Using UNSPSC codes in the MRO Inventory System
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This document discusses the UNSPSC commodity coding system and its use for asset management. The UNSPSC system provides a hierarchical classification structure with 4 levels (or 5 levels if modified) to codify items. However, the document finds inconsistent use of UNSPSC codes in one company's data. Proper use of codes could support spend analysis and rationalization of suppliers if applied to a company's CMMS. Training is recommended to select codes consistently and understand naming conventions.
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Using UNSPSC codes in the MRO Inventory System
- 1. 1 Using the UNSPSC Coding System MRO Article 22
- 2. 2 Purpose To highlight different providers of Commodity Codes To highlight some issues with use of UNSPSC commodity codes To highlight a cleansing exercise carried out by a consultant company To aim to ascertain the level of usage in asset management
- 3. 3 Commodity Codes Example This FESTO item listed on Amazon shows the EAN and UNSPSC codification number
- 4. 4 Classification Providers There are a number of material classification organisations, such as: UNSPSC ecl@ss Nato Codification System EAN (European Article Number) This document highlights the UNSPSC codification system
- 5. 5 What is the UNSPSC Classification System
- 6. 6 UNSPSC Coding System The standard UNSPSC system is made up of 4 hierarchical levels (but actually with a slight modification 5 levels can be displayed) The standard 4 levels are: AA AABB AABBCC Class (6 characters) Family (4 characters) Segment (2 characters) AABBCCDD Commodity (8 characters)
- 7. 7 UNSPSC Coding System - Bearings UNSPSC coding system for a Ball Bearing (Level 4) is shown below: 31 3110 311700 Bearings, Bushings, Wheels and Gears Castings and Casting Assemblies Manufacturing Components and Supplies 31171504 Ball Bearing Class L3 Material Type L4
- 8. 8 Standard Structure 4 levels Level 4 show the type of bearing, although code 31171500 represents all types of bearings, i.e. the Noun If you make the Bearing code, a Group, then you can show the list as 5 levels as shown from a another report in our MS Access based tool Class L3 Item L4
- 9. 9 Modified Structure Here is modified structure, where we show the bearing group and the bearing types, New Group L4 Standard Material Type Code, now L5 Class L3
- 10. 10 Audit Inconsistent Use of UNSPSC Codes This is an example from the data cleansing by consultant company for a major bottling company For the same item type; 4 different codes have been assigned and a mix of levels L4 (Noun) and levels L5 (Noun & Qualifiers). We assume, when they didnt know the qualifier, they assigned the higher level code, the Noun L4 2 1 3 4 L5 Bush TypeL4 Bushing
- 11. 11 Another Example UNSPSC Codes Item 50295111 is shown as a Bush and coded as a Sleeve Bearing (which is also a BUSH) Incorrect The problem with some materials, is that different manufacturers will use different names in our training courses, we strongly recommend the development of TYPE GUIDES to ensure consistency of naming Incorrect
- 12. 12 Bushing Type Guide This is one of our TYPE GUIDES, that are prepared to ensure consistency
- 13. 13 UNSPSC Codes In some case the UNSPSC does not go to the level of the Qualifier, consider the noun CIRCLIP The 8 digit code is 31163226 Our type guide for circlips indicates the following types
- 14. 14 Assigning UNSPSC Codes The UNSPSC Codes provide a description in the format of Qualifier + Noun, e.g. Ball Bearing If we add an extra field for the Noun & Qualifier, as shown, then it becomes very easy to map this code to your inventory list very quickly Modified UNSPSC Table to include Noun + Qualifier Mapped UNSPSC code to inventory download,
- 15. 15 Application Many companies involved in asset management have populated their CMMS with these type of codes We would interested to hear from anyone IF they use these commodity codes to support replenishment, spend analysis and for rationalisation of suppliers? In addition, which level is the most useful e.g. at the Bearing level or the level of the Type of Bearing
- 16. 16 Summary The UNSPSC codes or similar can be easily included into your MRO master data To select the right code consistently you need good cataloguing data and to understand the naming conventions We cover this topic in both of our unique training workshops MRO Spare Parts Optimisation and Inventory Reduction (for inventory, maintenance & purchasing personnel MRO Spare Parts Master Data Auditing and Cleansing For consultancy or training contact David Thompson, Ramsoft (UK) on dave@ramsoftuk.com or www.ramsoftuk.com David Thompson http://uk.linkedin.com/in/davidthompsonreliability Manager Linkedin Group: MRO Spare Parts Optimisation & Inventory Reduction