How to classify your products and services

using the UNSPSC System

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What is the United Nations Standard Products and Services Code (UNSPSC)?

UNSPSC is a classification of products and services developed by the United Nations Development Programme (UNDP). It is an open, global, multi-sector standard and is internationally used by industry and government in procurement to identify the commodity acquired, and to support financial analysis of goods and services (i.e. how much is spent, on which products, and from which suppliers).

UNSPSC is being progressively implemented by governments around the world. The system consists of over 157,000 unique codes that can be used to track a product as it changes and moves through all stages and all branches of its product lifecycle - from supply chain sources through to end-consumers.

UNSPSC is the first truly hierarchical, global classification standard. It allows commodities and products to be properly and uniquely classified, so that companies can track purchasing patterns more efficiently. Its hierarchical structure enables upward roll-up, downward drill-down and mapping to higher, contractible groups, which is integral for end-to-end supply chain transparency and enables tactical spend analysis which leads to better, more informed strategic purchasing decision making.

Two organizations are responsible for maintaining a single version of the UNSPSC code set: the United Nations Development Programme (UNDP), and the Electronic Commerce Code Management Association (ECCMA).

For more information visit the UNSPSC website.

Why did SlaveCheck choose UNSPSC and how are the codes used?

UNSPSC is a universally recognized and centrally managed code-set which allows global trading partners to communicate. It is crowd-sourced and relies on continuous input and feedback from members (governments as well as in the private sector) to keep the codes up to date and current. It is not managed by any government and contributes to open governance in the realm of procurement.

SlaveCheck uses UNSPSC in its Slavery Risk Profile (SRP) so that Buyers and Suppliers can classify their products and services using a standardized global classification system. This enables the tracking of products - and the services used to move and transform them - from source to end-consumer, which globalization enables via complex mazes of supply chains.

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Example: Cotton. Look at the different products and services in the cotton lifecycle: cotton seeds or seedlings; agricultural processes for cotton growing operations; fertilizer; insecticide; fuel; water; harvesting; transportation; storage; washing; processing into different fibres and formats; shipping; manufacture into hundreds of different products used across most industries; transport & logistics; distribution & sales.

 

Multiply this by all the different ways in which cotton is used around the world and you can understand the challenge of 'investigating supply chains for modern slavery'.

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Picking the best Product and Service Categories for your company

 

Consider the following when picking the best fit for your company:

  • Be general. Search as non-specifically as possible. For example, search "stands" instead of "Wrought iron plant stands with dolphin designs" to help you efficiently pick a commodity.

  • Use layman's terms. Your industry-specific knowledge and vocabulary helps you describe an individual product or service but can hinder how searchable you are by potential buyers or suppliers. Use terms that someone without specialized knowledge will be able to identify

The Product and Service Categories classification system includes four hierarchical levels, from least specific to most specific:

  1. Segment

  2. Family

  3. Class

  4. Commodity

 

Segments are the highest level, so if you supply all the products or services in a segment, select only the segment. Your customer will still be able to find you if they search for any of the sub-categories under that segment.

 

If you cannot find the exact code, select the code one level higher. For example, if a product is not in the list, select the class to which the product most likely belongs.

Note that you can add, remove, change or refine your UNSPSC product and services codes selections in SlaveCheck at any time.

 

What if I can't find a UNSPSC code that applies to my product or service?

 

If there is no UNSPSC code for one of your products or services, you can contact the UNSPSC organization to request one. The managing organization fairly promptly either creates a new code or recommends an existing code.

 

A UNSPSC Coding Example

The UNSPSC for wooden pencils is 44121706, which is comprised of the following hierarchy levels categories:

Segment 44 Office equipment, accessories, and supplies

       Family 12 Office supplies

            Class 17 Writing instruments

      Commodity 06 Wooden pencils

 

If you supply all the commodities under a given segment, designate the segment alone. For example, a large office supplies company could cover most of their products and services under code 44000000. This is called wildcarding, which provides procurement and tracking applications with enough information to categorize the item correctly.

 

However, if you supply only select commodities within a given segment, family, or class, designate them as specifically as possible.