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The UNSPSC or United Nations Standard Protocol and Services classification was jointly developed by United Nations Development Program (UNDP) and Dun & Bradstreet Corporation (D & B) in 1998 and is currently managed by GS1 US. It is responsible for changing the codes, administering code change request and issuing regular scheduled update to the code and manage special projects and initiatives
It is a global, open, multi-sector standard for accurate, efficient and flexible classification system to achieve company- wide visibility of spend analysis, enable procurement to deliver on cost-effectiveness demands and allow full exploitation of e-commerce capabilities. It is a hierarchical classification used to classify all products and services. It is a four level hierarchy which is coded as an eight-digit number, wherein the fifth level is optional which adds two more digits.
The four hierarchy levels are:
1. Segment – Logically aggregated families for analytical purpose
2. Family – A group of inter-related commodity categories which is commonly recognized
3. Class – Commodities’ group sharing a common function or use
4. Commodity – Group of suitable services or products
This helps people looking for specific service or product to use higher level terms to narrow their search to the related domain that most likely leads them to the desired item.
For example cats are codded as 1010150 because of the following:
Live Plant and Animal Material and Accessories and Supplies
Usefulness of UNSPSC –
Classifying services and products with common coding scheme facilitates commerce between buyers and sellers. Coding purchases help companies in analyzing their spending. In addition, most coding systems are very expensive to develop and maintain, which requires extensive utilization of resources for a considerable period of time. A single universal coding convention would be a great deal of savings.