This is the oldest application area of System Dynamics. In fact, the System Dynamics methodology had been originally invented by Jay Forrester to describe processes of factory automation.

Although this is the original application of the methodology, it is not commonly used today for such purposes. Most people nowadays prefer a different world view for the description of factory automation processes, namely that of a process-oriented discrete event simulation, as this world view allows us to study better phenomena such as deadlock and starvation in a system.

Typical tools for such purposes would include ARENA, and there exists also a Modelica implementation of that tool and modeling methodology, called the ARENALib.

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References:

1. Kelton, W.D., R.P. Sadowski, and D.T. Sturrock (2003), Simulation with Arena, 3^rd Edition, McGraw-Hill, 672 p.
2. Prat, V.S., A.Urqu�a, and S. Dormido (2006), ARENALib: A Modelica Library for Discrete-Event System Simulation, Proc. 6^th Modelica Conference, Vienna, Austria, pp.539-548.