Feedback Loops
Positive feedback loops Reinforcing loop Vicious cycle or virtuous cycle Growth generating mechanisms
Negative feedback loops Goal seeking feedback or balancing loop Actions are directed toward an objective
or target
Causal Loop DiagramsA diagram that shows causal
links among actions, information, and consequences.
Sometimes referred to as the influence diagram or directed graph.
Conventions in a Causal Loop DiagramRefer to the variables in the loop as
quantities that could rise or fall.Use nouns or noun phrases, not verbs.Phrase the variables positively.Do not use the loops to mean “and
then..”Be clear when you say “a variable
increase..”Keep diagrams simple to start with.
Example of a Negative Feedback Loop:The Tired-Sleep Loop
Tired Sleep
+
-
Behavior of a Negative Feedback Loop
Tiredness Level
0
5
10
Time
Tir
edn
ess
Lev
el
Tiredness Level
Example of a Positive Feedback Loop:The Cry-Depressed Loop
Cry Depressed
+
+
Behavior of A Positive Feedback Loop
Depression Level
0
500
1000
Time
Dep
ress
ion
Depression Level
Partial Model of Urban Growth and Decline (Combined Loops)
Services and Goods Needed Population Congestion of People & Buildings
Favorable Location
Traffic Dynamics(More Complicated Loop)
New Highways Underconstruction
Need for New Highways
Number of New Highways
Attractiveness of Driving on Highways
Number of Traffic Jams
System Archetypes (Adapted from The 5th Discipline by P. Senge)
Limits to GrowthShifting the BurdenEroding GoalsEscalationSuccess to the Successful
Limits to Growth
Growing Action Condition Slowing Action
Limiting Condition
Characteristics of Limits to GrowthPattern of behavior
Accelerated growth followed by slowing down leading to no more growth or accelerating collapse
Management principle Don’t push on the reinforcing loop,
remove or weaken the limiting sourceExamples: growth of a city, learning
process, growth of a “young” company
Shifting the Burden
Symptomatic "Solution"
Problem Symptom
Fundamental Solution
Side Effect
DELAY
Characteristics of Shifting the BurdenPattern of behavior:
Reliance on symptomatic solutions that seems to produce immediate positive results, leading to the avoidance of the fundamental solution.
Management principle: Focus on fundamental solution, use
symptomatic solution to gain time, not to replace fundamental solution.
Examples:credit cards, alcohol/drugs addiction, overtime work, QA inspection
Eroding Goals
Goal Pressures to Adjust the Goal
Gap
ConditionActions to Improve the Condition
DELAY
Characteristics of Eroding GoalsPattern of Behavior:
Relaxing on our Targets, lowering of standards.Management Principle:
Hold the Vision.Examples:Lowering of Quality Standards
by cutting budgets, Lowering Government Targets to balance deficit, Allowing endangered species to die to push industrialization
Escalation
A's Results
Activity by A
Results of A relative to B
B's Results
Activity by B
Characteristics of EscalationPattern of Behavior:
Two systems collide each other, where the welfare of one is dependent on the relative advantage over the other.
Management Principle: Look for a Win-Win Situation or pursue peaceful
actions that would not threaten the other side.Examples:Arms Race, Marriage Problem,
Transport Fares, Mindanao Conflict
Success to the Successful
Success of A Resources to A
Allocation to A instead of B
Resources to BSuccess of B
Characteristics of Success to the SuccessfulPattern of behavior:
Two systems compete for a limited resource or support. The more successful system starves the other.
Management principle: Break or weaken the coupling between the two
system. Balance the achievements of both systems.
Examples:work and family life, A slow learner and a fast learner, 2 products with limited funds.
Balancing Process with Delay
Actual conditions
Corrective ActionDelay
Characteristics of Balancing Process with Delay
Pattern of behavior The system seems to be on track, but we
suddenly overshoot our mark.Management principle
Aggressiveness produces instability. Be patient or make the system more responsive.
Examples: shower with hot water, cycles in manufacturing, EDSA 2
Tragedy of the Commons
Individual Activity of A
Individual Activity of B
Total Activity Delay Gain per individual
Resource Limit
Net Gain for A
Net Gain for B
Characteristics of Tragedy of the Commons
Pattern of behavior A lot of available resources for everyone
before, but is becoming scarce now.Management principle
Educate everyone and create self-regulation among everyone.
Examples:Exhaustion of secretariat pool, Deteriorating customer service, Zagu
Fixes that Fail
Problem Fix
Unintended Consequences
Delay
Characteristics of Fixes that Fail
Pattern or behavior There has been improvement before,
but now its not working.Management principle
Focus on long term solutions. Use short term fixes to buy time, while working on long term remedy.
Examples:Loans/Credit Card Use, Cutting back maintenance.
The Production Management Problem adapted from R.G. CoyleThe domestic manufacturing company
(DMC) produces washing machines for major retail companies. These companies tend to order large batches with required deliveries of about 6 weeks. The production of a washing machine is very simple. It involves the assembly of standard parts and the processing time is short.
The Production Management Problem adapted from R.G. Coyle
DMC has never been able to forecast the inflow of new orders. They cope with a very unpredictable order pattern. New orders accumulate into backlog which the company tries to keep down at a target level. The production manager considers two factors in setting the production rate.
The Production Management Problem adapted from R.G. Coyle
First, it aims to eliminate discrepancies between actual and target backlog over a period of 4 weeks.The backlog target is to complete the new orders in 6 weeks.
The Production Management Problem adapted from R.G. Coyle
Second, to keep up with the current order level, the production rate includes the average order rate to eliminate the discrepancy in the actual backlog and target backlog.
The Production Management Problem adapted from R.G. CoyleThe raw material manager tries to
keep raw material stock up to a target level, ordering raw materials to eliminate any discrepancies within a period of 4 weeks. The target level is based on smoothing production variations over 4 weeks and aiming to have sufficient stocks to cover 8 weeks of average production.
The Production Management Problem adapted from R.G. Coyle
To keep up with the current usage, the order rate is added with the average usage rate of raw materials which would eliminate the discrepancy between the desired stock level and actual stock level.
The Production Management Problem adapted from R.G. Coyle
Averaging Period for Order Rate
Average Order Rate
Desired Backlog of Orders
New Order Inflow Rate
Backlog Discrepancy
Production Rate
Time to Correct Order Backlog Discrepancy
Averaging Period for Production Rate
Average Production Rate
Desired Raw Material Stocks
Weeks of Average Production in Desired Raw Material Stock
Raw Material Stock Discrepancy
Raw Material Order Rate
Time to Correct Raw Material Discrepancy
+ +
-
+
Backlog of Orders
Weeks of Average Orders as Desired Backlog
-
+
+
+
+
+
Raw Material Arrival Rate+
Raw Material Stocks
+
-
-+
+
Summary
System dynamics is very relevant to dynamic problems and complements other management science tools.
SD deals with the behavior of the system and how it affects its future. This is more relevant to strategic management.
SD models come in two forms, the causal loop and a simulation model.
SD is very challenging and fun.
Selected References
The 5th discipline by P. SengeSystem dynamics modeling by G. CoyleHttp://www.uni-klu.Ac.At/~gossimit/
Links/bookmksd.htm (SD MEGALINK LIST)
Www.vensim.ComWww.pegasuscom.ComHttp://sysdyn.mit.edu/road-maps/
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