What is traceability in business? (With types and benefits)

By Indeed Editorial Team

Published 16 June 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Keeping track of specifications, parts, versions or requests for data is vital for a wide range of businesses. Traceability provides an effective way to monitor a product or service from beginning to end, allowing businesses and users to have visibility over each stage of the process. As a key automation for many sectors, tracing is vital for protecting consumers and providing quality customer service. In this article, we define traceability, or tracking and tracing, explain its use and describe why it's important.

What is traceability?

Traceability is the capacity to track a particular part, product or component throughout its development process to its final application or destination. For example, in product development, you may trace the testing, manufacture and shipping of individual parts for tracing back to their source. Examples of tracking include putting serial numbers, barcodes or other codes onto packaging or objects for easy tracking back to their origins.

Tracking and tracing are systemic processes that support businesses to meet internal quality measures and industry-wide compliances. For example, food items trace back to their source of growing, processing and manufacture to maintain specific safety standards. Many businesses use automation to trace particular products within their industry and sustain legacy information about parts or products no longer manufactured.

Related: 5 popular manufacturing and production strategies

Types of tracing

The processes that businesses use to trace and keep track of different products and materials vary based on their purpose. For example, internal tracing helps businesses track products as they move through a manufacturing process within the company. The typical models of tracing encountered include:

Chain tracing

Chain tracing covers every stage of bringing a product from raw materials to final delivery. Instead of applying to one business, this practice may cover multiple companies within a chain to create that outcome. This practice allows organisations and individuals to trace forward to product delivery and trace back to where a product originated. For example, a box of cereal tracks through a chain back to the original farm, the grain processing plant and the cereal manufacturing facility.

Internal tracing

Internal tracing helps businesses to track a single process within their own facility. These tracking processes may provide more in-depth insight into the methods used in-house to manufacture products, the resources available and the amount of stock produced. Internal tracking allows businesses to spot and fix errors within their system and meet compliance requirements for quality and production standards.

Where is tracing used?

Tracing processes support many sectors and industries. For example, food production and medical manufacturing require tracking processes throughout the entire chain to allow professionals and consumers to trace components back to their source. Some of the key industries that use tracing systems include:

Food production

Chain tracing is typical throughout the food production industry. Food items found in-store at supermarkets or other shops typically include barcodes and information for tracing back to the food manufacturer and locations where the raw food or produce originated. As contamination and sickness are crucial concerns in food production, this tracking and tracing process makes it easier to instigate recalls and provide alerts about dangerous products.

Health care

Tracking and tracing methods support the production of medication, medical equipment and surgical products to provide a way to connect stock to manufacturers. Medical manufacturing companies have requirements to meet strict compliance requirements, including tracking materials within their facilities and as a part of a chain. For example, a hip replacement includes a serial number to track the item back to the manufacturer to source its origins quickly if the medical product is faulty or breaks.


Manufacturing plants use tracing processes to keep track of all the products in their production line, providing insight into each step in the workflow, from incoming materials to outgoing products. Internal tracking systems in manufacturing provide management and other professionals with insight to optimise productivity and identify issues. This in-depth approach allows for swiftly identifying any problems in production, often using automation to provide real-time reporting.

Engineering and repairs

Engineers and repair specialists use tracing to keep track of stock used for specific jobs and keep a record of where part sources for repeat purchase or to report problems. For example, an engineer that builds a custom manufacturing system for a business tracks the individual parts used to restock them for repair and replacement years later. This due diligence ensures that repairs and replacements are accessible throughout the product's lifetime.

Related: What is product engineering (and how you can get into it)

Why is tracing important?

Tracing is important for businesses to maintain operations and improve upon existing practices. For example, a business that uses tracking and tracing can mitigate risk by ensuring all materials they use meet a high standard. Some of the reasons tracing is important include:

Quality control

Quality control is vital to ensuring the end product of manufacturing meets the required standards. Tracking can allow for a swift response to a quality problem, reducing the number of faulty or unsuitable products and helping to improve quality overall. The ability to trace products through a chain also makes each stage in the process visibly responsible for the standard of the product, improving quality control overall.

Risk mitigation

Mitigating risks is a vital component of tracing, providing businesses with resources to reduce risk to themselves and the public. For example, if a manufacturer of a part notices a fault, access to forward tracing can allow them to notify other manufacturers that use their parts. This practice helps mitigate risk and ensures all parts continue to be of a high standard to build trust.

Faster shipping or release

Automated tracing and tracking can help to make the process of documentation and shipping faster and easier. For example, tracking fruit from picking to delivery can provide a clear overview of each stage in the process, streamlining and reducing the time between each step. The ability to trace where products are can also offer production facilities insight into any delays or problems with potential shipments.

Related: What is a production schedule? (With stages and benefits)

Inventory management

Companies can utilise tracing alongside other measures to track and report the stock and products flowing through the business. Internal tracking may include detailed information like serial numbers and individual item details, which can integrate with automated stock systems to measure stock levels. This inventory management helps reduce waste and ensures businesses maintain a steady stock level for required parts and materials.

Compliance requirements

Industries like food manufacturing, medical production and automotive development have specific compliance requirements and regulatory standards to meet. A tracking and tracing system helps companies demonstrate that they meet these specifications within their business. Automated systems can help save time and money without the extra step of providing tracking information manually to prove compliance. This can be helpful in companies with a high turnover of stock and products.

Recall management

If a recall of a product or item is necessary because of risk or contamination, the ability to trace that product back to the manufacturers and suppliers is valuable. By having a transparent chain, recall management is faster and easier, reducing the possibility of risk and harm to the public. For example, if a manufacturer finds a food product that tests positive for salmonella, they can trace it back to the supplier to discover the source and prompt fast action to protect the public.

What are the benefits of tracing?

Tracing products and materials through a dedicated process is valuable for many businesses within a supply, manufacturing and delivery chain. For example, tracing measures can ensure every business follows mandatory compliance within their sector, including highly regulated industries like food and medical products. Some benefits of effective tracing systems include:

Faster processing times

Tracing within a business can help to improve productivity and processing internally. Chain tracing can also help with faster processing times by providing clear insight into the steps in the process, enabling businesses to work effectively. These improved processing times allow businesses to keep on track with compliance and legal requirements within their field.

Improved visibility of supply chains

Visibility of supply chains is beneficial to both businesses and consumers. For example, consumers can understand where their product comes from to decide whether they would like to purchase it. This clarity can also be helpful if there's an error or manufacturing problem, allowing businesses to trace a part back to its source and resolve the issue quickly.

Reduced faults and errors

By providing transparency to the manufacturing process, tracing can help to reduce faults and errors from reaching the end consumer. For example, if a part manufacturer finds a defect in a sold part, they can report it directly to the end manufacturer immediately for repair or replacement within the tracked chain. By reducing faults, businesses can provide a better service to their customers while also reducing returns and recalls.

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