These diagrams are an important way to visualize and understand how a system of different elements is working together. As Donella Meadows wrote in Thinking in Systems,”If you understand the dynamics (behavior over time) of stocks and flows, you understand a good deal about the behavior of complex systems.”
In describing stocks and flows, Donella Meadows stated, “A system stock is just what it sounds like: a store, a quantity of material or information that has built up over time. It may be a population, an inventory, the wood in a tree, the water in a well, the money in a bank…Stocks change over time through the actions of flows, usually actual physical flows into or out of a stock–filling, draining, births, deaths, production, consumption, growth, decay, spending, saving. Stocks, then, are accumulations, or integrals, of flows.”
Below is a more complex example of a stock and flow diagram that illustrates the volume of living wood in a forest from this excerpt from Thinking in Systems.
Most individual and institutional decisions are designed to regulate stocks. If inventories rise too high, then prices are cut or advertising budgets are increased, so that sales will go up and inventories will fall again. If the stock of food in your kitchen gets low, you go to the store. As the stock of growing grain rises or fails to rise in the fields, farmers decide whether to apply water or pesticide, grain companies decide how many barges to book for the harvest, speculators bid on commodity markets, cattle growers build up or cut down their herds. Water levels in reservoirs cause all sorts of corrective actions if they rise too high or fall too low. The same can be said for the stock of money in your wallet, the oil reserves owned by an oil company, the pile of woodchips feeding a paper mill, the concentration of pollutants in a lake. People monitor stocks constantly and make decisions and take actions designed to keep them at acceptable levels. Those decisions add up to the ebbs and flows, successes and problems, of socioeconomic systems. Systems thinkers see the world as a collection of stocks and mechanisms for regulating stocks by manipulating flows. That means they see the world as a collection of feedback processes.
Thinking in Systems, © Donella H, Meadows, Dartmouth College
Most individual and institutional decisions are designed to regulate stocks. If inventories rise too high, then prices are cut or advertising budgets are increased, so that sales will go up and inventories will fall again. If the stock of food in your kitchen gets low, you go to the store. As the stock of growing grain rises or fails to rise in the fields, farmers decide whether to apply water or pesticide, grain companies decide how many barges to book for the harvest, speculators bid on commodity markets, cattle growers build up or cut down their herds. Water levels in reservoirs cause all sorts of corrective actions if they rise too high or fall too low. The same can be said for the stock of money in your wallet, the oil reserves owned by an oil company, the pile of woodchips feeding a paper mill, the concentration of pollutants in a lake. People monitor stocks constantly and make decisions and take actions designed to keep them at acceptable levels. Those decisions add up to the ebbs and flows, successes and problems, of socioeconomic systems. Systems thinkers see the world as a collection of stocks and mechanisms for regulating stocks by manipulating flows. That means they see the world as a collection of feedback processes.
Thinking in Systems, © Donella H, Meadows, Dartmouth College 
