When working with product master data management [MDM] and Product Information Management [PIM], one important thing is product classification. There are two types of product classification standards 1. Internal standard classification 2. External classification standards. Internal standard classification, is using your own internal classification being product grouping and hierarchy management within your organization. External standard includes
1.UNSPSC 2.eclass 3. Etim 4. GPC 5.commodity codes or HS codes.
Here we discuss about the first three external standards :
It stands for the United nations standard products and services code [UNSPSC]. Mostly used for the UN Development Programme [UNDP]. It is a global standard for classification of product and services. This standard is often used in public tenders and at some marketplaces. It has five levels of hierarchy with eight digit coding numbers. UNSPSC competes with a number of other product and commodity coding system like eclass, GPC etc.,
The levels allow users to search products more precisely. The five levels of classification are : [segment, family class, commodity, business function]. Each level contains a two character numerical value and textual description.
UNSPSC classification example :
The UNSPSC can be further extended by adding a 9th & 10th digit after the commodity number. These numbers can indicate business relationships to the supplier such as rental/lease. For instance the classification code is “43-20-15-01-14”
Segment: 43 information technology broadcasting and telecommunication devices and accessories.
Family : 20 components for information technology or broadcasting or telecommunications computer equipment and accessories.
Class : 15 computers accessories
Commodity : 01 computer switch boxes. Docking station.
Business function : 14 retail.
- Each level including the lowest “commodity” level of the UNSPSC hierarchy has a unique number assigned to it. For any given UNSPSC number, you can tell which segment, family and class the particular commodity belongs to.
- Along with UNSPSC, companies can create their own taxonomies.
- Also having a unique number for a given commodity doesn’t create confusion while translation of the commodity’s description in any language.
One of the standard classifications is eclass. It is suitable for different industrial branches, internationally successful and available in multiple languages. Eclass classifies a wide range of industrial products and was developed by leading German companies. It represents a standard for the exchange of information between suppliers and customers and especially represents the procurement markets for buyers. Eclass operates on the principle of a hierarchical system and classifies products and services into four step category [main groups, groups, commodity classes, properties]
Classification example for the computer doc station.
19- information, communication and media technology.
- Computer system.
92- Computer system accessories.
- Docking station.
Similarities between UNSPSC and eclass :
- Both UNSPSC and eclass have four levels of hierarchy.
- Both support multiple language
Compared to UNSPSC, eclass has one more advantage. The standardized classification system under eclass, helps to perform statistical evaluation. It also helps to find, seek and describe products in a targeted manner. For this reason standard sets of properties are attached to the four levels of classification structure. These properties are used to describe the classified products.
It stands for European Technical Information Modes. Etim is used for the classification and technical description of products in the electronic industry. The central association of electro technical craftsmen [UNETO] in Netherlands, developed the basic model of this. The Etim standardization was initiated in Germany and has so far been supported by the association.
Similarly, Etim provides product information from one source – the manufacturer. The main aim of this type of classification is to make sure that there are no ambiguities or misunderstandings when it comes to sharing the technical characteristics of products. So Etim helps manufacturers send product information to their wholesalers in a streamlined way.
Benefits of Etim :
- Reduces the risk of errors in product data.
- Model is multi-lingual and translations are provided automatically for international markets.
- Information can be sent either digitally or in print.
- The consumers get better, more accurate product information.
- The model is a reusable template.
ETIM uses the following way to classify products:
- product groups
- Product classes
- synonyms [alternative keywords]
For example : EG000009
Here G stands for group. A string of six numbers that identifies the type.
The following are the industries that are adopting Etim:
- HVAC and sanitary
- Building construction
- Ship building.
Likewise, we see that Etim is a free and open standard. However, Etim international allows companies to become influencing numbers of the association that allows them to vote on changes and improvements to the Etim standard.
Need for classification :
Even if you have already sorted your products into your own classification, and use this classification in your web shop, as a search tree. Customers and partners may ask you to additionally sort the products according to standard classification such as Etim, eclass etc.; above all the wholesalers want the industry to sort their products into standardized classes in order to offer their customers products from different manufacturers via uniform classifications.
Thus the need for classification is to create a uniform and logical system, to manage product data. And also to facilitate problem free communication among different subjects. For instance, you and your partner use different words to say exactly the same thing. Thus the classification of products and services can prevent misunderstanding and unite classification.
Therefore, Data collected for product classification, is always available with the clients. And so, the customer can find exactly those products that meet his requirements the most on the market.