System dynamics (SD) is an approach to understanding the nonlinear behavior of complex systems over time using stocks, flows, internal feedback loops, and time delays.
System dynamics is a methodology and mathematical modelling technique to frame, understand, and discuss complex issues and problems.
System Dynamics key considerations:
- System– a group of independent but interrelated elements comprising an integrated whole
- systems thinking– the process of understanding how system elements interact to produce system behavior.
The systems are characterized by
- structure – composition of elements
- behavior – involved inputs, processes and outputs of material, energy and/or information
- interconnections – structural and functional relations between elements
- emerging properties-system properties that do not appear in individual elements (e.g. car individual parts cannot move by themselves)
Emergent properties is that it’s the property of the whole, and only exists as a whole, not a property of the component bits. Emerging properties have a fundamental impact on the system performance. Each organization will have unique emergent properties . emergent phenomena are best understood by observing a ‘pattern resulting from the interactions’ among multiple elements in a system including aspects of the environment.
In the System Dynamics methodology, a problem or a system (e.g., ecosystem, political system or mechanical system) is first represented as a Causal Loop Diagram.
A causal loop diagram is a simple map of a system with all its constituent components and their interactions. By capturing interactions and consequently the feedback loops (see figure below), a causal loop diagram reveals the structure of a system. By understanding the structure of a system, it becomes possible to ascertain a system’s behavior over a certain time period.
Stock and flow diagrams
Causal loop diagrams aid in visualizing a system’s structure and behavior, and analyzing the system qualitatively over time. To perform a more detailed quantitative analysis, a causal loop diagram is transformed to a stock and flow diagram. A stock and flow model helps in studying and analyzing the system in a quantitative way; such models are usually built and simulated using computer software.
A stock is the term for any entity that accumulates or depletes over time. A flow is the rate of change in a stock.