The ability to track materials and products.
Traceability refers to the completeness of the information about every step in a process chain. The formal definition: Traceability is the ability to chronologically interrelate uniquely identifiable entities in a way that is verifiable. Traceability is the ability to verify the history, location, or application of an item by means of documented recorded identification.
In logistics, traceability refers to the capability for tracing goods along the distribution chain on a batch number or series number basis. Traceability is an important aspect for example in the automotive industry, where it makes recalls possible, or in the food industry where it contributes to food safety. The international standards organization EPCglobal under GS1 has ratified the EPCglobal Network standards (esp. the EPC Information Services EPCIS standard) which codify the syntax and semantics for supply chain events and the secure method for selectively sharing supply chain events with trading partners. Theses standards for traceability have been used in successful deployments in many industries and there are now a wide range of products that are certified as being compatible with these standards.
In materials, traceability refers to the capability to associate a finished part with destructive test results performed on material from the same ingot with the same heat treatment, or to associate a finished part with results of a test performed on a sample from the same melt identified by the unique lot number of the material. Destructive tests typically include chemical composition and mechanical strength tests. A heat number is usually marked on the part or raw material which identifies the ingot it came from, and a lot number may identify the group of parts that experienced the same heat treatment. (i.e. were in the same oven at the same time.) Material traceability is important to the aerospace, nuclear, and process industry because they frequently make use of high strength materials that look identical to commercial low strength versions. In these industries, a part made of the wrong material is called "counterfeit," even if the substitution was accidental.
In the Supply chain, traceability is more of an ethical or environmental issue. Environmentally friendly retailers may choose to make information regarding their supply chain freely available to customers, illustrating the fact that the products they sell are manufactured in factories with safe working conditions, by workers that earn a fair wage, using methods that do not damage the environment.