Imagine a global retail giant like Amazon. Every day, they handle millions of orders, each requiring precise coordination between suppliers, warehouses, and delivery services. As part of this logistics processing, there are thousands of data integrations between each node in Amazon’s supply chain. However, each of these integrations not only transmit data, but these digital interfaces also transmit meaning. This is what assures that the data sent was understood. This information enabler within the data flow is called semantic interoperability. Indeed without it, a simple misinterpretation of a product code or delivery date leads to delays, stockouts, and dissatisfied customers.

In this article, I’ll introduce you to this concept of semantic interoperability. More importantly, I’ll explain why it’s crucial for seamless supply chains. Indeed, supply chain professionals need to understand that this capability is essential for effective digital information sharing and collaboration. Currently, many of us are just focused on getting data files transferred, and not focused on real information exchange. This haphazard approach leads to misinterpreted data transmissions lacking actionable information for supply chain partners. As I’ll highlight, other industries are already recognizing the value of semantic interoperability. It’s time for the supply chain industry to do the same.

“The single biggest problem in communication is the illusion that it has taken place.”

George Bernard Shaw

1. Semantic Interoperability Defined. 

First, semantic interoperability is the ability of different systems, applications, and organizations to exchange meaningful information. In the context of modern supply chains, this means that all parties—suppliers, manufacturers, distributors, and retailers—can digitally communicate and understand each other’s data without any misinterpretation.

For instance, let’s take a typical data integration project. Here, the expectation is that if a source system transmits a product code data element, the receiving system should recognize and interpret it correctly. However, many times these system integration efforts do not interpret the data accurately. Without a doubt, organizations should have the reasonable expectation that when systems exchange meaningful data, it is processed accurately and efficiently. Indeed, this level of interoperability is crucial for reducing errors, improving coordination, and enhancing overall supply chain performance. For reference, below are two, but complementary definitions of semantic interoperability.

Semantic Interoperability Definitions 

“ability of computer systems and organizations to exchange data with unambiguous, shared meaning”

AIRM – Air Traffic Management reference vocabulary

“Ensuring what is sent is what is understood”

European Commission – EIF

So, the first definition from AIRM provides a longer description of semantic interoperability, while the shorter EIF definition clearly identifies its intent. Namely, that the most crucial component of communications is that both the sender and receiver have a mutual understanding of what was sent. Moreover, semantic interoperability ensures that the data is useful and actionable. 

2. Data Integration, Only the First Step Toward Semantic Interoperability.

Moreover, any discussion about semantic interoperability must include data integration, which is basically the transfer of data between systems. For instance, data integration consists of automating the process of file transfer using software versus manually uploading a file using Dropbox. However, this is just the first step toward semantic interoperability. 

Indeed, many businesses mistakenly view data integration as an end goal, leading to costly and time-consuming IT projects with unsatisfactory results. For instance, according to a survey by Digibee, IT organizations often spend up to 25% of their time on these types of data integration initiatives. The primary reason for these high costs is that IT teams, often working without much input from business stakeholders, are not only automating data transfer but also struggling to ensure that the data is understandable between systems. In essence, they are striving to achieve semantic interoperability, which is a more complex and rigorous challenge than just data integration.

“The difference between the right word and the almost right word is the difference between lightning and a lightning bug.”

Mark Twain

3. It Is Time to Recognize that Seamless Supply Chains Need More Than Just Data Integration.

Indeed, organizations outside the supply chain industry are recognizing that seamless exchange of digital information is more than just data integration. For example, there are many trade and government organizations like ICAO and the EU that see that semantic interoperability is the way to foster better collaboration and cooperation. Also, the EU’s European Interoperability Framework (EIF) is conducting extensive work to enable semantic interoperability. Click here to see what the EIF is doing to advance data interoperability within the Europe Union’s public administrations.

Meanwhile, most supply chains continue with costly data integration projects that produce dismal results. Indeed, it is time for the supply chain industry to recognize that semantic interoperability is the best way to assure that their data integration efforts result in actual Insights at reasonable costs. Today, many logistics organizations struggle to harness the power of data integration because the meaning of their data gets lost in translation. At the same time, other industries are making progress with semantic interoperability.

More References.

For a more detailed discussion on this subject, see my article, Achieving Logistics Interoperability: Achieving Logistics Interoperability: The Best Way to Breakthrough The Tangle Of Dumb Data Integrations.

Achieving Logistics Interoperability: The Best Way to Breakthrough The Tangle Of Dumb Data Integrations

“Effective communication is the best way to solve problems.”

Bradford Winters

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.

For more from SC Tech Insights, see the latest articles on Interoperability and Information Technology.