AbstractMan‐made systems are becoming more and more complex, so there is a necessity to analyse and simulate their dynamic behaviour over their whole life. To deal with these problems we require a holistic model of the operating system which includes the concept of life. This is defined on the basis of energy internally dissipated in the system, when it is treated as open and energy‐transforming. The holistic model of a system can be very useful for the space‐time‐life simulation of its condition at the design stage and for a model‐based diagnosis at the life stage. This procedure will substantially increase the reliability of operating systems and reduce the total life cy