Definition:
System dynamics is a highly abstract method of modeling. It ignores the fine details of a system, such as the individual properties of people, products, or events, and produces a general representation of a complex system. These abstract simulation models may be used for long-term, strategic modeling and simulation. For example, a telephone network planning a marketing campaign may simulate and analyze the success of new data plan ideas without having to model individual customer interactions.
Further Reading:
Book: The Lean Machine by Dantar P. Oosterwal.