In this dissertation, we proposed solutions on novel sensor deployment and diagnoser design to efficiently detect stochastic faults in PLC based automated systems First, a fuzzy quantitative graph based sensor deployment was called upon to model cause-effect relationship between faults and sensors. Analytic hierarchy process (AHP) was used to aggregate the heterogeneous properties between sensors and faults into single edge values in fuzzy graph, thus quantitatively determining the fault detectability. An appropriate multiple objective model was set up to minimize fault unobservability and cost while achieving required detectability performance. Lexicographical mixed integer linear programming and greedy search were respectively used to optimize the model, thus assigning the sensors to faults. Second, a diagnoser based on real time fuzzy Petri net (RTFPN) was proposed to detect faults in discrete manufacturing systems. It used the real time PN to model the manufacturing plant while using fuzzy PN to isolate the faults. It has the capability of handling uncertainties and including industry knowledge to diagnose faults. The proposed approach was implemented using Visual Basic, and tested as well as validated on a dual robot arm. Finally, the proposed sensor deployment approach and diagnoser were comprehensively evaluated based on design of experiment techniques. Two-stage statistical analysis including analysis of variance (ANOVA) and least significance difference (LSD) were conducted to evaluate the diagnosis performance including positive detection rate, false alarm, accuracy and detect delay. It illustrated the proposed approaches have better performance on those evaluation metrics. The major contributions of this research include the following aspects: (1) a novel fuzzy quantitative graph based sensor deployment approach handling sensor heterogeneity, and optimizing multiple objectives based on lexicographical integer linear programming and greedy algorithm, respectively. A case study on a five tank system showed that system detectability was improved from the approach of signed directed graph's 0.62 to the proposed approach's 0.70. The other case study on a dual robot arm also show improvement on system's detectability improved from the approach of signed directed graph's 0.61 to the proposed approach's 0.65. (2) A novel real time fuzzy Petri net diagnoser was used to remedy nonsynchronization and integrate useful but incomplete knowledge for diagnosis purpose. The third case study on a dual robot arm shows that the diagnoser can achieve a high detection accuracy of 93% and maximum detection delay of eight steps. (3) The comprehensive evaluation approach can be referenced by other diagnosis systems' design, optimization and evaluation.