The Application of System Dynamics to Project
Management – Introduction to the Virtual Issue
of System Dynamics Review
David N. Ford and James M. Lyneis (Guest Editors)
System dynamics has been successfully applied to project management for many
years. This work started in the 1960s, and continues to this day. By our count, more
than 120 books, journal articles, and conference papers have in some way dealt with
such applications.
The application of system dynamics to project management can be viewed through
three lenses. First, generic project structures have been developed that capture
fundamental project dynamics and are common to all projects. These include the rework
cycle and the feedback structures related to rework/errors and productivity. Second,
project dynamics theory has been, and continues to be, developed to consider
additional dynamics that are common to categories of projects or specific projects.
Examples include model structures of concurrency in projects, interactions between
projects (e.g., resources and technical interdependencies), and interactions between
development efforts and other resource needs, such as for maintenance and “bug
fixing”. Third, system dynamics has been applied to project management practice
across a wide range of domains and for several purposes. Papers in this virtual issue
illustrate each of these threads.
The fourteen papers published in the System Dynamics Review about project
management represent some of the most important aspects of system dynamics for
project management. We have included nine of those fourteen papers in this virtual
issue. The System Dynamics Review rightly focuses on the first two lenses that deal
with theory. However, application to the study of project management is also an
important focus for system dynamics and there are numerous papers in this area
published elsewhere. Therefore we have attached a bibliography of the majority of the
known publications dealing with both system dynamics and project management to
supplement the references provided in the papers included in this virtual issue.
The first paper in this virtual issue is a survey paper that we wrote in 2007. It provides
a framework for understanding the application of system dynamics to project
management. It describes generic structures and behaviors underlying project dynamics
– the rework cycle and feedback effects – and the areas to which system dynamics has
been applied – project-to-project learning, project planning and estimating, risk
assessment, change management, and project control.
Several of the selected papers elaborate on the theory of the dynamics of a single
project. Two of those papers illustrate the development and extension of generic project
management structures. The paper by Abdel-Hamid and Madnick (1989) focuses on the
representation of productivity in a model of software development, and distinguishes
between three different concepts of productivity: potential, actual, and perceived.
Copyright © 2013 System Dynamics Society
Potential productivity is the maximum level of productivity that a team can accomplish
under ideal circumstances; actual productivity reflects the impact of technical and
human factors in reducing productivity below ideal, such as inexperience, fatigue,
communication difficulties; perceived productivity recognizes that managers do not
instantaneously know actual productivity on a project, but can only perceive it with some
delay and measurement error. These distinct productivity concepts are common to most
system dynamics models of projects, and in fact are usually applied to the project’s
“error” or “rework” fraction as well as productivity. In the second paper Ford and
Sterman (1998) discuss in detail one version of the “rework cycle” that is at the heart of
project dynamics (the survey paper discusses another version). They represent the
explicit role of quality assurance in dynamics, concurrence within and between project
phases, as well as the allocation of resources to different project work backlogs.
Four of the selected papers describe the development across researchers and time
of a relatively new part of project management theory – tipping points. In his study of
multi-project dynamics Repenning (2000) introduces the theory of how interactions
between projects that are technically and temporally interdependent can lead to tipping
point dynamics. In this case, upstream and downstream projects share resources, and
the adequacy of upstream project completion affects the workload on downstream
projects. Repenning demonstrates how resource constraints in combination with a
temporary shortage of resources can cause an organization to “tip” from a mode of high
overall performance to low overall performance. Black and Repenning (2001) elaborate
on these dynamics and illustrate with a case example. Taylor and Ford (2006) expand
the basic theory of the rework cycle and feedback effects to develop tipping point
structures and behaviors that can cause single project progress to switch from forward
to backward (in terms of fraction complete) and drive projects to success or failure.
Robustness against tipping point induced failures in the design and management of
projects is defined and developed as an approach to improving project management
practice. Rahmandad and Weiss (2009) extend the tipping point concept to interactions
between
software
development
efforts
(the
“upstream”
project)
and
maintenance/support needs of systems with customers (the “downstream” project).
They show, illustrated with two case examples, how resource constraints coupled with
temporary resource shortages can shift an organization from a mode of continually
delivering software products of high quality to one of continually delivering products of
low quality.
The final two papers elaborate on the practical application of system dynamics.
Rodrigues and Bowers (1996) compare traditional static approaches to project
management (network models and Gantt charts) to dynamic approaches, and introduce
the concept of strategic project management into the system dynamics project
management literature. Lyneis, Cooper, and Els (2001) build on the concept of strategic
project management and illustrate it with the application of system dynamics to the
planning, risk assessment, and control of a software development project. They then
show how system dynamics was used to learn from the experiences of three similar
software projects at the organization.
While the papers in this issue provide a thorough review of the theory and selected
applications, there is significant work published elsewhere. Some of this work
Copyright © 2013 System Dynamics Society
elaborates on aspects of the theory, but much of it deals with applications. As should be
expected, applications-oriented papers are often published in practitioner journals.
Important application papers published elsewhere include, but are not limited to: Cooper
(1980); Godlewski, Lee, and Cooper (2012); Ford and Sobek (2005), and Williams,
Eden, Akermann, and Tait (1995). The survey paper we wrote in 2007 provides an
overview of many of the different applications of system dynamics to project
management, with references to additional application papers.
We recommend the papers in this virtual issue as a starting point for understanding
the significant contributions which system dynamics has made to project management.
We expect the body of literature to continue to grow.
References
Abdel-Hamid TK, Madnick SE. 1989. Software productivity: Potential, actual, and perceived.
System Dynamics Review 5(2): 93-113.
Black LJ, Repenning NP. 2001. Why firefighting is never enough: Preserving high-quality product
development. System Dynamics Review 17(1): 33-62.
Cooper KG. 1980. Naval ship production: A claim settled and a framework built. Interfaces 10(6):
20-36.
Ford DN, Sobek D. 2005. Modeling real options to switch among alternatives in product
development. IEEE Transactions on Engineering Management. 52(2): 1-11.
Ford DN, Sterman JD. 1998. Dynamic modeling of product development processes. System
Dynamics Review 14(1): 31-68.
Godlewski E, Lee G, Cooper K. 2012. System dynamics transforms Fluor project and change
management. Interfaces 42(1): 17-32.
Lyneis JM, Cooper KG, Els SA. 2001. Strategic management of complex projects: A case study
using system dynamics. System Dynamics Review 17: 237–260.
Lyneis JM, Ford DN. 2007. System dynamics applied to project management: A survey,
assessment, and directions for future research. System Dynamics Review 23(4):157-189.
Rahmandad H, Weiss D. 2009. Dynamics of concurrent software development. System Dynamics
Review 25(3): 224-249.
Repenning NP. 2000. A dynamic model of resource allocation in multi-project research and
development systems. System Dynamics Review 16(3): 173-212.
Rodrigues AG, Bowers J. 1996. System dynamics in project management: A comparative
analysis with traditional methods. System Dynamics Review 12(2):121-139.
Taylor T, Ford DN. 2006. Tipping point dynamics in development projects. System Dynamics
Review 22(1): 51-71.
Williams TM, Eden CL, Akermann FR, Tait A. 1995. The effects of design changes and delays on
project costs. Journal of the Operational Research Society 46(7): 809-818.
Copyright © 2013 System Dynamics Society