke (2004) and Hocke & Heinzl (2006) provide an example of the generation of flexibility based on a system analysis approach. The foundation of the approach is a definition of flexibility which offers two guiding principles for so-called 'Flexibility Management': the response to alterations and the capability of change. The goal of flexibility management is to balance the potential flexibility and the capability of change with the required flexibility and the uncertain future

alternations of a system. A guiding principle of flexibility management is the rule of Eversheim &

Schaeffer (1980 'as rigid as possible and (only) as flexible as necessary.'’ The required and potential flexibility is substantiated by means of system analysis; this is a precondition for flexibility management

 The relevant alterations of the system or the system environment are summarized in the term 'required flexibility'. Required flexibility is influenced by future uncertain developments and depends on the dynamics of the environment (amount of uncertainty) of the system. Hocke (2004) describes the characteristics of required flexibility in terms of systematic dimensions like the origin of the uncertainty (system internal or system external), the time characteristic (period or point of time), the impact on the performance of the system (relevant or irrelevant), and the quality of information (certainty, risk and uncertainty).

 The capacity to act, which could occur in response to future changes, is named as 'potential flexibility'. Hocke (2004) identifies different mechanisms which generate potential flexibility based on system analysis. The following cybernetic mechanisms used to develop potential flexibility are described: shielding, selective input intake, open-loop control, closed-loop control and processual and structural change.

Balancing the required and potential flexibility is necessary if one is to include flexibility management in a planning framework. According to Hocke (2004) the framework should include the following steps:

 analysis of uncertainties and determination of the required flexibility,

 analysis, determination and construction of potential flexibility and

 maintenance, monitoring and utilization of the capacities to act.

The generic system analysis is also used in engineering science systems to describe the generation of flexibility. Nilchiani & Hastings (2007) developed an approach for a systematic analysis of flexibility, based on six dimensions of system assessment:

 System boundary: The boundaries of the system are defined as basic for the definition, measurement and implementation of the flexibility of the system.

 System aspect: The flexibility is measured with respect to a particular aspect of the system performance. So a system could be flexible with respect to one objective, while being inflexible to another. Hence it is necessary to define the aspects of the systems which require flexibility before the flexibility is measured or planned.

 Time window of interest: A key element for the definition and measuring of flexibility is the time aspect. During its lifetime a system will go through several changes. Depending on the relevant time window, a system may include several relevant alterations.

 Uncertainty profile within time window: Uncertainty can exist in the system as well as in the

system environment. The identification of the sources of uncertainty and the uncertainty profile within the time window is fundamental to the planning and management of flexibility.

 Degree of access: The degree of access to the system once put in operation is analyzed as an important limitation of flexibility options.

 Value delivery response to change: An evaluation of whether the performance of the system is influenced by the identified future uncertainties. Only those alterations which influence system performance are considered.

Based on this six-element characterization of flexibility, Nilchiani & Hastings (2007) developed a framework for the generation of flexibility. The different system characteristics are allocated to steps of the planning process. The framework offers guiding principles for the identification, measurement, and valuation of required flexibility and potential flexibility. The flexibility framework of Nilchiani & Hastings (2007) includes seven steps:

 Defining the systems boundary and time window: First step of the planning process is to define the boundaries of the system and the relevant time period of interest.

 Defining the system's aspects of interest and measurable value delivery: the system’s aspects of interest must be indentified for the measurement of flexibility. In addition, a metric describing the intended system performance has to be defined.

 Identifying relevant sources of uncertainty: As one dimension of flexibility management, the relevant future uncertainties of the system and the system environment are identified.

 Choosing an evaluation methodology: An adequate evaluation technique is chosen, depending on the type of uncertainties of the system.

 Choosing a baseline and developing alternatives: Several alternative system designs are created which can improve the flexibility of the system (alternative solutions with different flexibility options). For the comparison of flexibility, a baseline alternative with the conventional planning approach is developed.

 Applying evaluation methods to baseline and alternatives: For the different alternative designs of the systems, as well as the baseline design, the costs and benefits of the system are modeled considering the relevant sources of uncertainty.

 Creating a flexible system: An alternative system design is selected in which the benefits of flexibility are higher than for the baseline case.

Approaches to flexibility management, based on system analysis, are also used in the field of urban drainage systems. For example, Sieker et al. (2007a) developed principles for the sustainability and flexibility of urban drainage systems in the context of the categories of system analysis. As a basic mechanism to generate flexibility Sieker et al. (2007a) mention the design principles decentralization, diversity and self-organization. No profound approach for the generation of flexibility of sustainable urban drainage systems is provided.

The advantages and disadvantages of system analysis for the generation of flexibility are summarized. The system theoretical background is characterized by the following attributes:

 There is criticism that until now system analysis has mostly focused on the optimization of the

normal rigid systems without considering uncertainties and flexibility. So de Neufville (2000) criticizes the fact that many system analyses not consider future uncertainties and have failed to create flexible concepts to respond to these uncertainties. It is questionable if de Neufville’s decade old statement is still valid. The approaches presented above illustrate that system analysis could also contribute to the generation of flexible systems.

 System analyses provide clues to identify uncertain future drivers in the system as well as in the system environment and to identify basic approaches in developing 'flexibility potentials' which can be used to cope with future uncertainties. The general system analysis offers a framework to analyze required, as well as potential, flexibility. Therefore, system analysis can contribute to identifying locations for flexibility potentials, like areas in the design that can be easily manipulated and that can contribute significantly to performance of the system (Shah n.y.).

 A basic principle of 'flexibility management' is to balance the required and the potential

flexibility of a system. One critique of this principle is that this approach is not suitable for all types of uncertainties. If the uncertain future drivers are visible and can be described in their impact and influence on the systems performance, a balance of the required and potential flexibility is possible. If, however, the information about the possible future development is fragmentary or incomplete it is often not possible to describe the required flexibility.

Consequently, no balance between the required and the potential flexibility can be developed. To deal with different types of uncertainty, Zahn et al. (2005) propose to have two types of flexibility potentials. Target oriented flexibility potentials for identified uncertainties are required. On the other hand, general undirected flexibility potentials (which can be substantiated later) for unknown future developments have to be provided.

 The concept of 'closed-loop control' cycles can be used as a generic model to describe the provision of flexibility. In the control cycle, disturbances of system performance are managed by adaptation measures with feedback. The actual system performance affected by a disturbance is compared with the control variable describing the intended performance of the system. If there is a difference between these two values the control mechanism is triggered so that the system performance is influenced. In a feedback loop it is assessed if the new system performance matches the intended performance. The control mechanism is changed until the intended system performance is achieved. This general model can be transferred to the concept of flexibility management, thereby providing an assessment of whether an alteration in the system or the system environment affects the intended system performance.

If there is a gap, flexibility options as control mechanisms of the system are used to adapt the system until the intended performance is achieved again.

 The system analysis is focused on the potential flexibility in the system design and does not consider the potential flexibility which can be created by the planning and management process. Hence, the system analysis does not offer any guidance to cope with problems occurring in the planning process.