Imagine this common scenario: A shipper and carrier agree on a freight rate, but they have different ideas about what “delivery window” means. The shipper expects a precise 2-hour slot, while the carrier thinks it means a 4-hour period. This business communications confusion causes disputes, possible fines, and tension – all because of unclear definitions. Further, without standard meanings for terms like “inventory on-hand” or “shipment visibility,” this confusion extends to technology adoption. Indeed, especially for supply chain commerce, companies struggle to innovate because of their disjointed systems are not interoperable. In turn, the root cause of these data interoperability problems is our lack of clarity in basic business communications and terminology.

In this article, I’ll first look at how commonplace it is for different supply chain organizations to misunderstand each other. This includes specific supply chain examples of how lapses in operational clarity cause major problems within supply chains. Lastly, I’ll identify how the poor use of business terminology is impeding technological innovations such as supply chain visibility, intermodal interoperability, and data interoperability to name a few.

“It is not necessary to change. Survival is not mandatory.”

W. Edwards Deming

1. First, What Is Clarity When It Comes to Business Communications.

Without a doubt, clarity is essential in business communications. Organizations must ensure clear communication among employees so everyone understands their work tasks and how to collaborate effectively. Additionally, what is communicated must be understood in context. So, let’s look at a specific example.

a. “Delivery” Definition: Example of the Challenges with Conveying Meaning in Business Communications.

Supply chains use hundreds of industry-specific business terms in their day-to-day communications. Further, these business terms can be conveyed by various mediums such as verbally or digitally. As an example, let’s take the word “delivery” in the context of a supply chain operation. Below are two definitions of delivery.

Dictionary Definition of “Delivery”

“the act of taking goods, letters, packages, etc. to people’s houses or places of work”

Cambridge Dictionary

DCSA Definition of “Delivery”

“The action of delivering a container to a customer location. The delivery is completed once the possession of the container is legally transferred to the customer from the haulier.”

Digital Container Shipping Association (DCSA)

Although both definitions are valid, they offer clarity only in specific situations and contexts. For instance, the Cambridge Dictionary is too vague for supply chain operations. It neither provides criteria for determining if a delivery was completed nor specifies what is delivered (e.g., part of a shipment, a newspaper, a baby). On the other hand, while the DCSA definition is tailored for the delivery of ocean containers, it does not apply well to other types of shipping. Specifically, much of the context in the DCSA definition is either irrelevant or unclear for other transportation modes such as parcel or Less-Than-Truckload (LTL).

To sum it up, this example of a “delivery” definition illustrates the challenges in business communications to make things easily understandable. This is particularly evident in complex supply chains where organizations deal with numerous tasks and collaborate with various other organizations and stakeholders. As per the previous example, the term “delivery” can have multiple meanings within different functions of the supply chain and across diverse organizations. Furthermore, misunderstandings within supply chains are more apt to happen as employees often work with a wide array of individuals from different organizations with whom they are not familiar.

“Clarity is the preoccupation of the effective leader. If you do nothing else as a leader, be clear.”

Marcus Buckingham

2. Supply Chain Examples Where Things Go Wrong Due to Misunderstandings in Business Communications.

So in the example above, I just focused on one word, “delivery,” within a person-to-person communication exchange. In reality, supply chain professionals and their systems use hundreds of operational terms like “shipped,” “delivered,” and “paid” to communicate across the supply chain. As a result, this lack of clarity not only hampers business communications but also impedes technology adoption. Undeniably, digital technologies require clear business definitions to work correctly. Consequently, poor communication negatively impacts both operational performance and supply chain digitization efforts. Unfortunately, there are countless instances where misunderstandings occur due to different interpretations of business terms. Below are some examples:

Examples of Supply Chain Miscommunications

• Delayed Deliveries. A supplier mishears the delivery date as “15th” instead of “5th”, leading to a delayed shipment of critical components.
• Increased Costs. A procurement team fails to notice a clause about additional fuel surcharges, resulting in higher-than-expected transportation costs.
• Unfulfilled Orders. Due to a miscommunication about inventory levels, a retailer accepts customer orders for products that are actually out of stock.
• Misallocation of Resources. A forecasting team misinterprets a sales projection, resulting in overproduction of one product and underproduction of another.
• Regulatory Compliance Failures. Import staff misunderstand updated customs regulations, leading to detained shipments and potential fines.
• Quality Control Issues. R&D fails to clearly specify new material standards, resulting in prototype failures and rework.
• Customer Dissatisfaction. Customer service reps provide conflicting information about order status, leading to frustrated calls and potential lost business.

“Clarity precedes success.”

Robin Sharma

3. Examples of Tech Innovations Stalled in Supply Chains Due to Operational Clarity Issues.

Indeed, the absence of robust operational definitions acts as a roadblock to realizing the full potential of supply chain innovations. Without a shared understanding of key terms and processes, organizations struggle to align their strategies, workflows, and systems properly. This ambiguity leads to miscommunication, errors, inefficiencies, and a lack of standardization.  As a result, this adversely affects both operations and digital technology initiatives. Indeed, ambiguous business terminology is impeding technological innovation within our supply chains. Below are examples where a lack of operational clarity is hobbling technology adoption.

Revealing Examples Of How Murky Operational Definitions Really Foul Up And Make Feeble Supply Chain Interoperability

a. Business Glossaries

Supply chains have many overlapping business glossaries based on ambiguous dictionary definitions. This is especially a problem with cross-border trade where there are many stakeholders that need absolute clarity when transmitting operational, compliance, and financial information.

b. Supply Chain Visibility.

Too much data with little insights due to lack of business specificity. For instance, is visibility needed to “find stuff”, identify choke points, measure performance, or for future planning?

c. Intermodal Interoperability.

Lack of cooperation and specificity hobbles digital tech adoption. Data interoperability challenges are immense between various stakeholders to include rail, trucking, ocean carriers, and 3rd party service providers.

d. Data Integrations.

Data gets “lost in translation” due to lack of business definition. Difficult to adopt data-intensive technologies such as AI and data analytics when what is transmitted is not understood by the receiver, either the system or human.

e. Emerging Information Tech.

Many supply chain tech projects fail due to operational clarity issues. For instance, this includes tech like digital identity, knowledge graphs, digital transformation, data analytics, digital freight bill processing, and Decision Intelligence to name a few.

For more details on these examples, see my article, Revealing Examples Of How Murky Operational Definitions Really Foul Up And Make Feeble Supply Chain Interoperability.

“People work in the system. Management creates the system.”

W. Edwards Deming

The Way of Digital Transformation: A Business First, High Tech Reinvention 0f Processes and Culture

Conclusion.

So, this lack of clarity with supply chain terminology and definitions hobbles technology adoption. Indeed, especially for supply chain commerce, companies struggle with disjointed systems due to data interoperability caused by the lack of clarity in basic business terminologies. Specific examples of stalled technological innovations include supply chain visibility, intermodal interoperability, and data interoperability to name a few. Without a doubt, it is time for supply chain professionals to work together to fix these business communications issues in order to improve supply chain operations and fully leverage new technologies.

Need help with an innovative solution to make your supply chain systems work together? I’m Randy McClure, and I’ve spent many years solving data interoperability and visibility problems. As a supply chain tech advisor, I’ve implemented hundreds of successful projects across all transportation modes, working with the data of thousands of shippers, carriers, and 3rd party logistics (3PL) providers. I specialize in proof-of-concept and operational pilot projects for emerging technologies. If you’re ready to modernize your data infrastructure or if you are a solution provider, let’s talk. To reach me, click here to access my contact form or you can find me on LinkedIn.

More References.

See below, for more references on how the lack of clear business terminology is hobbling the adoption of new technologies.

• Data Ladder’s article, The impact of poor data quality: Risks, challenges, and solutions, provides more details on the risks of poor data quality.
• Wikipedia’s Operational Definition details what an operational definition is and provides example of the consequences when operational clarity is lacking. 
• Claravine’s articles, The Urgency of Digital Data Standards and Data Standards Defined and Explained: Learn How to Create Data Standards provide business cases for data standards and lessons-learned in the marketing industry.
• Peter Carter’s article, Lack of Traceability Standards Not the Issue, points out that the lack of digital trade standards is not necessarily the issue – rather the lack of awareness of those standards
• segura’s article, Supply Chain Compliance – Why we need shared industry data standards, provides examples of increasing business reporting requirements in the Fashion Industry that are not aligned such as deforestation, human rights, microplastics, sustainability, and much more.
• See SC Tech Insight’s article, Poor Operational Definitions Impede Supply Chain Tech Adoption: Now Is the Time For A Big Change, that looks at the need for clear, measurable definitions to improve data interoperability.

Poor Operational Definitions Impede Supply Chain Tech Adoption: Now Is the Time For A Big Change

For more from SC Tech Insights, see the latest articles on Interoperability, Data, and Supply Chain.