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The design structure matrix (DSM; also referred to as dependency structure matrix, dependency structure method, dependency source matrix, problem solving matrix (PSM), incidence matrix, N2 matrix, interaction matrix, dependency map or design precedence matrix) is a simple, compact and visual representation of a system or project in the form of a square matrix. It is the equivalent of an adjacency matrix in graph theory, and is used in systems engineering and project management to model the structure of complex systems or processes, in order to perform system analysis, project planning and organization design. Don Steward coined the term "design structure matrix" in the 1960s, using the matrices to solve mathematical systems of equations.

A design structure matrix lists all constituent subsystems/activities and the corresponding information exchange, interactions, and dependency patterns. For example, where the matrix elements represent activities, the matrix details what pieces of information are needed to start a particular activity, and shows where the information generated by that activity leads. In this way, one can quickly recognize which other activities are reliant upon information outputs generated by each activity. The use of DSMs in both research and industrial practice increased greatly in the 1990s. DSMs have been applied in the building construction, real estate development, semiconductor, automotive, photographic, aerospace, telecom, small scale manufacturing, factory equipment, and electronics industries, to name a few, as well as in many government agencies. DSM analysis can also be used to manage the effects of a change. For example, if the specification for a component had to be changed, it would be possible to quickly identify all processes or activities which had been dependent on that specification, reducing the risk that work continues based on out of date information. Two main categories of DSMs have been proposed: static and time based. Static DSMs represent systems where all of the elements exist simultaneously, such as components of a machine or groups in an organization. A static DSM is equivalent to an N2 chart or an adjacency matrix. The marking in the off diagonal cells is often largely symmetrical to the diagonal (e. g., in an organizational DSM indicating interactions between teams, there are both a mark from team C to team E and a mark from team E to team C, thus indicating that interactions are mutual). Static DSMs are usually analyzed with clustering algorithms. A time based DSM is akin to a precedence diagram or the matrix representation of a directed graph. In time based DSMs, the ordering of the rows and columns indicates a flow through time: earlier activities in a process appear in the upper left of the DSM and later activities appear in the lower right. Terms like “feedforward” and “feedback” become meaningful when referring to interfaces. A feedback mark is an above diagonal mark (when rows represent output). Time based DSMs are typically analyzed using sequencing algorithms, that reorder the matrix elements to minimize the amount of feedback marks, and make them as close as possible to the diagonal. Sequencing methods try to order the matrix elements such that no feedback marks remain. After tearing a partitioning algorithm is reapplied. Minimizing feedback loops gets the best results for Binary DSM, but not always for Numeric DSM or Probability DSM. Sequencing algorithms (using optimization, genetic algorithms) are typically trying to minimize the number of feedback loops and also to reorder coupled activities (having cyclic loop) trying to have the feedback marks close to the diagonal. Yet, sometimes the algorithm just tries to minimize a criterion (where minimum iterations is not the optimal results).

Interactions between various aspects (people, activities, and components) is done using additional (non square) linkage matrices. The Multiple Domain Matrix (MDM) is an extension of the basic DSM structure. A MDM includes several DSMs (ordered as block diagonal matrices) that represent the relations between elements of the same domain; and corresponding Domain Mapping Matrices (DMM) that represent relations between elements of different domains. The use of DSM has been extended to visualize and optimize the otherwise invisible information flow and interactions associated with office work. This visualization via DSM allows the Lean Body of Knowledge to be applied to office and information intensive flows.

Web Portal of DSM Community: http://www. dsmweb. org
International Design Structure Matrix Conference: http://www. dsm conference. org