System dynamics
System dynamics is a computer-assisted methodology used to model and analyze the impacts of changes within interconnected systems. This approach allows users to study and predict outcomes related to various scenarios, such as hiring practices in businesses, educational policy changes, or the environmental effects of new infrastructure projects. Developed in the late 1950s by Jay W. Forrester, the discipline arose from the need to understand complex organizational behaviors, as evidenced by his work with General Electric's workforce management challenges.
At its core, system dynamics utilizes simulation techniques to visualize potential impacts and identify unintended consequences of proposed changes. By creating detailed models that incorporate multiple interrelated factors, stakeholders can assess how adjustments in one area may ripple throughout a system, affecting budgets, communities, and other critical elements. The methodology emphasizes the importance of feedback loops, which help track outcomes and refine simulations based on real-time data and responses.
Over the years, several software programs have been developed to facilitate system dynamics analysis, making it a valuable tool for governments, corporations, and educational institutions. As this approach gains traction, it is increasingly being integrated into school curricula, allowing students to engage with concepts from various disciplines while exploring the complexities of systemic change.
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System dynamics
System dynamics refers to a computer-assisted method of modeling the effects of change on any system of interrelated elements. It is a way to study, understand, predict, design, and manage how change affects any sort of system. This can include how hiring will affect a company; how a new education policy will affect schools, communities, and the economy; or how the construction of a new factory will affect the local infrastructure and the environment. It provides a way to see the full impact of a change in advance, identify and plan for unintentional side effects of that change, anticipate communication needs related to the change, and establish a course of action to make the change as successful as possible.
Background
Jay W. Forrester established the concept of system dynamics in the late 1950s. Forrester grew up on a ranch in Nebraska, which he credited for his practical, results-based outlook on life. After studying engineering at the University of Nebraska, he was made a research assistant at the Massachusetts Institute of Technology (MIT). At the time, MIT was creating experimental technology used by the military in World War II, and Forrester gained much practical experience in creating systems to resolve specific problems.
After the war, he continued his work at MIT and joined the Sloan School of Management in 1956. Through this position, he had a conversation with some managers from General Electric. They were struggling to understand why they sometimes had so much work that they had to put workers on extra shifts but then had to lay off those same workers only a few months later. The rise and fall in demand for their products was part of the answer; however, the General Electric managers knew there was more to it. Forrester gathered some information about the company's inventory, hiring practices, and employees. He soon determined that it was not the demand for products but some of the decisions made by the company that created workforce management issues. Forrester credited this as the beginnings of system dynamics.
In 1958, Forrester asked computer programmer Richard Bennett to write computer code to help with the calculations needed for system dynamics analysis. Instead, Bennett wrote the code for a compiler. A compiler is a program that takes information written in a computer language that is understandable to people and reorganizes and restates it in a language that is compatible with a computer's programming. This allows the computer to analyze the material, which is then returned as data to the researchers. Bennett called his compiler the Simulation of Industrial Management Problems with Lots of Equations, also known as the SIMPLE compiler.
Within a year, Alexander Pugh and Phyllis Fox created a computer language for generating simulation programs. The language, known as DYNAMO, was based on the SIMPLE compiler. It became the standard for programming system dynamic simulations for more than thirty years. Additional programs were also developed, including STELLA, Powersim, Simile, Vensim, and MapSys. With these and other programs, governments, corporations, schools, and non-profits worldwide use system dynamics to anticipate issues and test outcomes when considering new laws, programs, or any other type of significant change.
Overview
When Forrester did his analysis of the hiring issues experienced by General Electric, he revealed that there are hidden and unanticipated factors at work when changes are made. The General Electric executives thought that supply and demand was driving the fluctuations in their workforce; Forrester determined that the continual need to hire and lay off workers was actually a result of the way management made decisions. This can be the case during any type of change, from a government making a new law to a company establishing a new policy.
System dynamics uses computer-assisted mapping and modeling—creating virtual simulations based on the real-life variables of a situation—to determine probable outcomes and identify any potential issues or unintended consequences. By incorporating certain parameters to ensure the accuracy of the results, the simulation models can predict how the proposed change will affect all parts of the interrelated system. For example, if a school district is considering closing a school and consolidating all of the students into the remaining schools, a system dynamics modeling program can determine how the change will affect the students, the faculty, the support staff, the school district's budget, and any other related element that is programmed in to the simulation.
One important factor in system dynamics is the focus on taking a continuous view of the system. This type of analysis goes beyond looking at just the decisions that are made to examining the policies and culture behind them. For example, imagine a situation in which a government is trying to determine why a plan to provide more low-income housing has not helped to improve a neighborhood. The simulation for this problem would look not only at the amount of housing provided and the people who received housing, but also at how the type of housing and the number of units were determined and how the people who would live in the housing were chosen.
Another important aspect of system dynamics is feedback. As the effects of a decision, policy, or change are simulated on each aspect of the system, that feedback is incorporated into the simulation to help provide a full view of the modeled situation. The simulations also take into account potential anomalies and results or behaviors that would not be typical for the situation. For instance, the simulation for the plan to consolidate schools would have to take into account what might happen if many families opted to send their children to a private school instead.
In the decades since its origin, system dynamics has continued to provide a way for businesses, governments, non-profits, and schools to plan for the future. In the early part of the twenty-first century, new programs have made it even more accessible and user-friendly. Some schools are beginning to work system dynamics into primary and secondary curricula, allowing students to incorporate concepts of mathematics, social studies, economics, environmental issues, and other subjects as they work through potential scenarios for future changes.
Bibliography
Behavioral Modeling and Simulation: From Individuals to Societies. National Academies Press, 2008, pp. 129–35.
Forrester, Jay. W. "The Beginnings of the System of Dynamics." McKinsey Quarterly, Nov. 1995, www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-beginning-of-system-dynamics. Accessed 26 Jan. 2017.
"Introduction to System Dynamics." System Dynamics Society, www.systemdynamics.org/what-is-s/. Accessed 26 Jan. 2017.
Kirkwood, Craig W. "System Dynamics Methods: A Quick Introduction." Arizona State University, 12 Jan. 2013, www.public.asu.edu/~kirkwood/sysdyn/SDIntro/ch-1.pdf. Accessed 26 Jan. 2017.
"System Dynamics." JRC European Commission, forlearn.jrc.ec.europa.eu/guide/4‗methodology/meth‗systems-dynamics.htm. Accessed 26 Jan. 2017.
"System Dynamics." Massachusetts Institute of Technology, mitsloan.mit.edu/faculty-and-research/academic-groups/system-dynamics/. Accessed 26 Jan. 2017.
"Vensim Software." Vensim, vensim.com/vensim-software/. Accessed 26 Jan. 2017.
"What Is Systems Dynamics?" Washington University in St. Louis, socialsystemdesignlab.wustl.edu/what-is-system-dynamics/. Accessed 26 Jan. 2017.