System dynamics applied to project management: a survey, assessment, and directions for future research

Abstract

One of the most successful areas for the application of system dynamics has been project management. Measured in terms of new system dynamics theory, new and improved model structures, number of applications, number of practitioners, value of consulting revenues, and value to clients, "project dynamics" stands as an example of success in the field. This paper reviews the history of project management applications in the context of the underlying structures that create adverse dynamics and their application to specific areas of project management, synthesizes the policy messages, and provides directions for future research and writing. Copyright © 2007 John Wiley & Sons, Ltd. Syst. Dyn. Rev. 23, 157-189, (2007 ContextProjects abound in industry, public service, and many other endeavors. As a series of activities or tasks that (1) have a specific objective (scope) to be completed within certain specifications (requirements); (2) have defined start and end dates; (3) have funding limits; and (4) consume and/or utilize resources (Project Management Institute, 2000), projects have proven challenging to plan and manage. This is largely because project conditions and performance evolve over time as a result of feedback responses, many involving nonlinear relationships, and to accumulations of project progress and resources. This has made the application of system dynamics to project management a fertile and productive field of study. This paper surveys the large body of system dynamics work on projects, evaluates its progress, and suggests directions for future development.Many different types of models have been developed to improve project management. These models include some of the system features and characteristics addressed by system dynamics. For example, basic project models such as the critical path method explicitly model causally linked development activities and phases and cost control models use forecasted performance gaps (e.g., budget deficits) to allocate funds. More advanced models, such as the computational models developed by Levitt et al. (1999) and others, are quite system dynamics-like, as they include linked development activities as well as feedback. Another body of work models multiple projects, using system dynamics as well as other approaches. Surveying all of these works is beyond the scope of a single article. Therefore, we focus here on models of single projects built using the system dynamics methodology. But even models of single projects are too numerous to describe their structures or applications in detail. Therefore, in this article we focus on the most important and general model structures in conceptual form, and provide references to additional details. Our work is based primarily on the published literature and our experience using system dynamics to model projects. In particular, we describe contributions resulting from work we have done that has not, and very likely never will be, published or otherwise made available.The literature on system dynamics models of pro...

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