This paper introduces an Enhanced Sequence Diagram (ESD) as the basis for a structured framework for the functional analysis of complex multidisciplinary systems. The ESD extends the conventional sequence diagrams (SD) by introducing a rigorous functional flow-based modelling schemata to provide an enhanced basis for model-based functional requirements and architecture analysis in the early systems design stages. The proposed ESD heuristics include the representation of transactional and transformative functions required to deliver the use case sequence, and fork and join nodes to facilitate analysis of combining and bifurcating operations on flows. A case study of a personal mobility device is used to illustrate the deployment of the ESD methodology in relation to three common product development scenarios: (i) reverse engineering, (ii) the introduction of a specific technology to an existent system; and (iii) the introduction of a new feature as user-centric innovation for an existing system, at a logical design level, without reference to any solution. The case study analysis provides further insights into the effectiveness of the ESD to support function modelling and functional requirements capture, and architecture development. The significance of this paper is that it establishes a rigorous ESD-based functional analysis methodology to guide the practitioner with its deployment, facilitating its impact to both the engineering design and systems engineering communities, as well as the design practice in the industry.