Semantic Models for Internet Supply Chain Collaboration

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* Essay: REA, a semantic model for Internet supply chain collaboration by Robert Haugen, CTO, Logistical Software LLC and William E. McCarthy, Arthur Andersen Alumni Professor, Michigan State University, 1/21/2000



REA refers to the Resource-Event-Agent business model developed by Professor William E. McCarthy. REA was originally designed for accounting. Robert Haugen collaborated with McCarthy to extend REA for supply chain management.

"REA is a superior accounting model, but its popular acceptance has been held back by the conservativism of the accounting profession. (Needless to say, accountants are conservative for good reasons, among them legal constraints.)

Internet supply chain collaboration and Internet trading communities may be a more fertile field for the REA model to gain popular acceptance. The REA model is much better than any competing semantic model for multi-company supply chain collaboration. The Internet as a means of coordination is driving supply chain collaboration very quickly, but there is no accepted standardized semantic model that can actually encompass all supply chain activities. A standard, non-proprietary semantic model can make supply chain collaboration more like a public utility (the semantic Web) that businesses plug into than the current slow and expensive collaboration projects.

REA can become the semantic Web for supply chains. But it will take the concerted efforts of the REA community (and new recruits) to make it happen. This paper is intended to further that effort."