What is it?
System dynamics (SD) is a technique for strategic and policy simulation modeling based on feedback systems theory. It was invented in the late 1950s by Jay Forrester, a pioneer in engineering and computer design. Since then, SD has developed as its own field, distinct from the larger fields of operations research and management science to which it is related.
SD unites social and behavioral science with the nitty-gritty details of planning and accounting, and requires the careful design and construction of original models with many interacting variables. Although SD modeling is technically demanding, the logic and results of a good SD model are neither esoteric nor hard for decision makers to understand. And although SD models are sophisticated, they are also compact enough to run instantly on a laptop computer, permitting a whole series of alternative assumptions and scenarios to be tested quickly and thoroughly in interactive strategy development sessions.
Definition from the Systems Dynamics Society. https://www.systemdynamics.org/for-strategy
This first pencil and paper inventory control system [ a simulation Jay Forrester was working on in a project for General Electric] was the beginning of system dynamics.
Jay W. Forrester
Link to the McKinsey Article, here.
About Jay W. Forrester. Professor Emeritus of Management System Dynamics
Jay W. Forrester founded the growing field of system dynamics. His research includes the System Dynamics National Model, which generates the major observed modes of economic behavior; a new type of dynamics-based management education; and system dynamics as a unifying theme in pre-college education.
A pioneer in early digital computer development, Forrester invented random-access magnetic-core memory during the first wave of modern computers.
Forrester has received numerous awards for his books, nine honorary degrees from universities around the world, and the National Medal of Technology, awarded by the President of the United States.
MIT. Link to the Profile, here.
Resources
Suggested Readings
Jay W. Forrester, Industrial Dynamics, Productivity Press, Portland, Oreg., 1961.
Jay W. Forrester, Urban Dynamics, Productivity Press, Portland, Oreg., 1969. Jay W. Forrester, World Dynamics, Productivity Press, Portland, Oreg., 1971, second edition 1973.
Jay W. Forrester, Collected Papers of Jay W. Forrester, Productivity Press, Portland, Oreg., 1975.
Jay W. Forrester, “System dynamics as an organizing framework for pre-college education,” System Dynamics Review, Vol. 9, No. 2, 1993, pp. 183-94. (Also available as Memo D-4277-1, System Dynamics Group, Sloan School, MIT, Cambridge MA 02139.)
Donella H. Meadows, Dennis L. Meadows, Jørgen Landers, and William W. Behrens III, The Limits to Growth, Universe Books, New York, 1972.
George P. Richardson, Feedback Thought in Social Science and Systems Theory, University of Pennsylvania Press, Philadelphia, Pa., 1991.