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Denis R. Towill: Logistics Systems Dynamics Group, University of Wales, Cardiff, UK
ACKNOWLEDGMENT: This paper is based in part on the Keynote Address by the author to the International Conference on the Application of Multivariable Systems Conference, Bradford, UK, March 1994. The re-engineering of supply chains is always a team effort, and the author is particularly pleased to acknowledge the contributions of Dr Mohamed Naim, Danny Derry, and Joakim Wikner. Financial support for the project was provided by the EPSRC ACME Directorate under the grant "Logistical Dynamics of Supply Chain Management". This paper originally appeared in International Journal of Physical Distribution & Logistics Management, Vol. 26 No. 2, 1996, pp. 23-43.
Introduction
The discipline of industrial dynamics (ID), alternatively known as system dynamics and management system dynamics, has already been around for some 40 years. Broadly speaking it is the application of feedback thinking and control engineering concepts to the study of economic, business and organizational systems. The subject was pioneered by Jay Forrester at MIT[1], who included a model of a supply chain as one of his early examples of the methodology. Many of the engineering analogues subsequently proven useful in supply chain management are also of long standing, particularly the contributions of Tustin[2], Simon[3], and Burns and Sivazlian[4]. These will be recognized readily as originating from the "servomechanism" route to feedback thought as identified by Richardson[5].
As a consequence of using industrial dynamics in supply chain redesign we are able to generate added insight into system dynamic behaviour and particularly into underlying causal relationships. This new knowledge is readily exploited in the improved design, robustness and operating effectiveness of such systems[6]. The consequence is enhanced business performance when judged against world-class competition, typical criteria used being speed to market of new products and the rate at which we can turn around our stocks yet simultaneously satisfy customer demand.
Industrial dynamics is concerned with problem solving in living systems which bring together machines, people and organizations. It therefore links together hard control theory typified by Tustin[2] with soft system theory. The latter originated in biology[7] and philosophy[8], and at present is best summarized via the work of Checkland[9]. So the budding industrial dynamicist needs to be aware of the relevant tools as viewed from...