Coding Systems
Coding systems are used in procurement to identify stock items, categories and suppliers. Codes are the basis of electronic systems, and coding schemes like UNSPSC enable e-Commerce. There are two broad approaches to coding: significant and non-significant. The UNSPSC is a significant coding scheme in that the numbers in the code denote the item’s character. All like commodities share adjacent codes. Such coding schemes need to be carefully designed to ensure that they have sufficient entries. Non-significant coding schemes simply use the next available number and have no architectural constraints. See also UNSPSC.
Put the term to work
Definitions are the easy part. Talk to us about applying them in your procurement function.