Failures of engineered systems can lead to significant economic and societal losses. To minimize the losses, reliability must be ensured throughout the system's lifecycle in the presence of manufacturing variability and uncertain operational conditions. Many reliability-based design optimization (RBDO) techniques have been developed to ensure high reliability of engineered system design under manufacturing variability. Schedule-based maintenance, although expensive, has been a popular method to maintain highly reliable engineered systems under uncertain operational conditions. However, so far there is no cost-effective and systematic approach to ensure high reliability of engineered systems throughout their lifecycles while accounting for both the manufacturing variability and uncertain operational conditions.

Inspired by an intrinsic ability of systems in ecology, economics, and other fields that is able to proactively adjust their functioning to avoid potential system failures, this dissertation attempts to adaptively manage engineered system reliability during its lifecycle by advancing two essential and co-related research areas: system RBDO and prognostics and health management (PHM). System RBDO ensures high reliability of an engineered system in the early design stage, whereas capitalizing on PHM technology enables the system to proactively avoid failures in its operation stage. Extensive literature reviews in these areas have identified four key research issues: (1) how system failure modes and their interactions can be analyzed in a statistical sense; (2) how limited data for input manufacturing variability can be used for RBDO; (3) how sensor networks can be designed to effectively monitor system health degradation under highly uncertain operational conditions; and (4) how accurate and timely remaining useful lives of systems can be predicted under highly uncertain operational conditions. To properly address these key research issues, this dissertation lays out four research thrusts in the following chapters: Chapter 3 - Complementary Intersection Method for System Reliability Analysis, Chapter 4 - Bayesian Approach to RBDO, Chapter 5 - Sensing Function Design for Structural Health Prognostics, and Chapter 6 - A Generic Framework for Structural Health Prognostics. Multiple engineering case studies are presented to demonstrate the feasibility and effectiveness of the proposed RBDO and PHM techniques for ensuring and improving the reliability of engineered systems within their lifecycles.