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Modern propulsion system designers face challenges that require that aircraft and engine manufacturers improve performance as well as reduce the life-cycle cost (LCC). These improvements will require a more efficient, more reliable, and more advanced propulsion system. The concept of smart components is built around actively controlling the engine and the aircraft to operate optimally. Usage of smart components intelligently increases efficiency and system safety throughout the flight envelope, all while meeting environmental challenges. This approach requires an integration and optimization, both at the local level and the system level, to reduce cost. Interactions between the various subsystems must be understood through the use of modeling and simulation. This is accomplished by starting with individual subsystem models and combining them into a complete system model. Hierarchical, decentralized control reduces cost and risk by enabling integration and modularity.