Classifying products and services with a common coding scheme facilitates commerce between buyers and sellers and is becoming mandatory in the new era of electronic commerce. Large companies are beginning to code purchases in order to analyze their spending.

By classifying their products & services, businesses can assist their customers with:

Finding and Purchasing - a product and service coding convention brings many benefits to the purchasing function of a company.

Product discovery - a common naming convention allows computer systems to automatically list similar products under a single category. When a person is searching for the category, he or she finds precisely the things being discovered and nothing else.

SourceCAN uses UNSPSC to classify all of the products and services that appear on our website. The following FAQ’s will provide you with an overview of UNSPSC:

The United Nations Standard Products and Services Code is a hierarchical convention that is used to classify all products and services. It is the most efficient, accurate and flexible classification system available today, enabling procurement to deliver on cost-effectiveness demands and allowing full exploitation of electronic commerce capabilities. The UNSPSC was jointly developed by the United Nations Development Programme (UNDP) and Dun & Bradstreet Corporation (D & B) in 1998.

The UNSPSC is a hierarchical classification with five levels. These levels allow analysis by drilling down or rolling up to analyze expenditures. Each level in the hierarchy has its own unique number. All UNSPSC entities are further identified with an 8-digit structured numeric code, which both indicates its location in the taxonomy and uniquely classifies it. An additional 2-digit suffix indicates the business function identifier.

A structural view of the code set would look as follows:

Hierarchy Category Number and Name

Segment	43	Information Technology Broadcasting and Telecommunications Communications Devices and Accessories
Family	20	Components for information technology or broadcasting or telecommunications Computer Equipment and Accessories
Class	15	Computers Computer accessories
Commodity	01	Computer switch boxes Docking stations
Business Function	14	Retail

The easiest way to find the codes that you are searching for is to do a search of the code set.

Select “Add a Code” within the “Create a Match Profile” section which will open a new window. We suggest you find your codes using the Search box provided at the bottom of the window. It can be a partial description; use “%” as a wild card. For example, entering “%Clamp%” will return all codes containing the word “clamp”. From there you can determine specific clamps that may pertain to your business.

Sometimes a commodity may not be found because:

• Different phrases are used in different regions. For example, the term “cooling exchanger” is the same commodity as a “heat exchanger”; “allen wrenches” are the same commodity as a “hex key”
• The item may be described by what it is rather than how it is used.

Today's customers - internal and external - demand faster fulfillment at a lower cost; increasingly business is eBusiness. The need to approach procurement more strategically has never been greater. All of these combine to make fast, simple, accurate classification of goods and services an imperative in the marketplace. So, if there was a single coding convention that all companies could draw from so that all spoke the same language in order to speed-up and rationalize processes you would want to have it, right? Right! There is one! It's called the UNSPSC.

By embedding UNSPSC classification standards into your management systems - purchase orders, invoices, electronic documents, product catalogues, websites - all parties throughout the extended supply chain benefit.

The UNSPSC is particularly helpful for procurement as it allows businesses to keep an eye on how much is spent buying what. They can cut in half or less the time it takes to find the products needed by searching by commodity code through brokers, on line exchanges, business partners, etc. across the globe.

The Harmonized Code (commonly referred to as the HS – Harmonized System - classification) is designed primarily for, and required to be used in, customs documents for the purpose of applying trade tariffs.
The main differences between the UNSPSC and the HS classification are twofold. First, the HS does not cover services. Secondly, the process for the maintenance of the HS is lengthier as it is maintained by the World Customs Organization (WCO) and requires international governmental consultation and approval.
The UNSPSC was designed for procurement and purchasing systems.

The Standard Industrial Classification (SIC) and the North American Industry Classification System (NAICS) coding systems that describe the operations of a business, while the UNSPSC provides a very specific product-centric viewpoint.

The UNSPSC is constantly evolving and adding new codes. We would encourage you to visit www.unspsc.org to learn more about requesting new codes.

Alternately, if you require personalized help navigating the code system please e-mail info@rfpsource.ca.