| 1 | Introduction and Overview: Purpose, Tools and Concepts of System Dynamics | |
| 2 | System Dynamics Tools Part 1: Problem Definition and Model Purpose | |
| 3 | System Dynamics Tools Part 2: Building Theory with Causal Loop Diagrams | |
| 4 | System Dynamics Tools Part 3: Mapping the Stock and Flow Structure of Systems | Assignment #1: Problem Definition and Model Conceptualization (PDF)
Issued in Lecture 1 - Individual assignment
The design and evaluation of high-leverage policies demand a long-term, dynamic perspective. The analyst or manager must be able to characterize the strategic problem, including its current symptoms and history. The time horizon should be explicit and must be long enough to include possible side effects, delayed responses to policies, and other feedbacks. This assignment develops your ability to develop a reference mode that graphically characterizes patterns of problem behavior over time in various situations. The assignment also develops your skill in constructing causal loop diagrams that capture the feedback structure of the system, and your ability to relate the structure in a causal map to the problem behavior in the reference mode. |
| 5 | System Dynamics Tools Part 4: Dynamics of Stocks and Flows | |
| 6 | System Dynamics Tools Part 5: Linking Feedback with Stock and Flow Structure | Assignment #2: Mapping the Stock and Flow Structure of Systems (PDF)
Issued in Lecture 4 - Individual assignment
This assignment will give you practice with the structure and dynamics of stocks and flows. Stocks and flows are the building blocks from which every more complex system is composed. The ability to identify, map, and understand the dynamics of the networks of stocks and flows in a system is essential to understanding the processes of interest in any modeling effort. |
| 7 | System Dynamics Tools Part 6: Linking Feedback with Stock and Flow Structure (continued) | |
| 8 | Growth Strategies Part 1: Modeling Innovation Diffusion and the Growth of New Products | |
| 9 | Growth Strategies Part 2: Network Externalities, Complementarities, and Path Dependence | Assignment #3: Formulating Models of Simple Systems (PDF)
Issued in Lecture 6 - Group assignment (groups of three people)
In the last assignment you explored the relationship between stocks and flows, focusing on how a stock changes as its rates of flow change. In this assignment you explore feedback—how levels can influence (or "feed back" to) the rates. This assignment gives you practice with the structure and behavior of fundamental feedback systems. These systems are building blocks from which more complex systems are composed. The assignment also sharpens your understanding of how system dynamics simulations actually work. |
| 10 | Growth Strategies Part 3: Modeling the Evolution of New Medical Technologies | |
| 11 | Interactions of Operations, Strategy, and Human Resource Policy: People Express | Assignment #4: Competitive Analysis Using System Dynamics (PDF)
Issued in Lecture 9 - Group assignment (groups of three people)
In the past fifteen years, managers, strategy scholars and economists have discovered the notion of positive feedback. Under such headings as increasing returns and network externalities, a variety of strategic frameworks and theories now recognize the importance of positive feedback loops in creating growth and conferring competitive advantage. Unfortunately, these frameworks, while suggestive, often are not sufficiently operational to help managers make strategic decisions. An important manifestation of this difficulty is the focus, particularly among so-called "New Economy" companies, on the “GBF” (Get Big Fast) strategy. Often, such firms (and their backers) assume that size confers competitive advantage without a particularly clear idea of which processes actually link size to success. The recent failure of many companies that pursued the GBF strategies is testament to the fact that successfully exploiting positive feedback for strategic advantage requires careful consideration of where such processes exist and where they don’t. This assignment gives you the opportunity to use your system dynamics skills to analyze competitive dynamics and formulate strategy. |
| 12 | Guest Lecture: Business Dynamics at General Motors (Nick Pudar, Mark Paich) | |
| 13 | Managing Hyper Growth: Lessons from People Express
End of 15.871 | Assignment #5: The People Express Management Flight Simulator (PDF)
Issued in Lecture 11 - Group assignment (groups of three people)
This assignment gives you a chance to apply your systems thinking skills to a complex real life problem in corporate strategy: the rise and fall of People Express Airlines. Explaining what happened and what might have been done to prevent their demise is a challenge. In this assignment you will first ‘fly’ the company yourself through a management flight simulator—a system dynamics model embedded in a realistic interface in which you will make strategic and operational decisions quarter by quarter. You will then draw on your experience running your own People Express to develop a conceptual model of the feedback structures responsible for the dynamics. Finally, you will use your conceptual model and experience in the management flight simulator to recommend policies for the sustainable success of People Express. The assignment provides an opportunity to integrate the skills we’ve been developing all semester, and gives you an exposure to a management flight simulator as a tool for the development of systems thinking skills and for policy design.
The People Express Management Flight Simulator is available from Global Strategy Dynamics. Another flight simulator that is relevant to the topics treated in the course is the B & B Enterprises Management Flight Simulator, which addresses similar issues of growth strategy and competition. A free demo version is available at Forio Business Simulations. |
| 14 | System Dynamics in Action: Re-engineering the Supply Chain in a High-Velocity Industry | |
| 15 | Managing Instability Part 1: Formulating and Testing Robust Models of Business Processes | |
| 16 | Managing Instability Part 2: The Supply Line and Supply Chains | Assignment #6: Structure and Behavior of Delays (PDF)
Issued in Lecture 13 - Group assignment (groups of three people), graded pass-fail
Delays are a critical source of dynamics in nearly all systems. Thus far in our modeling, however, we have represented delays in causal diagrams qualitatively. In this assignment you explore the structure and behavior of delays and test their responses to a range of inputs. The assignment helps you understand the dynamics of delays so that you can use them appropriately in more complex models. The assignment also develops your skills in model formulation and analysis. To do this assignment it is essential that you read chapter 11 in the text. |
| 17 | Managing Instability Part 3: Forecasting and Feedback: Bounded Rationality or Rational Expectations? | |
| 18 | Managing Instability Part 4: Business Cycles: Real Estate and Oil Tankers | |
| 19 | Guest Lecture: Jay W. Forrester | Assignment #7: Understanding Business Fluctuations: The Causes of Oscillations (PDF)
Issued in Lecture 16 - Group assignment (groups of three people)
Oscillations and cyclic phenomena are among the most common and important dynamic behaviors. The economy as a whole and many individual industries suffer from chronic instability in production, demand, employment, and profits, with resulting turnover of top management. Avoiding or tempering the swings of such industry cycles has proven difficult. This assignment develops your ability to formulate dynamic models of a business situation and analyze their behavior. The problem of concern centers on chronic instability in the management of production, inventories, and employment in a manufacturing firm. You will build on the model of a firm we developed in class and explore the causes of and cures for oscillations. The assignment also serves as an introduction to model-based policy analysis. |
| 20 | System Dynamics in Action: The Dynamics of Project Management-On Time and Under Budget | |
| 21 | System Dynamics in Action: Applications of System Dynamics to Environmental and Public Policy Issues | |
| 22 | System Dynamics in Action: Process Improvement in the Semiconductor Industry | Assignment #8: The Dynamics of Process Improvement (PDF)
Issued in Lecture 19 - Group assignment (groups of three people)
As competition has intensified, businesses have sought to improve not only their products but also their processes for producing goods or services. In the search for higher quality and productivity, firms have devised and deployed literally dozens of different improvement programs, including SQC, TQM, JIT, TPM, TBC, MAN, BPR, 6σ and many others. Some firms have achieved tremendous success with these process improvement techniques. Yet despite huge investments of time, money, and training, many firms—perhaps most—have found it difficult to realize sustained improvement from their efforts. Why do so many quality improvement programs fail? How can firms design sustainable improvement programs? What are the dynamics of process improvement? The model you will develop in this assignment will provide insight into these questions. |
| 23 | Guest Lecture: System Dynamics in Action - Jim Lyneis | |
| 24 | System Dynamics in Action: The Implementation Challenge
Conclusion: How to Keep Learning. Follow-up Resources, Career Opportunities, Course Evaluations | Assignment #9: Understanding Cost and Schedule Overrun on Product Development Projects (PDF) - courtesy of Prof. James Lyneis.
Issued in Lecture 22 - Group assignment (groups of three people)
Projects to design and build a new product or service, whether a one-of-a kind effort such as the Channel Tunnel between England and France, or more repetitive efforts such as new car product developments or software systems, are notorious for over-running their original schedule, or budget, or both. Such projects are increasingly important in our economy. For example, almost every new product or service today involves development of new software. Success in the market can depend on being on schedule and budget. This assignment builds your understanding of some of the factors driving success or failure on projects. |