Track and Traceability

Chain Traceability and Internal Traceability are Important in Modern Supply Chains

14 Min
May 25, 2024
Tracebility Use Case

What to Expect?

Track and traceability is crucial in modern supply chains because it improves transparency, efficiency, and accountability. The integration of technologies such as blockchain, IoT, RFID, big data, and AI, along with adherence to established protocols and standards, forms the backbone of effective traceability systems. These technologies are already being used in the real world: An industrial laundry in France uses a UHF RFID track and trace solution to enable the traceability of laundry items. A wool organization in Austrialia uses a customized RFID solution for the track & trace of wool bales.

1. Status Quo

What is Track and Traceability?

Track and traceability is no longer a nice-to-have, but a necessity in complex modern supply chains. In production, traceability is crucial to ensure that all processes and products are transparent and traceable. The questions “who” and “when”, in relation to the production, storage, transportation, receipt, consumption, and disposal are made transparent. This is made possible through innovative technologies like the Internet of Things (IoT), blockchain, big data solutions, and AI. IoT devices and sensors can monitor the location, condition, and status of products throughout their lifecycle, providing real-time data for traceability. Radio Frequency Identification (RFID) and machine-readable codes like QR codes and barcodes are used for tagging and tracking products and materials.

Chain Traceability VS Internal Traceability

There are two types of traceability: Chain traceability and internal traceability.

Chain traceability, also known as external traceability, refers to the ability to track a product and its components through the various stages of the supply chain, from raw material extraction to the consumer. This involves documenting and verifying the journey of a product as it moves between different supply chain stakeholders such as suppliers, manufacturers, distributors, and retailers. Chain traceability ensures that every stakeholder in the supply chain can access relevant information about the product’s history, including its origin, production processes, and distribution channels. This is crucial for quality control, regulatory compliance, and ensuring consumer trust. Chain traceability helps in identifying and addressing issues like contamination, counterfeiting, and fraud by enabling swift recalls and providing transparent product information.

Internal traceability, on the other hand, refers to the ability to track a product within a single organization or a specific part of the supply chain. It involves monitoring the flow of materials and components through various stages of the production process within a company. Internal traceability systems record data such as batch numbers, processing dates, and quality control results. This way, the movement of products within an organization can be precisely tracked. Order number tracking is an example of internal traceability.

Both products and processes are traceable. While the physical movement of a product can be traced, the processes related to the product are also traceable. A Requirements Traceability Matrix (RTM) is used to enable the traceability of requirements and tests in product development, for example. This is further explained in the sections below.

What is a Requirements Traceability Matrix (RTM)?

A Requirements Traceability Matrix (RTM) is a software development and project management tool used to ensure that all project requirements are tracked throughout the lifecycle of the project. In an ideal supply chain, an RTM is created very early in the project lifecycle, during product development.

Traceability systems such as an RTM are used to ensure traceability of artifacts, test cases and other important elements. By mapping processes and tracing data, companies can improve the quality and safety of their products. Traceability makes it possible to establish links between different stages of development and production. This leads to better traceability and a clearer context for all parties involved.

An RTM is typically used in industries that require traceability in order to prove compliance with standards or regulations, such as the aerospace, automotive, and medical device industry. These industries use embedded systems that combine both hardware and software.

For example: In the medical device industry, an RTM is used by developers to prove that medical devices are compliant with Food and Drug Administration (FDA) and International Organization for Standardization (ISO) regulations, and are safe for patient use.

There are three types of traceability within the RTM model: Forward, backward, and bidirectional traceability.

Traceability and Sustainability

Traceability is becoming increasingly important not only for consumers, but also for manufacturers. It contributes to sustainability for companies in modern supply chains. Traceability solutions are enablers of circular economy. This involves tracking a product throughout its entire lifecycle. This allows companies to optimize resource use, reduce waste, and improve recycling processes by providing detailed information about the origin, application, and status of materials. By knowing where materials come from and how they are used, companies can implement more efficient recycling and reuse strategies. This way, waste is minimized and resources are conserved.

There are certain protocols for circularity transparency. These include United Nations Economic Commission for Europe’s (UNECE) traceability standards for sustainable clothing and footwear, and the GS1 Global Traceability Standard, for example.

Wireless IoT Technologies and Traceability

  • RFID

    Radio Frequency Identification (RFID) tags are used to identify and track products throughout the supply chain. These tags store data about the item, which can be read by RFID readers at various points in the supply chain.

  • Bluetooth LE

    By placing Bluetooth Low Energy (BLE) beacons at key locations, businesses can monitor the movement of goods within a facility, track inventory levels, and ensure the proper flow of materials through production processes.

  • NFC

    Near-Field Communication (NFC) tags are attached to products, enabling consumers and businesses to access detailed information about the item by tapping it with an NFC-enabled device, such as a smartphone. This is particularly useful for product authentication, anti-counterfeiting measures.


    Low Power Wide Area Network (LPWAN) technology like LoRaWAN is used to track the location of products over long distances. LoRaWAN-enabled devices can be attached to products, containers, or equipment. This is particularly useful for tracking goods in transit, monitoring remote assets.

  • WLAN

    In traceability, Wi-Fi can be used for real-time location systems (RTLS) and asset tracking within facilities like warehouses, hospitals, and large retail stores. Wi-Fi tags and sensors can be attached to assets, enabling constant monitoring and data transmission to centralized systems.

Products Designed for Traceability Solutions

IoT traceability solutions involve a combination of various hardware and software components that work together to track and monitor products and materials throughout their lifecycle. Different hardware and software are required for each respective IoT technology used.

RFID-based traceability solutions use RFID tags and wireless RFID readers. RFID tags are small devices that store data about the product they are attached to. The RFID readers are devices that emit radio waves and read the data stored on RFID tags. On the software side, RFID middleware and asset management systems are typically used. The RFID middleware processes and filters data from RFID readers before sending it to enterprise systems. IoT asset management systems store and analyze data from RFID tags, providing insights into inventory levels, asset locations, and movements.

An NFC-based traceability solution uses NFC tags or devices, in combination with NFC readers, NFC management apps, and product authentication systems. A BLE-based system uses BLE beacons, BLE gateways, beacon management software, and location tracking platforms. LoRaWAN-based traceability solutions use LoRaWAN sensors and tags, LoRaWAN gateways, LoRaWAN network servers, and remote monitoring platforms.

Traceability systems typically include software solutions that enable the collection, storage and evaluation of data. These tools are often part of a comprehensive tool chain that covers various aspects of production and development. An important element are test case management tools that ensure that test cases are linked to requirements and other artifacts. Source code management systems enable the traceability of changes and their relation to specific requirements. Process modeling and documentation tools also play an important role in ensuring the mapping and traceability of processes. By using these tools, companies can build a comprehensive network of tracking and traceability.

The hardware and software required depends on the type of IoT technology used.

Facts & Figures

Traceability solutions are on the rise in many industries. According to the market research platform “Gitnux”, the global market for track and trace solutions is expected to reach 7.4 billion USD by 2028. 98 percent of automotive manufacturers plan to increase the use of track and trace technology by 2030. Traceability software is being used by 30 percent of produce companies. 55 percent of companies surveyed claim that track and trace technology is a necessity in order to stay competitive in logistics. In fact, the logistics sector accounted for the largest market share of the track and trace market in 2020 at 34.7 percent.

2. In Practice

Successful Examples of Traceability Solutions

Traceability typically involves industrial labeling and identification for asset tracking throughout supply chains in all industries. Traceability is commonly part of IoT asset management solutions.

Traceability is an important part of digitalization in logistics. Shipments are tracked in real-time, and the movement of goods can be traced throughout the supply chain. In cold chains, track and trace solutions that use sensor technology are used to ensure that temperature-sensitive products stay within required temperatures during transit (temperature monitoring). This applies to many industries, such as healthcare, and food retail, for example.

As part of digitalization in agriculture, IoT-based track and trace solutions are used to monitor and document the journey of agricultural products from farm to final customer. This process involves recording detailed information about each stage of production, including planting, cultivation, harvesting, processing, and distribution. Traceability systems in agriculture track data such as the origin of seeds, use of fertilizers and pesticides, farming practices, and environmental conditions. This comprehensive documentation helps ensure food safety, quality, and compliance with regulatory standards.

Track and trace systems support counterfeit protection measures in healthcare, retail, and in production and construction. Products with unique identification numbers can be tracked and traced at any point in the supply chain. This makes it much harder for counterfeit products to enter the supply chain.

In the healthcare industry, traceability enables the counterfeit protection of pharmaceuticals, as well as the recall management of defective or harmful medication batches. This is part of digitalization in healthcare.

Part of the digitalization of the automotive industry is the use of the Internet of Things (IoT) to track components from production, to assembly. Defective car parts can be easily recalled with a track and trace solution in place. Traceability is also important for car tires. In 2000, there was a significant number of tire recalls in the US due to defects. As a result, the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act was implemented, and the traceability of tires is a requirement for tire manufacturers. Radio Frequency Identification (RFID) transponders are embedded in tires to enable track and traceability throughout the tire lifecycle. This supports tire recycling and circular economy.

Track and trace solutions optimize inventory control and management, enable anti-theft-protection, and automate replenishment in retail stores. This ultimately results in improved customer service and satisfaction. In food retail, food traceability ensures food safety and quality control. This is all part of digitalization in retail.

Traceability also plays an important role in software development by enabling the linking of requirements, source code, and system tests. This leads to better traceability and quality assurance in development projects.

The following real-world examples show different traceability solutions in different supply chains, each using wireless IoT technologies.

Traceability of Wool Bales at AWEX

All new wool packs in Australia have been fitted with an RFID eBale tag since July 2023 to enable wool bale traceability. The RFID system was implemented by the Australian Wool Exchange (AWEX). The eBale tags, developed in cooperation with HID, are customized versions of the IQ Pro Label RFID tag. The tag has an RFID chip and QR code with a unique number and is attached to every wool bale. Data is captured using RFID readers. Using the WoolClip program, wool data is captured on the farm. This data is transferred to the selling agent, warehouses, logistics and transport centers, and to domestic and international processing customers. With the unique ID, each bale is fully traceable throughout the entire supply chain. AWEX is committed to rollout five million tags for the wool market over three years of wool production.

Teaser: Awex Protects Wool Bale Integrity & Traceability WITH RFID TAGS
AWEX Protects Wool Bale Integrity & Traceability With RFID Tags

“With the support of the entire Australian wool industry, AWEX is in a unique position of being the one organization that can implement a new RFID-based traceability system and standard that will impact the entire industry.”

Mark Grave

CEO, Australian Wool Exchange

Logo Australian Wool Exchange AWEX

Laundry Traceability at Les Lavandières de Provence

The industrial laundry Les Lavandières de Provence in France is using an RFID-based track and trace solution to manage all laundry items. 60,000 laundry items were equipped with LinTRAK RFID tags from HID. These tags contain unique IDs that contain information about each laundry item, such as the laundry type, age, or color. Laundry items are tracked at the area of incoming goods. Laundry carts and trolleys are equipped with RFID tags. The carts and trolleys pass through an RFID transit portal. The linen management platform Acuity documents how many textiles enter the laundry. In the sorting area, RFID scanners are used to perform quality control checks and to count the laundry. Several hundred items can be counted every few seconds. Clean laundry are placed on RFID-enabled trolleys and pushed through the RFID transit portals to be shipped to customers. The Acuity platform provides an overview of linen inventory movement.

Teaser: Les Lavandières de Provence: Laundry Management with UHF RFID and CLOUD SERVICES
Laundry Management with UHF RFID and Cloud Services

“Our customers appreciate the exactness and transparency of the linen stocks we deliver. This is the service we provide. This establishes trust and long-term cooperation.”

Laurence Hakimi

General Manager, Les Lavandières de Provence

Logo Les Lavandières de Provence

Supply Chain Traceability with NXP Semiconductors

In the logistics of fruit and vegetables is subject to high demands and quality standards. With UHF RFID traceability solutions, such as the UCODE chips from NXP Semiconductor, all fruit and vegetable containers can be tracked in real time within the supply chain. This ensures the freshness and quality of fruit and vegetables. By labeling the units with UHF RFID and using a merchandise management system, older food products can be positioned in the warehouse so that they are sold more quickly. The result: Increased customer satisfaction.

Teaser: Food Supply Chain
Track & Trace Solutions for the Food Supply Chain
3. Panorama

The Future of Traceability in the Supply Chain

The future of traceability is being shaped by several emerging trends that promise to enhance the accuracy, efficiency, and scope of tracking in supply chains.

One significant trend is the increasing integration of blockchain technology with IoT devices. Blockchain provides a secure, immutable ledger for recording transactions, which, when combined with IoT, can ensure that every step of a product’s journey is transparent and tamper-proof. Another trend is the development of more sophisticated AI and machine learning algorithms that can analyze vast amounts of traceability data to predict potential disruptions, optimize logistics, and improve decision-making processes. Additionally, the increasing adoption of 5G networks will enable faster and more reliable data transmission, enhancing real-time tracking capabilities. Sustainability and regulatory pressures are also driving advancements in traceability, with a growing emphasis on tracking environmental impact and ensuring compliance with evolving regulations.

Advantages of IoT-Based Traceability Solutions

Traceability with IoT offers numerous advantages. IoT-based traceability solutions provide real-time visibility, allowing companies to monitor the exact location and status of their assets at any time. This improves inventory accuracy, reduces shrinkage, and ensures timely deliveries. IoT-enabled traceability also increases operational efficiency throughout the supply chain by automating data collection and reducing manual interventions. This way, labor costs are reduced and errors minimized. Another major advantage is improved quality control, as IoT sensors can monitor environmental conditions such as temperature and humidity, ensuring that products are stored and transported under optimal conditions. This is particularly important for industries like pharmaceuticals and food and beverage, where product integrity is critical.

Another advantage of the implementation of traceability systems in production is the increased quality assurance, since errors can be detected and corrected at an early stage. Traceability enables companies to trace the origin and path of each component or product, which is especially important in safety-critical industries such as automotive or aerospace. Traceability allows recalls to be carried out more efficiently and targeted, saving costs and time. Traceability systems also help meet legal requirements and standards such as IEC standards. Another benefit is improving customer satisfaction, as transparent processes create trust. Overall, traceability leads to better collaboration and communication within the company and with external partners.

Advantages of Wireless IoT

  • Real-Time Visibility
  • Increased Operational Efficiency
  • Regulatory Compliance
  • Increased Transparency
  • Improved Quality Control

Challenges of Traceability with IoT

Despite its numerous benefits, implementing traceability with IoT comes with several challenges. One of the main challenges is data security and privacy. The vast amount of data generated by IoT devices needs to be protected from cyber threats. Ensuring data privacy can be complex, particularly when data is shared across multiple stakeholders.

Another challenge is integration and interoperability. IoT devices and systems often need to be compatible with existing infrastructure and with each other, which can be technically challenging and costly. The high initial costs and investment required for deploying IoT devices and supporting infrastructure can also be a barrier for some companies. Additionally, the management and analysis of large volumes of data generated by IoT devices require advanced analytical tools and skilled personnel, which can be resource-intensive. Ensuring reliable connectivity and power supply for IoT devices, especially in remote or harsh environments, can be a significant logistical challenge.

Addressing these challenges is crucial for the successful and widespread adoption of IoT-enabled traceability solutions.

Outlook – Next-Level Traceability

The future of traceability is being shaped by innovative technologies like blockchain, AI, and ML, as well as growing sustainability concerns. These trends are enhancing supply chain transparency, efficiency, and responsibility.

Artificial Intelligence (AI) and Machine Learning (ML)

As AI and machine learning algorithms become smarter, companies are able to analyze larger volumes of traceability data in order to predict disruptions and optimize logistics. Decision-making will be further improved. The continued advancement and integration of AI and ML in traceability systems will enable more proactive and dynamic management of supply chains.

Blockchain Technologies

Blockchain is emerging as a future trend in traceability due to its ability to provide a secure, immutable, and transparent record of transactions. As supply chains become more complex and global, ensuring the integrity and authenticity of data is crucial. The adoption of blockchain is expected to grow as companies seek to improve transparency and accountability in their supply chains.


Sustainability is becoming a central focus in the future of traceability as businesses and consumers increasingly prioritize environmental responsibility. Traceability systems are evolving to track not only the movement of products but also their environmental impact, including carbon footprints and resource usage. The concept of a circular economy is becoming increasingly important in modern supply chains.

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