ESD.

83, Fall 2001

Research Seminar in Engineering Systems
System Dynamics
Origins, development, and future prospects of a method
Victor Tang
1
and Samudra Vijay
2
Introduction
In this paper, we first introduce and define system dynamics (SD) as a method, expore its
reationship to the feed!ac" and contro systems, and then trace the history and origin of SD#
Thereafter we discuss SD as a methodoogy and suggest its pace in the matrix of principes, methods
and toos# $e aso discuss some exampes and appications of the SD methodoogy, and highight its
a!iity to simuate compex socio%economic and management systems !y ea!orating exampes, such
as &eope's (xpress# )ext, we trace the journey of conceptua de*eopment of the systems approach
and its ogica de*eopment from systems engineering to the SD# $e concude !y saying that SD has
e*o*ed as a powerfu too !ut of ate its growth has !een hori+onta, and not *ertica# , major
conceptua !rea"through is needed to reai+e its fu potentia#
System Dynamics is a method that extends !eyond con*entiona domain of systems approach
to arge%scae compex engineering pro!ems# SD deas with interaction of *arious eements of a
system in time and captures the dynamic aspect !y incorporating concepts such as stoc", fows,
feed!ac" and deays, and there!y pro*ides an insight into the dynamic !eha*ior of system o*er time#
,s a "nowedge domain, SD can !e thought of as a ogica extension of systems engineering (S() and
systems anaysis (S,)# SD expicity ta"es into account the dynamic !eha*ior that resuts due to
deays and feed!ac"s in the system# -ay $# .orrester, /anagement professor at the /IT0Soan Schoo
is considered to !e the father of this new approach to understand and so*e the pro!ems in the
!usiness and socia science domains# SD had significant inteectua impact wordwide# /ost noted
and contro*ersia appication of SD is the de*eopment of word modes, $ord2 and $ord1, which
were pu!ished in $ord Dynamics (1231) and in The 4imits to 5rowth (1232) respecti*ey# ,though
the $ord modes using system dynamics attracted se*ere criticism from a *ery wide spectrum of
discipines, go*ernment and academia, they were successfu in !ringing some of the *ery *ita
chaenges and issues !eing faced !y man"ind to the forefront of academic and poitica thought
process# System dynamics as a method has !een successfuy appied in a wide *ariety of !usiness and
socio%economic fieds to understand the pro!ems and gain an insight into *arious poicy inter*entions#
$e !eie*e that SD is a powerfu too that coud !e appied successfuy to a wide *ariety of pro!ems,
!ut de*eopment of SD needs a !rea"through to mo*e further from where it stands today#
History and Origins
-ay $# .orrester, the father of system dynamics, joined /IT as a graduate student in the
(ectrica engineering department, and was empoyed !y 5ordon S# 6rown, as research assistant in the
1
principa author of pages 1#2 to 12# panning was a joint effort#
2
principa author of pages 1 to 1#2# panning was a joint effort#
page 1
ESD.83, Fall 2001
Research Seminar in Engineering Systems
newy found ser*omechanisms a!oratory in 1278# During $ord $ar II, he designed and de*eoped
ser*omechanisms for contro of radar antennas, gun mounts and other miitary e9uipments# During this
period he extensi*ey used the mathematica theory of contros and concepts of feed!ac" and sta!iity
in rea ife engineering appications# Thereafter he ed the design and de*eopment of the $hirwind I,
the first digita computer designed at the /IT Digita :omputer 4a!oratory# Thereafter he headed the
Di*ision ; of the 4incon 4a!oratory, which designed computers for the S,5( (Semi%,utomatic
5round (n*ironment) air defense system for )orth ,merica#
S,5( is one of the prominent exampes of a arge%scae compex engineering system# The
experience in managing arge scae research projects deaing with compex engineering systems had a
profound impact in shaping .orrester's <systems thin"ing=#
.orrester joined the /IT Soan Schoo of management in 12>;, where he aid the foundation of
system dynamics, a method to understand the dynamic !eha*ior of *arious !usiness reated issues and
pro!ems# ?e came across a pro!em faced !y the househod appiance pant of 5enera (ectric (5()
in @entuc"y# /anagement at the pant was una!e to understand the fuctuations in the demand#
.orrester started thin"ing of this pro!em in terms of the feed!ac" oops to simuate the pant
in*entory andA <that first in*entory contro system with penci and paper simuation was the
!eginning of system dynamics= (.orrester, 1221)# ?e further extended the use of system dynamics in
the fied of !usiness management and formay articuated the SD methodoogy in his !oo" Industrial
Dynamics, pu!ished in 12;1#
/eetings and discussion with former 6oston mayor and then *isiting professor at the /IT ed
to extension of the SD method to understand the ur!an housing pro!em in the 6oston /etro area#
This resuted in pu!ication of his next !oo" Urban Dynamics, using system dynamics methodoogy in
the arena of socia sciences# ?is concusion from modeing the ur!an !eha*ior was thatA <the most
damaging poicy was to !uid ow%cost housing=# Such a stri"ing concusion o!*iousy had *ery strong
mora, ethica and poitica dimensions# This e*o"ed *ery strong emotiona response# ?e argues that
the and used for creating ow%cost housing curtais the a*aia!iity of and for more producti*e and jo!
creating structures, such as !usinesses, and at the same time it aso draws in more peope, eading to a
*icious cyce of unempoyment and greater need for ow%cost housing# )otwithstanding the criticism,
SD as a methodoogy mo*ed on under the guidance and eadership of .orrester#
From Urban Dynamics to The Limits of ro!th
In 1238, -ay .orrester was in*ited to attend a meeting of the :u! of Bome, a group of
inteectuas from *arious countries, who were trying to find a soution to <Athe predicament of
man"ind=# .orrester's discussions with the :u! of Bome !ecame the !asis of the first comprehensi*e
mode of the word !ased on system dynamics# World Dynamics, his !oo" descri!ing the word mode,
pu!ished in 1231, was we recei*ed, se*erey critici+ed, and widey circuated around the word#
)ine months ater, a team of researchers at /IT, under the eadership of Dennis /eadows further
refined the SD mode of the word and presented the resuts from the refined mode (word1) in the
!oo" caed The Limits to Growth# The 4imits to 5rowth attracted se*ere criticism C on accounts of its
page 2
ESD.83, Fall 2001
Research Seminar in Engineering Systems
predictions and methodoogy !oth# /any !oo"s and artices pu!ished critici+ing the
inappropriateness of the method and unaccepta!iity of the resuts pu!ished in the !oo"#
SD has !een sowy and steadiy growing since then, and had !een appied to a *ery wide
*ariety of pro!ems successfuy# /IT Soan Schoo has ed the growth and spread of SD as a
methodoogy to attac" !usiness reated pro!ems such as in*entory, !usiness cyce etc# Its growth has
!een mosty confined to the so*ing of management and poicy reated pro!ems# Today, many
management schoos around the word offer courses in the fied of SD#
System Dynamics as a "ethod
It is important that System Dynamics !e propery as a method# Sterman (2888) writes,
system dynamics is a perspecti*e and set of conceptua toos that ena!e us to understand the
structure and dynamics of compex systems# System Dynamics is aso a rigorous modeing
method that ena!es us to !uid forma computer simuations of compex systems and use them
to design more effecti*e poicies and organi+ations#
Simpy stated, System Dynamics is a method# , method, that permits the anayst to decompose a
compex socia or !eha*iora system into its constituent components and then integrate them into a
whoe that can !e easiy *isuai+ed and simuated# The exampe (side1, page 7) in the foowing page
*i*idy demonstrates this point# It shows that as &eope's (xpress feet expanded, the passengers
carried increased re9uiring more roo"ies to !e hired# Dnfortunatey, inexperienced roo"ies owered
ser*ice 9uaity, which caused &eope's express to increase mar"eting expense to sustain customer
satisfaction# A well-intended policy created unintended negative conseuences! This emergent system
effect is clearly illustrated visually (side 7, page 7). /oreo*er, the power of its simulation
capabilities are demonstrated !y the sampe graphs that show the !eha*ior of two "ey system
parameters C customers' percei*ed 9uaity and the countermeasures from competitors#
&rofessor (d :rawey, head of the ,ero0,stro Systems Department, separates three distinct
characteristics of the systemsE principes, methods, and toos# To iustrate the point, we juxtapose
System Dynamics against some other we%"nown systems (side 11, page >)#
The principes of System Dynamics are predicated on two major systems principes# F1G The
first is that stoc"s, fows, and deays determine system !eha*ior# This is readiy o!ser*ed in e*eryday
ife# $ater fows through pipes and they accumuate in reser*oirs, tu!s, and other containers# $ater
gets warm sowy after the hot water tap is turned on# :urrent fows through conductors, capacitors are
charged, and their charge decays exponentiay# It too" a eap of ingenuity and imagination for
.orrester to conceptuai+e anaogous !eha*ior in socia systems and !eha*iora systems# F2G The
second is !ounded rationaity (Simon 12>3)# Simon uses the metaphor of a pair of scissors, where one
!ade is the <cogniti*e imitations= and the other the <structure of the en*ironment#= System dynamics
does not pretend to address a the *aria!es of a pro!em, rather concentrates on the ones that are "ey
to the pro!em and its context, i#e#, the <en*ironment= as defined !y the anayst# System Dynamics
does not pretend to optimi+e, !ut to satisfice !y means of fast and fruga rues that the anayst is a!e to
capture !y its understanding of the pro!em (5igeren+er and Seten 2888)#
page 3
ESD.83, Fall 2001
Research Seminar in Engineering Systems
slide 1
Peoples Express Doom Spiral
#$ passengers
carried
#$ fleet
#$ costs
#$ profits
#$
%evenues
#$ "ar&eting
$'pense
(ustomer #erceived
Service )uality
*
*
*
*
*
+
+
competitor
counter measures
+
%
,-
%
%
,
*
*
ne! hires
*
*
. roo&ies
+
this is "r/ 0oon1s
left hand loop
this is "r/ 0oon2s
right hand loop
source: H..!ee, ".#ang
slide 4

Modeling Capability
page 4
ESD.83, Fall 2001
Research Seminar in Engineering Systems
slide 11
governmental air defense economic
systems systems and social systems
principle separation of super-system bounded rational,
powers of heterogeneous grounded theory
systems stocks, flows, delays
method primary interoperability of system
elections systems of systems dynamics
networks of networks
tools voting machines computers, Vensim
networks, other DYNAM
artifacts !tella
System Dynamics is a method

3pplications of System Dynamics
System Dynamics has !een depoyed in a *ery wide *ariety of appications# $e wi iustrate
ony a few exampes that we consider representati*e of the power and *ersatiity of System Dynamics#
Portfolio Simulation. , we%"nown portfoio mode is the 2x2 6:5 mode, which has reati*e mar"et
share on the x%axis and mar"et growth on the y%axis# The mode separates !usiness units into cash
cows, dogs, stars, and 9uestion mar"s# 6:5 prescri!es a set of competiti*e !usiness poiciesH such as
mi"ing cash cows to fund stars to create the future cash cows, etc# The 6:5 mode is static and omits
feed!ac" in its poicy formuations# The System Dynamics mode of /ertern, 4Iffer, and $iedmann
(12J3) introduces dynamics into the static 6:5 mode and identifies its fata faws# They show how
and why the 6:5 poicy fais when competitors adopt atypica responses# System Dynamics shows
the dynamic competiti*e !eha*ior of firms, rather than simpe static representations#
Product Development. There are important factors that determine the 9uaity of a product and a team's
the a!iity to meet schedues# , critica issue is the race !etween competing the wor" that needs to !e
done, fixing "nown pro!ems and unanticipated pro!ems# The other critica issue is the interactions
!etween process and physica structures such as manufacturing# The crux of the issue is the different
time%constants for impro*ements to reach steady state, shorter for manufacturing, onger for product
de*eopment# Bepenning and Sterman (1223) using System Dynamics are a!e to show that the
asynchronicity of these processes ead to dysfunctiona organi+ationa performance#
Supply Chain. The *oatiity of a !usiness' suppy chain is the !ane of e*ery firm# They are either
consistenty short of in*entory, or they ha*e an o*era!undance sitting in warehouses# This is
page 5
ESD.83, Fall 2001
Research Seminar in Engineering Systems
particuary acute when there are mutipe stages in the suppy chain# Dsing mathematica functions,
the soution to this pro!em is unwiedy# $ith System Dynamics the pro!em is much more readiy
so*a!e# The e*es of in*entory at each stage of the suppy chain, and its dynamic !eha*ior can !e
simuated with great precision (Sterman 2888)#
, more rigorous approach to the System Dynamics appications shoud use a meta%anaysis of
the pu!ished iterature# 6ut in the imited format of this report, the ta!e !eow is iustrati*e of the
wide range of appications (side 2, this page)#
slide
Examples o! "pplications
#$siness port!olio sim$lation Merten% &'!ler% (eidman 1)* SD+ ,2% 2
De!ence analysis (olstenho-lme% "l."l$si 1)* SD+ ,2% 2
Distrib$tion o! body !l$ids /ansen% #ie 1)* SD+ ,2% 2
+$ral 0 social economic interactions "l!eld 15 Decision Dyn1
/igh2ay constr$ction in China 3$% Mashaye-i% Saeed 1) SD+ ,14% 2
Prod$ct de4elopment process 5ord% Sterman 1) SD+ ,14% 1
Di!!$sion o! inno4ation management Maier 1) SD+ ,14% 4
E4al$ation o! assembly systems 6ahn% Diller$p% Schmid 1) SD+ ,14% 4
Mental models in system dynamics Doyle% 5ord 1) SD+ ,14% 4
Commerciali7ation o! 89 technology Pard$e% Calr-% (inch 1) SD+ ,15% :
Social theory and system dynamics ;ane 1 E$r1 <=+ 113
=$tso$rcing organi7ational impacts McCray% Clar- 1 SD+ ,15% 4
Epidemic inter4entions in Mexico +itchie%.D$nham% ;al4>n 1 SD+ ,15% 2
Macro0micro modeling !ield ser4ice /omer 1 SD+ ,15% 2
8nteractions in a d$opoly Sice% Mose-ilde% Moscardini% 2::: SD+ ,1?% 2
Consens$s in organi7ations /ines% /o$se 2::1 SD+ ,1*% 1
Prod$ct de4elopment and @$ality #lac-% +epenning 2::1 SD+ ,1*% 1
Aepalese constr$ction sector #Barachya% =g$nlana% #ach 2::1 SD+ ,1*% 1
Policy design in mar-et gro2th Sterman SD 2::1
+eengineering the s$pply chain Sterman SD 2::1
Modeling /8,0"8DS Sterman SD 2::1
(onceptual Developments of System Dynamics
$e argue that System Dynamics represents a step in the progression of the fied of systems
thin"ing# FSee iustration !eowG# This progression !egins with Systems (ngineering, mo*es to
Systems ,naysis, then to System Dynamics# /ajor <phase transitions= punctuate the growth from one
stage to the next# $e wi address the conceptua foundations, technoogy, and communities of
practice that ha*e propeed this e*oution# :arie (2888, 2881) points out <"nowedge is in*ested in
practice and the successes that demonstrate the *aue of the "nowedge de*eoped#= .or these reasons
we wi identify the communities of practice and what our readings suggest were their principa
page ?
ESD.83, Fall 2001
Research Seminar in Engineering Systems
moti*ations# 6y extrapoating these three *ectors into 9uaitati*ey new directions and !y discussing
the resutant phase transitions, we wi *enture a hypothesis of the next stage to foow System
Dynamics (side 18, this page)#
slide 1:
Systems $ngineering
construction an$ o%erations
&ee$'ac( an$ control
'ottoms)u%
Systems $ngineering
construction an$ o%erations
&ee$'ac( an$ control
'ottoms)u%
ser*omechanisms
Systems 3nalysis
re$uction an$ sim%li&ication
inter&aces an$ intero%era'ility
to%s)$o+n
Systems 3nalysis
re$uction an$ sim%li&ication
inter&aces an$ intero%era'ility
to%s)$o+n
com%uters,
communications
a$a%ti*e systems
System Dynamics
groun$e$ rationality
net+or(s o& stoc(s, &lo+s, $elays
integrati*e
System Dynamics
groun$e$ rationality
net+or(s o& stoc(s, &lo+s, $elays
integrati*e
social sciences
'eha*ioral sciences
Systems Dynamics is a step in a progression
Systems engineering had its roots in /IT (?ughes 122J, ?ughes and ?ughes 2888)# $e
consider S,5( to !e the exempar of systems engineering# The goa was the air defense of the Dnited
States# The instrument of defense was a massi*e system of radars, anti aircraft guns, and computers a
networ"ed so that it woud operate as a purposefu system# The engineering chaenge was to construct
the system and operate it# The engineering team had su!stantia experience in ser*omechanisms
ac9uired during $$ II to !uid such a system from the !ottoms%up# The community of practice was
engineers, and the institutions that empoyed them were organi+ations in the miitary%industria%
uni*ersity compex# Kur cass readings suggest that their core moti*ations were pro!em so*ing to
meet important and urgent nationa o!jecti*es#
Systems ,naysis represents the <next= wa*e of growth# Systems engineering migrates or
<spreads= (?ughes 122J) into the ci*iian sector and industry# )ow, the systems ha*e ess to do with
artifacts created !y engineers, !ut more to do with strategy, poicy, and organi+ationa contro !y
means of the systems discipine# It is important to note, howe*er, that systems as artifacts grew in si+e,
scope and compexity so they performed arge%scae functions in the ci*iian sector# (xampes of these
incude the (SSL> computer controed teephone switching system, and the arge pri*ate data
networ"s of arge go!a enterprises# ?owe*er in terms of societa impact, the migration of systems
into the ci*iian and industria sectors for strategy and poicy were the more semina e*ents# The
page *
ESD.83, Fall 2001
Research Seminar in Engineering Systems
exempars of this spread incude /c)amara and the $hi+ "ids at the .ord /otor :ompany, where !y
impementation of systems anaysis, they centrai+ed contro and accrued unprecedented power#
/c)amara's tenure in the DKD and transpanting his fa*orite contro and power accrua mechanism,
&&6 (panning, programming, !udgeting) to the &entagon, acceerated this migration# B,)D, a <thin"
tan"= with its economists, mathematicians reentessy pushed the inteectua en*eope of systems
anaysis into poicy and strategy# -ohnson's $ar on &o*erty created new opportunities for B,)D and
system anaysts to spread their dogma# It appears that systems anaysis !ecame a practice, as we as a
means to accrue contro and power# (itism !egan to creep into systems anaysis# :omputers,
sophisticated software and arge communications networ"s fueed and tur!ocharged the spread system
anaysis into industry, go*ernment and the ci*iian sectors#
.orrester, with his *ast experience and "nowedge of systems and his prodigious a!iity to
in*ent and reconceptuai+e ideas into more inno*ati*e and creati*e concepts, in*ents system dynamics#
6ody, he appies it to major and highy *isi!e nationa and go!a issues in the domain of socia and
!eha*iora science# ?is modes draw immediate attention and su!stantia criticisms from many
directions# Begardess of the merits or praise from his detractors or admirers, .orrester had decisi*ey
migrated systems anaysis into the ream of socia sciences# $e !eie*e that he made a significant
contri!ution in popuari+ing and democrati+ing systems# The communities of practice now incude
academic researchers, !usiness and strategy anaysts in industry, and consutants# These ideas are
summari+ed !eow (side 12, this page)#


slide 1

conceptual communities
foundations of practice
!ystems servomechanisms engineers at the cutting edge
"ngineering build and operate military-industry-academic triad
bottoms-up groups in these institutions
!ystems math models think tanks
Analysis economics elite groups in the civilian sector
elite groups government institutions
!ystem grounded rationality university researchers
Dynamics stocks, flows, delays business consultants
integrative business analysts
Comparisons and Contrasts
page )
ESD.83, Fall 2001
Research Seminar in Engineering Systems
%ecent (onceptual Developments
In this section we discuss some <eading indicators= that are potentia signas that coud te us
the new directions of the next stage of systems concepts# There are two papers in System Dynamics
that ha*e !een pu!ished recenty that, in our opinion, are worthy of note# In addition, there are
de*eopments in computing that are sufficienty dramatic that they coud aso potentiay !e another
source of fue that wi dri*e the next stage of systems thin"ing#
The first <eading indicator= is a paper !y :oye (2888)# It is significant !ecause it is indicati*e of
a shift in thin"ing# This paper represents a shift from the dominance of 9uantitati*e anaysis towards
9uaitati*e anaysis# This is consistent with .orrester (123>) where he writes, <A there is a sharp
distinction !etween the Mexact' and the socia sciencesA exactness and accuracy must !e measured not
in terms of the num!er of decima digits,= and <A accuracy must !e achie*ed !efore precision is
usefu#= :oye's writes in his paperE
The tradition, one might ca it the orthodoxy, in system dynamics is that a pro!em can ony !e
anay+ed, and poicy guidance gi*en, through the aegis of a fuy 9uantified mode# A This artice
!riefy re*iews that de!ate and then discusses some of the pro!ems and ris"s sometimes in*o*ed
in 9uantification# Those pro!ems are exempified !y an anaysis of a particuar mode, which turns
out to !ear itte reation to the rea pro!em it purported to anay+e# Some 9uaitati*e modes are
then re*iewed to show that they can, indeed, ead to poicy insights and fi*e roes for 9uaitati*e
modes are identified# .inay a research agenda is proposed to determine the wide !aance
!etween 9uaitati*e and 9uantitati*e modes#
Kne of the most interesting exampes discussed !y :oye is the demise of the /ayan popuation,
where he shows that the 9uantitati*e resuts of the modes defy ogicH !ut that the ogic of the mode is
pausi!e and assists in deepening understanding#
The second paper is !y ?ines and ?ouse (2881) on the su!ject of <<poicy formation that is
consistent with what is "nown a!out e*outionary processes and what is "nown a!out human
psychoogy#= $hat is remar"a!e a!out this paper is that the authors use concepts from !ioogy find
anaogs for organi+ationa earning and !eha*ior# They use the notion of mutation and recom!ination
in their in*estigation# $e thin" this is important !ecause it signas another 9uaitati*e shift in systems
thin"ing# The sources of anaogy for systems thin"ing are incuding !ioogy# The authors state,
,s in e*ery systems stage of the past, there are nascent technoogies that wi fue and prope
current systems thin"ing into the next stage# 4ohr (2881) in his coumn in the )ew Nor" Times reports
on &au ?orn's (I6/ V& for Besearch) computing *ision of <autonomic= systems# In the same *ein as
?ines and ?ouse (2881), ?orn reports on wor" that I6/ is doing on systems whose anaogs are
!ioogica, genetic and meta!oic# These systems wi !e highy adapti*e, capa!e of earning, and sef%
organi+ation# (sewhere, ?orn (1222) reports on the dramatic technoogica progress that is a!etting
this "ind of new thin"ing# .or exampe, in 1278 it too" 18
2
joues to process one computer operation#
In 1228, that too" ony 18
%1
joues, an impro*ement factor of 18
12
# Simiary, in 12;8 it too" 18
1J
atoms
to store one !it of information, in 1228 that too" ony 18
2
atoms# (sewhere
1
I6/ reports that it is
de*eoping a computer system with one miion processors that are capa!e of processing concurrenty#
1
wysiwygE001120httpE0iser*er#m"m#can#i!m#cam0headines0!uegene#htm
page
ESD.83, Fall 2001
Research Seminar in Engineering Systems
This system is 1888 times more powerfu than the Deep 6ue that defeated @asparo* in a cee!rated
and *isi!e chess match# It processes 18
2
instructions per second, and processes Jx18
;
threads
concurrenty *ersus the maximum of >888 today# I6/ reports that a chain saw can cut through the
system, !ut it wi continue to run and repair the appications that are damaged !y this destructi*e
physica act#
&utting a these ideas together, we hypothesi+e that the next stage of systems thin"ing wi
resem!e autonomic systems (side 17, this page)#

slide 14

Systems $ngineering
construction an$ o%erations
&ee$'ac( an$ control
'ottoms)u%
Systems $ngineering
construction an$ o%erations
&ee$'ac( an$ control
'ottoms)u%
ser*omechanisms
Systems 3nalysis
re$uction an$ sim%li&ication
inter&aces an$ intero%era'ility
to%s)$o+n
Systems 3nalysis
re$uction an$ sim%li&ication
inter&aces an$ intero%era'ility
to%s)$o+n
com%uters,
communications
a$a%ti*e systems
Systems Dynamics
groun$e$ rationality
net+or(s o& stoc(s, &lo+s, $elays
integrati*e
Systems Dynamics
groun$e$ rationality
net+or(s o& stoc(s, &lo+s, $elays
integrati*e
'eha*ioral sciences
Systems DynamicsC Aext #rea-thro$ghD
Systems 3utonomics
complexity management
biological% genetic metaphors
sel! organi7ing and learning
Systems 3utonomics
complexity management
biological% genetic metaphors
sel! organi7ing and learning
'iology
Summary and (onclusions
System Dynamics is an effecti*e and usefu method for the anaysis of compex systems,
integrating the su!systems and parts into a whoe, which can then !e simuated to de*eop insight into
its dynamic !eha*ior# (*en without simuation, the causa diagrams impro*e the understanding of the
structure and the "ey determinants of system !eha*ior# .orrester states,
System dynamics can pro*ide a dynamic framewor" to gi*e meaning to detaied facts, source
of information, and human response# Such a dynamic framewor" pro*ides a common
foundation !eneath mathematics, physica sciences, socia studies, !ioogy, history and e*en
iterature#=
6ut System Dynamics is not without strong critics from many 9uarters# Kne strong criticism is that the
eary modes of System Dynamics <ha*e not stood the test of time,= and ha*e faied in their
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ESD.83, Fall 2001
Research Seminar in Engineering Systems
<predicti*e powers#= In the ream of socia sciences, we
2
!eie*e that this is a specious argument#
(,though we unconditionay agree that prediction is the sine ua non for the physica sciences#) It is
important to separate anaysis0decisions from resuts# The foowing is a simpe exampe to iustrate
the point# 6et O1#88 on a fair coin toss# 5ain O2#>8 if ca tais and tais come up# 5ain O1#>8 if ca
heads and heads come up# Ktherwise, there is no pay%off# ,s rationa !eings, we woud !et on tais
since it has a higher pay%off# ?owe*er, ha*ing made such an anaysis and decided on tais, it is
possi!e that heads comes up, and we ose the !et# PuestionE was the decision a !ad oneQ )ot at a,
good decisions can ha*e !ad outcomes# $e !eie*e that it is more meaningfu to de!ate the issues and
gain a deeper understanding of the pro!em that argue the merits of prediction# )o one can predict the
future#

,nother strong criticism is the omission of "ey *aria!es in the eary .orrester modes in
Urban Dynamics, and The Limits to Growth# It is safe to say that no mode can incude a the
*aria!es that woud ma"e the representation cosed and compete# The *ery notion of a mode is
simpification and a!straction# Dndou!tedy, the omission of important technoogica change *aria!es
in .orrester's eary modes presented an incompete *iew of the pro!em# .urthermore, the omission of
important socia *aria!es, we !eie*e is a serious defect, particuary in socia science# The mitigating
factor, howe*er, is that the *ery existence of the mode with a its faws was a!e to surface
meaningfu de!ate of the pro!em that was studied# $e !eie*e that it is through rationa de!ate that a
deeper understanding is de*eoped and how methodoogies impro*e# $e !eie*e that in these
situations it is usefu to as"E <suppose we incude *aria!es x, y, and +, and extend the system
!oundaries thus and so, what new insight can we getQ= Deming is attri!uted with saying, <, modes
are fawed, some are usefu#= $e agree#
,nother criticism is the <arrogance and hu!ris= in which the resuts were percei*ed to ha*e
!een presented# This is a styistic issue# $e find this !eyond our means to address# It is fair to say that
in any circumstance, it is aways appropriate to ha*e some humiity and conser*atism in one's caims#
System Dynamics is a usefu and effecti*e method for the in*estigation of compex socia
systems# K*er the past decades, its appica!iity has !een demonstrated in a wide *ariety of
appications# ?owe*er, this is hori+onta growth, where the method is appied more widey# 6ut, in our
opinion with imited research and in*estigation, there are few and rare exceptions in new !rea"through
thin"ing# $e !eie*e that System Dynamics needs another .orrester to dri*e its next stage of
conceptuai+ation where it wi !e a!e to so*e e*en more intracta!e pro!ems# There are some
indicators where these !rea"throughs may come from, and we anticipate them eagery#
2
V# Tang
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ESD.83, Fall 2001
Research Seminar in Engineering Systems
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