The application of system dynamics (SD) simulation to enterprise management

Abstract

The paper presents the background and some of the lessons learned from a project in which system dynamics (SD) simulation was applied in the enterprise environment. The organization simulated is a large commercial concern, developing and marketing new products as well as existing products in a highly competitive environment. SD simulation was used to examine business practices, validate corporate performance measures, train senior leaders in systems thinking, and to produce a forecast of long term profits and loss. The application of SD to enterprise simulation is not new; the scale of this application, and some of the techniques used for design and rollout make the project unique.