The United Nations Standard Products and Services Code (UNSPSC) is a global standard for classifying products and services. By providing a structured taxonomy, UNSPSC enables organisations to categorise their goods and services consistently, facilitating procurement, inventory management, spend analysis, and supplier relations.
Whether it’s used by businesses in retail, manufacturing, government, or healthcare, UNSPSC classification helps streamline operations and improve data accuracy across the supply chain.
What Is UNSPSC Classification?
At its core, UNSPSC is a hierarchical classification system with multiple levels, from broader categories down to specific product or service details.
The coding structure uses five levels: Segment, Family, Class, Commodity, and Business Function.
Each product or service is assigned a unique eight-digit code, which helps businesses and industries around the world standardise the way they classify and manage their offerings.
This standardised classification system simplifies communication between businesses and vendors by providing a common language for categorising products and services. As a result, businesses can reduce errors, ensure consistency in data entry, and improve decision-making processes.
Why Is UNSPSC Important?
The importance of UNSPSC classification cannot be overstated, especially in industries where accurate data management is crucial. Here’s why it’s so valuable:
1. Standardisation Across Platforms
UNSPSC provides a unified system that helps organisations maintain consistent product data across multiple systems, such as ERP (Enterprise Resource Planning), MDM (Master Data Management), and EAM (Enterprise Asset Management). This consistency is essential for ensuring data integrity, especially in large organisations that manage thousands of products.
2. Enhanced Spend Analysis
With UNSPSC codes, organisations can easily categorise and analyse their spending across various departments and suppliers. This classification enables businesses to identify savings opportunities, negotiate better supplier contracts, and track spending trends.
3. Improved Procurement Efficiency
By categorising products and services with UNSPSC, organisations can streamline their procurement process, making it easier to search for and select the correct items. This leads to more accurate orders, fewer discrepancies, and faster procurement cycles.
4. Better Supplier Management
UNSPSC classification allows businesses to effectively categorise and manage suppliers based on the types of goods and services they provide. This enables better supplier performance monitoring, segmentation, and contract negotiations, improving overall supplier relationships.
Benefits of UNSPSC Classification
Here is how UNSPSC classification can benefit organisations:
- Inventory Management: By using UNSPSC codes, businesses can organise and manage their inventory more effectively. It helps categorise similar items together, making it easier to track stock levels and reorder products when necessary.
- Compliance and Audits: UNSPSC codes make it easier for organisations to comply with industry standards and conduct internal audits. By having a standardised product catalogue, businesses can ensure that their data is accurate and compliant with industry regulations.
- Cross-Border Trade: For businesses operating internationally, UNSPSC codes provide a common framework for classifying goods and services across borders. This standardisation reduces misunderstandings and errors during global transactions.
The Latest UNSPSC Version: 26.0801
UNSPSC is regularly updated to reflect new products, services, and changes in industry standards. The latest version, 26.0801, introduces 511 changes, including 449 new items and 56 edits to existing codes. This update brings the total number of UNSPSC items to 158,449, covering a wide range of product categories, services, and industries.
This latest version ensures that businesses can classify their products and services using the most current and accurate information available. Whether you’re in procurement, supply chain management, or another sector, adopting the latest UNSPSC version can significantly improve the efficiency and accuracy of your operations.
How AICA Helps Automate UNSPSC Classification
Manually classifying products and services using UNSPSC codes is a time-consuming and error-prone process, especially for organisations with large product catalogues. AICA simplifies this with our advanced machine learning algorithms, which help speed up the UNSPSC classification process with exceptional precision.
Whether your data is stored in EAM, ERP, or MDM systems, our platform can seamlessly integrate with your existing setup via API, allowing you to easily classify existing data and effortlessly manage new data classifications within your business systems.
Conclusion
The UNSPSC classification system is a vital tool for organisations looking to standardise, categorise, and manage their products and services. With the latest version, 26.0801, and its numerous updates, businesses can ensure their data remains accurate and up-to-date across all systems.
Our platform not only saves time but also ensures that your data is clean, reliable, and ready for analysis or operational use. Let AICA help you take the guesswork out of UNSPSC classification and bring precision to your product data management.
Get in touch with AICA today to learn how our platform can optimise your UNSPSC classification and enhance your data accuracy.
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