The United Nations Standard Products and Services Code (UNSPSC) is a system which is used to classify all products and services around the world. It is a taxonomy structure that is widely considered the standard for today’s modern world of eCommerce. This allows products and services to be classified more efficiently and accurately. By implementing the UNSPSC structure, your business is able to improve company wide spend, deliver procurement cost effectiveness, and reduce company costs all together.
The UNSPSC classifies products and services in a hierarchical system, dividing them into four common tiers which pave the way for eCommerce. The groupings of goods and services are concisely organized, making it easy for a client who may be searching through a category to discover a needed product. This makes it much easier to keep record of transactions and tracking product orders, additionally conveniently being able to analyze enterprise expenditures.
According to the UNSPSC, these are the four levels of code:
Segment: the logical aggregation of families for analytical purposes
Family: A commonly recognized group of inter-related commodity categories
Class: A group of commodities sharing a common use or function
Commodity: A group of substitutable products or services
This system allows people looking for a product or service to use the Segment code to narrow their search to the relevant domain in which they will find their desired product or service. Classifying products and services by a common code or a identification system facilitates commerce between buyers and sellers and is becoming a necessity in today’s economy.