April 27, 2016

IDEA Dictionary: What The UNSPSC Is and Why It’s Important

What is the UNSPSC?

The United Nations Standard Products and Services Code (UNSPSC®) is an eight-digit numeric identifier that allows for the categorization of products in multiple different industries.

Each product’s UNSPSC is made up of four pairs of digits representing four different category levels, moving from the most general to the most specific.


 

What does the UNSPSC do?

In essence, the UNSPSC is a taxonomy – a classification system – that allows for like products to be grouped together. Taxonomy-based product organization facilitates transactions between trading partners, simplifies spend analysis and reporting, and improves accuracy and efficiency throughout the supply chain.

How the wrong UNSPSC can break your eCommerce sales

The Industry Data Warehouse (IDW) requires that the UNSPSC be provided for each individual product loaded into the database, and IDEA’s team of Data Quality Specialists places a strong emphasis on the importance of each product having the correct UNSPSC. Why? Let’s use the following grocery store analogy:

Imagine you have a product called “Pumpkin Delight”. That name and the product’s barcode aren’t enough for one to determine if it’s a baked good, a coffee creamer flavor, a soup – the list goes on. The manufacturer uses the UNSPSC system to identify for the distributor where this particular item should be located in their business system, on their eCommerce website, and potentially, in their store. If “Pumpkin Delight” is a creamer flavor, but your incorrectly assigned UNSPSC marks it as a baked good, then the buyer searching in the coffee creamer aisle – or browsing through your website’s creamer category – will never see your product as a potential item to purchase.

Now, if you apply that same logic back to the electrical industry, it becomes clear how a wrong UNSPSC misplaces the product within the classification system, resulting in inefficient product searches, poor brand visibility, and lost sales for both the manufacturer and their distributors.
 

If you have any questions regarding the UNSPSC, please contact your Data Quality Specialist.

 

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