The use of System Dynamic software tools are becoming a popular way of investigating complex problems. However, along with the use of these tools exists the risk of relying too heavily on the numerical part of the analysis and neglecting the preparation phase for analysis. Any modelling procedure in System Dynamic modelling goes through a conceptual phase that uses the Learning Loop approach. This phase is most often done unintentionally. Using the Learning Loop approach consciously facilitates the group modelling process to acquire four successive phases, i.e. Definition, Clarification, Confirmation and Implementation. This enables a clear structure in the process, from acquiring the task to documenting the results. Only by intentionally using the Learning Loop approach in a managed manner, can the full potential of the process be exploited. Qualitative analysis does not replace simulations with a computer model but simulations should serve as a continuation to reconfirm or refute qualitative hypothesis and a simulation should only occur when the mental model has been tested. Systems Analysis, including its thinking, analysis and dynamics, is not a method, but rather an adaptive learning behaviour. It is a behaviour that finds the optimally adapted method, applying at some times SD computer tools.
A simple approach was used to evaluate the potential human population that the pre-industrial Icelandic environment could sustain. A model was constructed that simulated the population size according to potential biological production available for livestock. Biological production was determined by the extent of the total poten-tial vegetation cover based on the Degree-day concept. Fluctuations in the mean an-nual temperature cause changes in the potential vegetation cover and as a conse-quence change the biological production sustaining livestock and ultimately human population. The simulation's results indicate that the potential population that the environment could sustain during the pre-industrial period fluctuated around 40-80 thousand. The results further indicate that the severe land degradation experienced after the settlement period had a marginal impact on the population size. The pre-historical population did however overshoot the natural sustainability on few occa-sions.
The workflow in System Dynamics may be seem to follow certain general flow patterns within the adaptive-iterative approach required. We constructed some diagrams to gain transparency and understanding of different tasks in the model-ling process. The modelling workflow involve systems analysis, group modelling and system dynamics. The systems analysis as executed during group modelling consists of three model building stages and one implementation task. The stages involves Definition, Clarification, Confirmation and Implementation. After defin-ing the issues and questions, the process evolves the Causal Loop Diagram (CLD) iteratively with the Stock and Flow Diagram (SFD), which form the construction drawings for the programming of the model incorporated as a System Dynamic Tool Diagram (SDTD). The third stage is the testing of the computerized model version created by the System Dynamic tool (SD-tool) and the fourth task is the implementation of the outputs into results and policies. This may be considered an iterative process in all the stages. Innovation is the emergent output from a proc-ess operating according to the learning loop: Finally the roadmap given to our students for going from question to model diagram is shown.
A new archetype, The Tyranny of Small Steps (TYST) has been observed. Explained through a system dynamics perspective, the archetypical behaviour TYST is an unwanted change to a system through a series of small activities that may be independent from one another. These activities are small enough not to be detected by the surveillance within the system, but significant enough to encroach upon the tolerance zone of the system and compromise the integrity of the system. TYST is an unintentional process that is experienced within the system and made possible by the lack of transparency between an overarching level and a local level where the encroachment is taking place. The Örby case study illustrates a real life manifestation of the TYST archetype in planning. The TYST illustrates the necessity for total transparency in any systems in order to avoid unintended consequence of the archetype. The TYST process may be regarded as a part of wide range of complex systems but depending on the conditions, it can remain dormant, and only become active when the conditions for lack of transparency are fulfilled.
Formal model analysis tools are essential elements in understanding how structure drives behavior. Conventional model analysis relies heavily on a time-consuming experimental iterative process. Current formal tools are not mature enough for application to most models. This paper presents a loop dominance analysis approach based on eigenvalue elasticity analysis (EEA). EEA, although a potentially strong formal model analysis tool, has drawn criticisms over the years for a number of reasons. The approach proposed in this study attempts to bring proper solutions to the issues raised by those criticisms. To this end, a ten-step procedure is proposed. Among the most prominent features of the proposed procedure is the ability to track the influences of feedback loops on a specific variable of interest. Others include the ability to track the loop dominance dynamics over time and an attempt to the codification of the proposed features of the EEA. The application of the proposed approach is demonstrated using a simple economic long wave model and two other models, all chosen from earlier methodological studies on formal loop dominance analysis. The results of these applications also facilitate the comparison of the proposed approach to other formal model analysis tools.
This paper investigates the dynamics of accumulation processes of strategic capabilities in manufacturing, i.e. cost, quality, time orientation and flexibility. The analysis is conducted with the help of an exploratory system dynamics model that represents a hierarchy of these accumulative capabilities. By applying a dynamic view, concepts from the operations management literature are tested and shortcomings are identified. In a further step, the exploratory model is parameterized with empirical data from a large international survey of manufacturing plants. Implications concern the distribution of managerial attention on the different capabilities and its dynamic consequences. The value of this paper lies in the insights gained by the transformation of a verbal model in a quantified simulation model and the learning resulting from simulation experiments.
The Methodology of System Dynamics claims to promote understanding of complex systems. Accepting this claim, the question Does experience or an education in System Dynamics help people to solve simple, dynamic problems? arises. It guides the conduction of our experiment. The first hypothesis about no influence of additional information for problem solving has to be accepted. The performances of two different information treatment groups are not significantly different. Our second hypothesis, that people with and without experience in System Dynamics will have the same performance, has to be rejected. A significant difference between the performances of experienced people and people with no or little experience exists. A possible reason for this circumstance is that an education in System Dynamics doesnt immediately, but over a longer time horizon, enables people to comprehend dynamic systems. At last, the experimental design will be discussed and several weaknesses will be pointed out.
Keywords: Experiment, Applicability of System Dynamics, Hypothesis Testing, Dynamic Problem, Education, Comprehension
The German Health Insurance System is balanced on the edge. Decision makers seem not successful in developing and implementing sustainable health policies, which ensure at least a balanced health insurance fund. Highly dynamic factors influence the health insurance fund situation and complicate the decision making. The System Dynamics Methodology is used to examine first possible causes of the enduring problem. In the formal simulation model, we include among other variables the population dynamics, personal income, contribution fraction and health expenses per capita as well as behavioral states of the agents. Second, the model is used to conduct simulation-based policy testing to find improved decision rules. The policy expenses reduction pressure forces the government to reduce health insurance ex-penses per request. It can improve the health insurance system situation best. The result will be a reduction of the health insurance fund shortfall. Other policies worsen the problem sig-nificantly due to increased oscillatory tendency in the health insurance system. As result of the study, the different policies are discussed separately.
Keywords: Soft System Dynamics, German Health Insurance, Sustainable Policy,
Co-Payment Policy
Hutchison Telecom Hong Kong had a problem. The telecoms Regulator, OFTA, wanted to take away some of its spectrum and use it to add yet another competitor into this already highly-competed market. Hutchison perceived that the proposed action would not only be unfavourable for Hutchison, but also for the consumer. But this view hadnt been accepted by the Regulator, when expressed in the form of traditional regulatory arguments. This case study describes how Hutchison commissioned and used a System Dynamics simulator of the Hong Kong wireless markets (2G and 3G, voice and data) to rigorously and transparently quantify the situation. The simulator used 1) interviews with many experts and stakeholders, including the regulator, 2) confidential company data, appropriately protected, 3) judicious calibration against 2G history and 3G plans, 4) optimization of 3G competitors pricing and investment strategies to game out future market evolution, under different regulatory decisions. Sensitivity testing showed that the remaining uncertainties did not alter the fundamental results: The regulators proposed action would not benefit the public. After due consideration, OFTA dropped its plans and will not bring in more 3G carriers. Both Hutchison and OFTA have done well for their respective stakeholders.
Cormorant fisherman on the Li River, China . Farmers tilling the rice terraces of Bali, Indonesia A red seahorse in the waters of St Vincent in the Southern Caribbean Alpenglow in the Dolomite mountains of Northern Italy these are some of the remarkable moments and amazing places that I have been privileged to photograph in my world travels and am delighted to share with you. They are all part of the wonderful but fragile systems that make up our world.