Manufacturing work cell operations are typically complex, especially when considering machine tools or industrial robot systems. The execution of these manufacturing operations require the integration of layers of hardware and software. The integration of monitoring, diagnostic, and prognostic technologies (collectively known as prognostics and health management (PHM)) can aid manufacturers in maintaining the performance of machine tools and robot systems by providing intelligence to enhance maintenance and control strategies. PHM can improve asset availability, product quality, and overall productivity. It is unlikely that a manufacturer has the capability to implement PHM in every element of their system. This limitation makes it imperative that the manufacturer understand the complexity of their system. For example, a typical robot systems include a robot, end-effector(s), and any equipment, devices, or sensors required for the robot to perform its task. Each of these elements is bound, both physically and functionally, to one another and thereby holds a measure of influence. This paper focuses on research to decompose a work cell into a hierarchical structure to understand the physical and functional relationships among the system’s critical elements. These relationships will be leveraged to identify areas of risk, which would drive a manufacturer to implement PHM within specific areas.