System Dynamics

System Dynamics (SD) or system dynamics was developed by Jay W. Forrester mid-1950s at the Sloan School of Management at MIT methodology for holistic analysis and ( model ) and simulation of complex dynamic systems.

Application finds especially in the socio - economic field. Thus, the effects of management decisions on the system structure and system behavior, such as the company's success, simulated and recommendations can be derived. In practice, finds the methodology, in particular in the design of learning laboratories, strategic and operational planning as well as the operationalization of balanced scorecards use. The analysis and design of socio - economic issues and problem situations is created using qualitative and quantitative models.

Qualitative models

In the qualitative method is mostly about the identification and investigation of self-contained functional chains (English: feedback loops ). These are divided into loops with positive ( reinforcing loops ) and negative ( balancing loops ) polarities. Originally intended, inter alia, the qualitative method always by a subsequent quantitative analysis (simulation ) are supplemented by Forrester: In fact, today's system dynamics projects from conceptual or financial reasons, restrict partly on qualitative models. Qualitative models such as the so-called causal diagrams or " influence diagrams " afford even without simulation and use of "hard data " ( Wolstenholme EF 1993. ) An important contribution to the system analysis: grasp a very complex problem consisting of countless explanations in a clear manner together and help as a template for discussion. Identify feedback and thus help to explain problems and structures, or to gain new insights. The investigation of the chart may indicate the adequacy of the model limitations and assumptions better. Finally, they serve as a basis for possible quantitative models, especially since they can be relatively easily transformed into equations.

Quantitative models

The representation in flowcharts and their simulation enables deeper understanding of the system. Stock ( stocks), rates ( flows) and auxiliary variables are used to describe the system contexts, and show how the results chains on the behavior of systems lead, which are partly non-linear and counter-intuitive. This is the main advantage of this method. Special software such as CONSIDEO, iThink / STELLA, DYNAMO, Vensim or Powersim enable the simulation of the investigated issues. The simulation of different scenarios ( runs ) promotes understanding of the system behavior over time.

The recurring patterns of behavior of complex systems are based on certain structures that can be represented as simplified models, so-called system archetypes. Currently 10 different such systems archetypes are distinguished. Knowing these basic structures allows a deeper understanding of different systems and thus provides a basis for more effective interventions in this.

Applications

System Dynamics is nowadays used in particular in the fields of economics and business administration for the analysis of dynamic and complex issues. Examples are drawn from the public and private sectors: production management, strategic planning, analysis and design of business models, business forecasting and scenario analysis. The methodology provides generally follow for the simulation and explanation of the complex behavior of people in social systems. Here are typical examples of the overfishing of the oceans or the occurrence of disasters such as the Chernobyl disaster. In addition, System Dynamics was the basic methodology for the simulation of the world model World3 that for studies on Limits to Growth ( Eng.: The Limits to Growth, 1972) was created under the direction of Dennis L. Meadows on behalf of the Club of Rome. Important simulation models in particular for environmental research have been developed by Hartmut Bossel.

Findings

In addition to the model and the solution approaches per se, are the lessons learned and the understanding of the processes and results which are used beyond the project. Next leads the understanding of the method for improved and faster realization of other problems.