This paper describes a method for systematic analysis and optimization of large engineering systems, e.g., aircraft, by decomposition of a large task into a set of smaller, self-contained subtasks that can be solved concurrently. The subtasks may be arranged in many hierarchical levels with the assembled system at the top level. Analyses are carried out in each subtask using inputs received from other subtasks, and are followed by optimizations carried out from the bottom up. Each optimization at the lower levels is augmented by analysis of its sensitivity to the inputs received from other subtasks to account for the couplings among the subtasks in a formal manner. The analysis and optimization operations alternate iteratively until they converge to a system design whose performance is maximized with all constraints satisfied. The method, which is still under development, is tentatively validated by test cases in structural applications and an aircraft configuration optimization. It is pointed out that the method is intended to be compatible with the typical engineering organization and the modern technology of distributed computing.