Accurate product classification is crucial for companies utilizing GS1 standards. Proper classification within the Global Product Classification (GPC) framework enhances data exchange, optimizes logistics, and maintains a well-structured product catalog. However, manually classifying products according to GS1 standards is often labor-intensive, prone to errors, and hard to scale. Particularly for businesses managing extensive or diverse product assortments.
AI provides an intelligent solution to these challenges. By leveraging Large Language Models (LLMs), businesses can streamline and accelerate the classification process with greater accuracy. An AI agent automates product categorization, ensuring efficiency and precision, transforming the way GS1-classification is managed.
The Role of GS1 in Product Classification
GS1 (Global Standards One) plays a vital role in global commerce by standardizing product information and streamlining logistics. Through systems like the Global Product Classification (GPC), it ensures a uniform categorization of products, facilitating efficient data exchange and maintaining a structured classification system.
Despite its importance, the GS1-classification process comes with significant challenges. It demands considerable time, is prone to errors, and becomes increasingly difficult to scale. Especially for businesses managing extensive product catalogs or complex organizational structures. However, innovative AI-driven solutions can effectively overcome these obstacles.
Challenges of GS1-Classification
One of the main challenges of GS1-classification is the time-consuming and error-prone nature of the manual process. Each product must be classified individually according to the GS1 taxonomy, which not only requires significant effort but also increases the risk of inconsistencies. Different employees may classify the same product differently, leading to inaccurate classification of data. For companies with large or complex product catalogs, these inconsistencies can create operational inefficiencies and complicate data management.
Beyond the risk of errors, manual classification also comes with high costs. The GS1 taxonomy is extensive and detailed, consisting of segments, families, classes, and bricks, making it difficult for untrained employees to accurately classify products. As a result, companies must invest time and resources into training staff, further adding to operational expenses. Misclassifications can also have downstream effects, disrupting workflows and leading to more inefficiencies across the supply chain.
Another significant drawback of manual classification is its lack of scalability. As companies expand and introduce new products, keeping up with classification requirements becomes increasingly difficult. This limits the ability of businesses to optimize their processes and scale efficiently while maintaining data accuracy.
Embrace Automatization
To address these challenges, automation through AI-driven solutions offers a powerful alternative. A classification system based on a large language model (LLM) can significantly reduce the time and effort required for GS1–classification while improving consistency and accuracy. By leveraging AI, companies can ensure faster product classification, minimize errors, and create a scalable system that supports business growth. Squadra provides innovative AI solutions that help businesses overcome the limitations of manual GS1–classification, making the process more efficient, reliable, and future-proof.
How AI Improves GS1-Classification
To address the challenges of GS1-classification, Squadra has developed an innovative solution: an AI agent powered by a Large Language Model (LLM). This smart technology allows businesses to save significant time and resources.
Our AI agent can convert your existing classification structure into the GS1 structure using advanced prompting and elimination techniques. This enables products to be classified correctly according to GS1 taxonomy without requiring a predefined taxonomy. This makes the solution not only powerful and fast but also flexible and easily adaptable to your company’s classification structure.
Instead of directly returning the raw output from the LLM, the AI agent utilizes a method called ‘prompt chaining.’ This approach breaks down the problem into smaller, more manageable steps. The AI uses intermediate outputs as inputs for further processing, ensuring accurate and reliable classifications without human intervention.
Why Choose LLMs?
Why opt for an LLM-based solution and not for a traditional Machine Learning model? The answer lies in the advantages that LLMs offer: Large Language Models provide greater flexibility, higher accuracy, and eliminate the need for extensive training datasets, making them more efficient and cost-effective than other Machine Learning models.
Some more benefits of using an LLM-based approach:
- No training data needed: Unlike traditional Machine Learning models, an LLM-based AI agent does not require extensive training data, saving time and money.
- Scalable to your taxonomy: The AI can easily be tailored to fit your company’s product structure, providing maximum flexibility and scalability.
- Accurate results: Through well-designed prompts, classification accuracy is significantly improved.
- Precise output: The AI agent achieves an average accuracy rate of 77%, largely due to advanced prompt engineering. Even when classifications are not 100% correct, they are often very close (e.g., “chair” versus “garden chair”).
- Perfect for complex taxonomies: The more extensive and detailed the taxonomy, the more precision is required. Nevertheless, the AI agent can be adapted to any classification structure with minimal effort.
- Cost-effective: The average classification cost per product using the GS1 taxonomy is just 3.6 cents. Smaller, simpler taxonomies are even cheaper.
Eliminate Manual GS1-Classification
Is your company still classifying products manually? We have developed the AI solution for you. With our advanced AI agent, you can turn a long, labor-intensive GS1 classification process into a simple and efficient task. This not only saves time and resources but also increases accuracy and reliability, all without manual effort.
What are you waiting for? Make your classification process more efficient and see how we can help your business work smarter and faster. Contact us today for a free consultation and experience the huge number of benefits that our AI solution has to offer firsthand!
