> The classification of products or services needs deep domain/industry knowledge and contextual awareness of the business.

When we talk about Savings Management in **Supply Chain**, you may be thinking about some complex data analysis tools, methods, visualization or even insights. No. In this article, we are talking about something even more fundamental, the **classification of products or services** which sets the foundation for supply chain visibility.

Even though, the lack of it or its inconsistency can impact many strategic decisions of the business; the classification approach and methodology of products and services is often considered least priority and/or left to an analyst. This video (Source – YouTube) – which is a bit of a humorous take on this problem, shows how it can have a far-reaching impact even up to your customers (internal or external).

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[https://simfoni.com/wp-content/uploads/2017/12/Global-standards-for-product-classification.mp4](/content/wp-content/uploads/2017/12/Global-standards-for-product-classification.mp4)

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[Download File: https://simfoni.com/wp-content/uploads/2017/12/Global-standards-for-product-classification.mp4?_=1](/content/wp-content/uploads/2017/12/Global-standards-for-product-classification.mp4?_=1/index.html)

Sounds like a data job, but the classification of products or services needs deep domain/industry knowledge and contextual awareness of the business. Most of the supply chain organizations have no or limited classification structure, often leaning on the finance-based general ledger accounting codes for decision making. The problem is even more aggravated in organizations with business units working in silos, **lack of supply chain visibility and Savings Management** limits [procurement](/content/procurement/ "Procurement"/index.html) and supply chain leaders’ ability to take a holistic view in framing strategies and taking decisions.

#### Learn More – [**Impact Assessment**](/content/impact-assessment-101/index.html)

On the other hand, a well thought through and structured products and services classification can have a transformative impact on procurement and supply chain. From strategic areas to the operational ones, the products or services classification drives [supply chain visibility](https://scholar.google.com/scholar?q=Supply+Chain+visibility). Some classic examples are the implementation of [category management](/content/category-management/what-is-category-management-how-and-why-is-it-important/ "Category Management"/index.html), ability to automate recurring purchases through catalogs, item master creation, and inventory control, price variance avoidance through item standardization, identification of [tail spend](/content/tail-spend-management-guide/ "Tail Spend"/index.html) products and services and last but not the least, ability to maintain clean, reusable data, all the time.

**Read More:-  What is [Procurement](/content/procurement/index.html) and How To Optimize Processes, Performance, and Technology?**

That said, with complex organizational structures and a large amount of data generated day in day out, we understand the challenges organizations face in achieving an organization-wide classification structure and coverage. With right tools and technology and deep knowledge of procurement & supply chain; Simfoni has built a robust, technology-driven approach that helps our clients solve this complex problem and set the strong foundation of clean and classified data for ultimate **supply chain visibility.**

[Contact us](/content/contact/index.html) today to know more about how Simfoni’s technology and processes can help your organization achieve world-class supply chain visibility.