Change Is Hard: Flexibility "of" as a strategy to mitigate implementation uncertainty in design for flexibility
Open AccessThe design of flexibility "in" systems is a method to mitigate the impacts of future uncertainty. To incorporate flexible design, options are designed into systems. As the future becomes more clear and additional information is gathered, the option is "called" if and only if conditions in the future require the change to occur. Flexible design acts as an insurance policy against downside risk, provides the ability to exploit unanticipated upside, and decreases initial CAPEX, freeing resources for other investments. The benefits of this approach have been demonstrated in a wide array of systems and operating contexts, with a particular focus on LMS, such as large scale infrastructure projects. While there is a significant body of literature extolling the virtues of flexible design, there are also real world examples of catastrophic failures. This study examines one in detail, the failure of the United States military to implement armor kits to its HMMWV fleet during the Iraq War beginning in 2003. Despite the relative simplicity of the option and pressure to call the option in a timely manner, it took approximately two years from the start of the war for all armor kits to be added. As flexible design becomes more popular and is considered across a wider range of systems, such as FBS in which the HMMWV can be considered, it is important to reexamine common assumptions held throughout the literature. This research uses the case study of the HMMWV to compare these commonly held assumptions to the events which transpired over the war to develop guidance for system designers. Next, a simulation of a notional fleet of combat vehicles, inspired by the HMMWV case study, tests impacts on the value of flexibility if a key assumption, the timely implementation of the option, no longer holds true. Finally, the study identifies and proposes an alternative approach to flexibility for FBS, flexibility "of" the fleet. There are five primary contributions to the design literature, particularly focused on flexible design. First, through the case study of the HMMWV, a critical trade-off between the initial CAPEX, the performance of the option, and implementation delays is elicited through the comparison of five key assumptions common in flexible design studies and events surrounding the implementation of armor kits on the HMMWV. The next contribution determines, through the simulation described above, the value of flexibility is negatively impacted by time delays, even as small as a few months, and designers should account for this uncertainty during the design process. The third contribution shows that less expensive and lower performance options are less sensitive to implementation delays, informing system designers on design preferences given delays are often inevitable. The fourth contribution identifies an alternative method for flexibility for FBS, flexibility "of" the fleet. Instead of only leveraging the design of the system, as is the case with flexibility "in" the system, flexibility "of" the fleet simultaneously leverages the design of the system with the design of the fleet, improving fleet level performance. The fifth and final contribution identifies the conditions in which flexibility "of" the fleet is preferred over flexibility "in" the system, providing designers with guidance early in the design process to determine which flexibility path is preferred.
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