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Knowledge Graphs: AI needs context

Discover how knowledge graphs give AI the context to understand data and make manufacturing processes smarter and more efficient.
November 6, 2026
Employee Martijn van Kuijk
Geschreven door
Martijn

A long time ago, I worked as a student mentor, helping students with subjects like math, history and Dutch. It was a great side job because it allowed me to revisit these topics at a time when I could actually enjoy them. One day, I was helping a student with Dutch and got asked the question: What is context?

Well, imagine walking into a supermarket dressed as a pirate in the middle of autumn. People might give you some strange looks. But if you dress up as a pirate during Carnival, people will smile at you and hand you a beer. During Carnival, the context is right.

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Context makes all the difference. And the same applies to AI.

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The next generation of AI in manufacturing won't be won by whoever has the most data, but by whoever gives AI the right context.

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What happens when AI detects irregularities, but doesn't have the context to understand them? What if a technician halts a production line based on a false alert?

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For example:

  • Spindle vibrations spike by 45%, but AI doesn't know the product specifications stored in the ERP system, which could explain the increased vibrations.
  • The defect rate increases by 10%, but AI can't determine whether this is related to a specific supplier or a particular production line setup.
  • AI flags a revenue decline that negatively impacts your KPIs, without taking seasonal shutdowns into account.

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Without the right context, AI might identify a problem where there isn't one, or miss the actual cause of an issue.

What does context mean for AI?

For an AI agent, context is the complete set of instructions, information and environmental data available to the model at any given moment. It helps the agent reason, make decisions and take action.

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This is the foundational layer that determines whether an AI agent acts as a capable collaborator or makes confident but incorrect decisions based on hallucinations.

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This is also the core architectural principle behind Intelligence Center X (ICX): AI that meets your data where it lives, using knowledge graphs.

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Knowledge graphs: connecting data and giving it meaning

Instead of loading all information into a single data lake, a knowledge graph connects underlying data and systems.

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ERP, WMS and MES systems all speak different languages. Manually mapping the data between them is time-consuming and error-prone. In one system, something might be called a "part", while another refers to it as a "component". This makes it challenging to compare and understand data across systems.

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A knowledge graph provides the network of relationships between all these elements. Taxonomies and ontologies give this network structure and meaning. This allows AI to understand what things are and how they relate to each other. For example, it can recognize that a part and a component refer to the same thing.

  • Taxonomies categorize your shop floor (e.g., Machines → CNC Mills → 5-Axis Mills).
  • Ontologies define how things relate and interact (e.g., Spindle S-12 [is part of] 5-Axis Mill M3; M3 [is running] Order #8812; Order #8812 [produces] Product X; Product X [requires] titanium according to its ERP specification).

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From connected data to real business value

When AI truly understands the relationships between orders, materials and machines, you can start unlocking real value:

  • Strategic testing: What impact would a 20% tariff increase have on inventory carrying costs next month?
  • Root-cause analysis: Get instant visibility into the five most recurring causes of downtime, who resolved them and which playbook they used.
  • Margin defense: Track real-time cost variances on production orders that are drifting away from standard costs.

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The value lies not just in having access to more data, but in understanding the relationships behind it.

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A phased approach to AI in manufacturing

As a manufacturer, you don't have to make this transition overnight. You can take a phased approach, as many of our customers do.

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Here's what those phases could look like:

  1. Visibility: Create transparency across all input and process variables.
  2. Thresholds: Set up smart alerts before tolerances drift out of specification.
  3. Recommendations: Let AI agents suggest optimal parameters to shop floor teams.
  4. Autonomous execution: Allow agents to make real-time micro-adjustments within predefined safety guardrails to maximize yield, minimize scrap and optimize cycle times.

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At Squad Apps, we help manufacturers make this transition step by step. We combine human-centered design, expertise in knowledge graphs and ICX, and low-code platforms like Mendix to build solutions that your shop floor operators will actually use.

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Understanding is at the core of AI

Understanding is what unlocks the real power of AI and agents. If you use AI that doesn't truly understand what it's doing, you might just be moving really quickly in the wrong direction.

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That's why we believe in the power of Intelligence Center X.

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Curious about how knowledge graphs can bridge the gaps between your plant's different data systems? Let's connect and share ideas!

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