‘Systemic knowledge management’, presented in Paper I as a problem-solving methodology, is applied to hydraulic systems here in Paper II. The generic context of hydraulic systems is interrelated to a body of similar developments in science and technology through the concept of paradigms. The systemic component of this problem-solving method integrates ‘holism’ with ‘reductionism’. Systems science approaches offer a problem-solving methodology to decompose complexities into hierarchies. The knowledge management component is implemented through (i) categorising complexities at each hierarchy for customisation of solutions, (ii) challenging the underlying assumptions; and (iii) reorganising complexities as a way of adapting to subsequent changes. This paper contributes towards the substantiation of the postulate on the formation of paradigms and their subsequent shifts. The main focus of this paper is to illustrate the potentials of applying systemic knowledge management to hydraulic systems and in particular to flood forecasting and warning.