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February 13, 2023
The United Nations Standard Products and Services Code® or UNSPSC® is used as a global classification code for products and services. Managed by GS1 US® for the UN Development Programme (UNDP), it comes in handy for businesses when analyzing expenditure data at the global level. Insights can be used to identify market opportunities in the global market based on over 22,000 trade-related keywords. Here we explain what the code is, what it is used for and a little bit of history explaining how it came about.
The United Nations staff uses UNSPSC classification. The code acts as an accurate identity when measuring suppliers for products and services in global marketplaces. Unlike a barcode, it acts as a classification system for complex product information. It describes specific products and/or services offered by global suppliers. In essence, the code uses a five-level hierarchical classification code set for analysis of groups within categories. Consequently, users are enabled to see either broader overviews of technical product data or a deeper dive into data depending on their needs.
The code systemizes trade classifications and how trades are described in the market. Once the trades are classified, manufacturers can identify viable business opportunities in the global market. However, it is also a critical tool for the UN. It lets them identify manufacturers/suppliers of various global products easily.
Additionally, companies can pay for a UNSPSC Subscription. In turn, they receive email alerts to tell them when opportunities related to specific products or services they are interested in arise.
The UNSPSC is a code used in the United Nations Global Marketplace (UNGM). As the official procurement portal of the United Nations System, the UNGM connects companies interested in working with the UN, using codes to search for product information. So, UN Staff can identify relevant product suppliers once registered in the UNGM.
The system is based on the category instead of specific providers’ catalogs. In turn, the code is very different from bar codes. Conversely, barcodes are brand and product specific. In this case, the codes use either a four or five-tier number depending on the detail of the business function. Each level uses two digits, with a total of eight to 10 digits depending on the hierarchy. The structure includes:
The UNSPSC provides a far clearer overview of expenditures, making it an important tool for spend analysis procedure. It creates a consistent classification system, offering many benefits for companies needing integrated reports when considering commodity spending. Users have an easier way to navigate and identify commodity information, streamlining the submission process for catalogs.
The UNSPSC enables users to:
The Canadian government replaced their Goods and Services Identification Numbers (GSIN) codes with the UNSPSC in 2021. Now, it is the identification used to search contract history and review Standing Offers and Supply Arrangements. The Procurement Data Dictionary provides companies with a description of each data field found in UNSPSC files and datasets they can use on Buyandsell.gc.ca. Basically, the XML files provided reflect changes and valuable data elements.
Companies can create a supplier account on the UNGM. In turn, they can conduct a search to understand the product codes they need to match to their specific trade. Afterwards, a database query is initiated using keywords. The results provide choices for the code selection, which is then saved.
The UNSPSC was created by the United Nations Development Programme (UNDP) and Dun & Bradstreet Corporation in 1998. Today, it has over 22,000 separate words. Peter R. Benson oversaw the development of the first version. In fact, he designed the code management procedure, which was a modification of the Delphi statistical forecasting method. In 1999, the ECCMA was formed to manage and promote the UNSPSC.
They continued to do so until March 2003, when the release of version 6.0315 was launched. Consequently, the UNDP appointed GS1 US as code manager in May 2003. However, ECCMA still develops the ECCMA Open Technical Dictionary (eOTD) and the international standards ISO 22745 and ISO 8000.
The UNSPSC provides the ideal structure to classify products and services, facilitating accurate information sharing. Also, it enables sellers to quickly identify their merchandise and access up-to-date procurement data. As a result, they can make smarter, more strategic decisions to drive their success.
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