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What is Supply Chain Traceability?

Supply chain traceability is the ability to track and document the journey of a product, its components, and materials throughout the entire supply chain, from raw material sourcing through manufacturing, distribution, and the end consumer. That visibility helps organizations answer critical questions about an ingredient’s or component’s origins. It enables the verification of their history, location, and application as they move across the supply chain, providing crucial information to regulators, consumers, and other stakeholders.

Introduction
Supply Chain Traceability vs. Food Traceability
Why Supply Chain Traceability Matters
Regulatory Drivers
How Supply Chain Traceability Software Works
Key Feature to Look for in Traceability Software
Challenges in Supply Chain Traceability
Real-world Traceability Examples and Case Studies
The Future of Supply Chain Traceability
How Trace One Supports Traceability
Supply Chain Traceability FAQs

Supply chain traceability is an important capability in all manufacturing industries, from cosmetics to specialty chemicals, but it’s especially crucial for food and beverage producers. Regulatory frameworks like the U.S. Food and Drug Administration’s (FDA) Food Safety Modernization Act (FSMA) emphasize traceability's role in the rapid identification and removal of potentially contaminated products from the market.

Modern supply chain traceability supports product safety across several areas:

Ensuring compliance with evolving regulations

Providing a foundation for sustainability initiatives and due diligence reporting

Improving operational efficiency through real-time visibility

Enabling proactive risk management, along with rapid recall, fraud prevention, and counterfeit detection

Building brand trust through consumer transparency, substantiating claims, and enabling differentiation

A New View on Traceability

Business leaders are also starting to recognize that traceability is about more than crisis management. In an environment where consumers increasingly want to know the story behind their products and regulators require documented proof of compliance, traceability serves as the digital backbone that connects disparate systems, suppliers, and stakeholders.

It's important to see traceability as more than just a set of compliance or food safety capabilities. Instead, consider ways to integrate it across your product lifecycle management (PLM) process and platforms. A holistic view transforms traceability from a cost center into a competitive advantage that protects your margins, accelerates time-to-market, and strengthens your relationships with both suppliers and consumers.

Supply Chain Traceability vs. Food Traceability

While some manufacturers draw a sharp distinction between supply chain and food traceability, they aren’t mutually exclusive. Whether you’re a specialty chemical manufacturer or a food and beverage producer, you’ll be responsible for applying many of the same principles and practices. In spite of this overlap, the food and beverage industry does face unique challenges and regulatory strictures. Food plays a central role in people’s wellbeing, so food and beverage traceability has a stronger focus on public health, recalls, outbreak investigation, and regulatory compliance.

As a result, food manufacturers face some of the most stringent regulations. Frameworks like the FDA's FSMA and the EU's General Food Law mandate traceability. They require manufacturers to maintain detailed records around a product’s origin, processing conditions, and distribution channels.

The best food traceability software addresses industry-specific challenges for food and beverage manufacturers:

Tracking temperature-sensitive ingredients across cold chains
Managing allergen cross-contamination risks
Documenting supplier certifications and audit results
Enabling rapid recall execution
Providing product visibility from farm to fork

Beyond regulatory compliance, robust traceability in the food supply chain protects brand reputation in an era of heightened consumer awareness, supports sustainability claims with verifiable data, enables proactive supplier quality management, and builds trust through transparency.

Learn how Trace One drives innovation and compliance in the food & beverage industry

Why Supply Chain Traceability Matters

In an interconnected global marketplace, regulatory pressure is intensifying, consumer expectations are evolving, and the financial consequences of traceability gaps have never been more severe. The importance of supply chain traceability has never been greater. This discipline has transitioned from a back-office compliance function to a board-level strategic priority.

Regulatory Compliance and Risk Mitigation

Regulatory bodies worldwide are tightening traceability requirements. The FDA's FSMA represents just one example of a broader global trend toward mandatory, digitized tracking. Non-compliance leads to fines, market access restrictions, supply chain disruptions, and even criminal liability. Traceability wards off these outcomes by creating an auditable record that demonstrates due diligence and regulatory adherence across every touchpoint in your supply chain.

Recall Efficiency and Cost Containment

When a quality issue arises, speed and precision determine its financial outcomes. Without the right tools, recalls become slow, reputation-damaging, legally punishing, and ultimately costly guesswork. With the right traceability capabilities, you can execute surgical recalls to remove only affected lots rather than pulling entire product lines from shelves. This precision minimizes waste, reduces costs, and accelerates a return to normal operations, with the potential to minimize a recall’s effect on your brand’s reputation. In best-case scenarios, you can recall a product before consumers even become aware of the issue.

Brand Protection and Consumer Trust

Consumer behavior research reveals a sobering reality: When a major recall event takes place, more than 60% of consumers avoid entire food categories. In an environment where a single recall can trigger permanent brand abandonment, traceability serves as your first line of defense. It enables transparent communication during crises, demonstrates your commitment to safety, and provides the verifiable origin stories that today's conscious consumers demand.

Operational Excellence

The benefits of supply chain traceability go beyond regulatory compliance to drive profound operational impacts. When you integrate traceability into comprehensive product lifecycle management platforms, you gain the ability to enhance supplier quality management, identify inefficiencies in your supply network, support sustainability reporting with documented proof, and enable data-driven decision-making across procurement, production, and distribution.

FSMA Food Traceability Rule (U.S.)

The FDA's Food Safety Modernization Act (FSMA) Rule 204, formally known as the Requirements for Additional Traceability Records for Certain Foods, represents the most significant expansion of U.S. food traceability requirements in decades. Originally set to take effect in January 2026, the compliance deadline has been extended to January 2028, giving manufacturers additional time to implement the systems required to meet these stringent standards systems required to meet these stringent standards.

FSMA 204 applies to foods on the Food Traceability List (FTL). These include products identified as high-risk for foodborne illness outbreaks, like fresh-cut fruits and vegetables, certain cheeses, shell eggs, nut butters, and finfish. For manufacturers working with these commodities, the rule mandates end-to-end lot-level tracking with detailed recordkeeping at Critical Tracking Events (CTEs): harvesting, cooling, initial packing, shipping, receiving, and transformation.

The data requirements are extensive, and they take the form of key data elements (KDEs). While CTEs define the stages where you collect the data, KDEs define the data you need to collect: what item you’re tracing, when you made the record, where you’re tracing the item, and the business entity responsible for the item at this step.

Companies need to maintain records that include traceability lot codes, product descriptions, quantities, location identifiers for origins and destinations, and reference documents linking each movement. Manufacturers are responsible for providing this information to the FDA within 24 hours of a request. That timeline makes manual, paper-based systems effectively obsolete.

To meet FDA traceability compliance requirements, manufacturers need integrated digital systems with sophisticated capabilities:

Capturing KDEs at each CTE
Linking lot codes across transformation steps
Generating interoperable records you can share with supply chain partners
Producing FDA-compliant reports on demand

The extended 2028 deadline offers breathing room to manufacturers, but the complexity of implementation means it’s important to invest in your traceability infrastructure now instead of scrambling as the deadline approaches.

EU Deforestation Regulation (EUDR)

The European Union Deforestation Regulation (EUDR) came into effect in June 2023. This landmark regulation takes traceability requirements beyond food safety into environmental accountability by prohibiting the sale of products linked to deforestation or forest degradation.

The EUDR applies to seven key commodities frequently used in food and beverage manufacturing: cattle, cocoa, coffee, oil palm, rubber, soy, and wood, as well as derivative products like chocolate, leather, furniture, and paper. For each product entering the EU market, companies need to provide geolocation coordinates for their commodities’ place of origin with verifiable proof that no deforestation occurred on that land after December 31, 2020.

Learn more about Trace One and Connecting Food partnership on global food supply chains

Real-world challenge: Cocoa Suppliers in Ghana

This legislation is particularly challenging for supply chains dependent on smallholder farmers. The primary challenges center on high numbers of intermediaries and a lack of technology for tracking and providing evidence about the origins of raw materials and the actors involved.

Under Ghana's pilot programs to geolocate cocoa farms, many producing regions are racing to build the technical infrastructure and farmer training programs necessary to capture and verify data at the farm level. Compliance requires deep visibility into tier-2 and tier-3 suppliers, a level of transparency many manufacturers simply can’t provide today.

Fundamentally, the EUDR mandates due diligence. Companies are responsible for risk assessments, mitigation measures when they identify risks, and comprehensive documentation that proves compliance. Non-compliance carries severe penalties, including fines and exclusion from European markets. For global manufacturers, meeting EUDR requirements often means investing in sustainability-focused traceability platforms that can handle complex, multi-tier supply chain mapping and verification workflows.

How Supply Chain Traceability Software Works

Modern supply chain traceability software transforms fragmented data from across your value chain into a unified, actionable system of record. Rather than relying on disconnected spreadsheets, email chains, and paper documentation, leading supply chain management software platforms create digital threads that connect every movement, transformation, and handoff from raw material to finished product.

Two foundational concepts are at the core of effective traceability systems: Critical Tracking Events (CTEs) and Key Data Elements (KDEs). CTEs represent specific moments in a product's journey where manufacturers need to track data: harvesting, cooling, packing, receiving, shipping, and transformation. At each CTE, the system captures KDEs: traceability lot codes, product descriptions, quantities, location identifiers, timestamps, and reference documents linking materials to outputs.

By structuring data capture around CTEs and KDEs, traceability software ensures that manufacturers bake regulatory requirements into daily operations instead of just returning to these elements during audits.

Traceability software needs to accommodate data from multiple sources and formats. Modern platforms integrate with existing enterprise platforms, including enterprise resource planning (ERP) software, manufacturing execution systems (MES), and warehouse management systems (WMS), to automatically pull production, purchasing, and logistics data without manual re-entry. Cloud-based supplier portals enable direct data submission, certificate uploads, and specification management. IoT devices and sensors provide real-time monitoring of temperature, humidity, and location during transit, creating continuous visibility rather than periodic snapshots.

Some advanced implementations use blockchain technology to create immutable, distributed records that enhance trust across multi-party supply chains. But the most critical capability is normalizing widespread data into a standardized, searchable format.

The real power of traceability software comes from its bidirectional trace capabilities. Forward tracing identifies every downstream location of affected materials, enabling precise recall execution. Backward tracing supports rapid root cause analysis by revealing complete ingredient origins and processing history.

When comprehensive product lifecycle management platforms integrate traceability data, they provide the foundation for supplier quality scorecarding, sustainability reporting, compliance dashboards, and predictive analytics that identify supply chain risks before they become crises.

Key Features to Look for in Traceability Software

Selecting a supply chain traceability solution is about evaluating capabilities that address both external regulatory pressures and internal operational needs. As you assess traceability software features, prioritize platforms that deliver automation, robust tracking and documentation, and seamless integration and accessibility.

Your system should generate audit-ready reports aligned with regulatory frameworks like FSMA 204 and EUDR without manual data manipulation. Look for pre-built templates and one-click report generation that responds to regulatory inquiries within mandated timeframes.

Effective solutions need to trace upstream to raw material origins and downstream to distribution channels. This dual capability enables surgical recalls, rapid root cause analysis, and comprehensive lot genealogy while visualizing relationships intuitively so you can identify all affected products within minutes.

Your traceability solution should integrate with your existing ERP, quality management, warehouse management, and product lifecycle management systems. APIs and pre-built connectors eliminate manual data entry, reduce errors, and ensure data automatically flows across your technology ecosystem.

Cloud-based supplier portals allow partners to submit certificates of analysis, upload specifications, provide geolocation data, and maintain current certifications. That connectivity creates a single source of truth accessible to all authorized stakeholders.

Download Trace One Devex PLM Supplier Collaboration Portal Datasheet

Field teams, quality inspectors, and warehouse personnel need traceability data at the point of activity. Mobile-optimized interfaces enable barcode scanning, on-site data capture, and real-time access to product histories to make traceability practical for frontline operations.

Interoperability makes the difference between a closed silo and a functioning ecosystem. Modern traceability systems offer standards support like GS1 identifiers. This improves collaboration with suppliers, customers, and regulators without custom integrations.

During a recall or the production of compliance reports, speed is everything. For example, the FDA expects traceability data within 24 hours. Systems that provide easily configured dashboards help stakeholders quickly visualize and communicate product information to minimize the scope of recalls, reduce costs, and protect brand reputation.

Challenges in Supply Chain Traceability

While the benefits of supply chain traceability are clear, the realities of implementation are complex. Understanding traceability barriers upfront can help you plan effectively and select solutions that address real-world obstacles.

Supplier Adoption and Multi-Tier Visibility

One of the most significant supply chain traceability challenges lies beyond your direct control: supplier participation. It’s relatively easy for manufacturers to oversee tier-1 suppliers, but they may lack visibility into tier-2 and tier-3 sources, where risks often originate. For example, Indonesian palm oil suppliers anticipate disruption from EUDR enforcement because of fragmented supply chains with limited digital infrastructure. These smaller suppliers might see traceability as burdensome rather than beneficial, lack technical capabilities, or resist data-sharing requirements.

Data Accuracy and Standardization

Traceability systems are only as reliable as the data they contain. Information might arrive in inconsistent formats like PDFs, spreadsheets, or even handwritten documents, and errors can creep in during the manual entry process. Simultaneously, a lack of real-time validation can compound inaccuracies throughout the supply chain, undermining confidence.

System Interoperability and Cost

Many organizations operate technology ecosystems assembled over decades. Achieving seamless data flow across legacy ERP systems, quality platforms, and warehouse management tools depends on robust integration capabilities. At the same time, implementation costs extend beyond software licensing to include system integration, supplier onboarding, staff training, and ongoing data management, which can feel prohibitive for mid-sized manufacturers.

You can address these challenges by selecting platforms like Trace One solutions, PLM software purpose-built to integrate regulatory compliance and collaborative supply chain management into your workflows. Supplier quality management systems with intuitive portals reduce adoption friction. Meanwhile, integrated product lifecycle management platforms eliminate interoperability issues by unifying traceability with specification management, quality control, and procurement workflows.

SEE HOW CUSTOMERS USE Trace One Devex PLM Real-world Traceability Examples and Case Studies

Food and Beverage

Brown-Forman Corporation stays ahead of the curve on product traceability and visibility with Trace One Devex PLM

Brown-Forman Corporation, a major spirits and wine company, implemented Trace One Devex PLM to manage complex multi-country ingredient sourcing and maintain compliance with evolving traceability standards like FSMA. The centralized platform provides comprehensive visibility into product attributes, specifications, and ingredient sourcing. Now, Brown-Forman can conduct rapid formula adjustments, perform deeper cost analysis, and provide quick responses to consumer inquiries about production and origin.
Food and Beverage

Belgian food manufacturer turns to Trace One Devex PLM for digitalized product development

Discover how Vandemoortele modernized recipe management with a unified PLM platform that boosts transparency, strengthens supplier interactions, and streamlines development by bringing supply chain process management into one system.
Specialty Chemicals

Global chemical producer advances its innovation process with Trace One Devex PLM

See how a global chemical manufacturer unified R&D and raw material workflows with Trace One Devex PLM, centralizing supplier management, improving supply chain traceability, proactively managing potential issues, and driving smarter, data-driven innovation.

The Future of Supply Chain Traceability

Supply chain traceability is evolving into a strategic intelligence layer that drives competitive advantage across sustainability, consumer engagement, and operational excellence. As these capabilities evolve, three key trends are emerging.

AI-Enabled Analytics and Predictive Intelligence
Tomorrow's traceability systems are engines for both tracking and prediction. AI-powered analytics will identify patterns in supplier performance, forecast potential quality issues before they occur, and recommend optimal sourcing strategies. Solutions like Trace One Analytics can query complex datasets in real time, replacing manual, error-prone research with instant, data-driven insights across thousands of product specifications to transform decision-making.
Consumer Transparency as a Competitive Differentiator
Modern consumers want to know the complete story behind the products they buy, so supply chain transparency is becoming a purchase driver. As a result, brands are using traceability data to provide QR code experiences that reveal ingredient origins, sustainability certifications, and ethical sourcing practices.
Download our whitepaper and discover the path to end-to-end transparency
Sustainability Integration and Digital Transformation
Traceability infrastructure increasingly needs to serve two purposes: regulatory compliance and sustainability reporting. From carbon footprint tracking to deforestation-free sourcing verification, the same systems enabling FSMA compliance will power ESG disclosures and circular economy initiatives.

Traceability is the connective tissue behind compliant, sustainable products that consumers trust. Integrated platforms that unite traceability with quality management, supplier collaboration, and product lifecycle management create ecosystems where data flows seamlessly, decisions happen faster, and teams focus on innovation rather than manual information gathering.

How Trace One Supports Traceability

Trace One solutions help manufacturers transform internal processes and manage suppliers more effectively. Our comprehensive platform connects different software capabilities, teams, and suppliers into a unified ecosystem purpose-built for the complexities of process-based manufacturing.

An Integrated PLM Platform

Our PLM solutions integrate specification management, formulation tracking, and supplier collaboration into a single source of truth. The platform captures every CTE and KDE from ingredient sourcing through production and distribution, eliminating manual data entry while ensuring regulatory-ready documentation.

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A Foundation for Regulatory Compliance

Built-in compliance capabilities perform real-time checks throughout product development, ensuring adherence to FSMA 204, EUDR, and global regulatory frameworks. Automated compliance reporting generates audit-ready documentation on demand, preventing compliance gaps before they reach production.

Maintaining Supply Chain Excellence

Cloud-based supplier portals enable direct submission of specifications, certificates of analysis, and compliance documentation. This collaborative approach accelerates onboarding, standardizes data capture, and creates multi-tier visibility.

Traceability Through Connectivity

Through our strategic partnership with Connecting Food, we combine detailed PLM capabilities with real-time agricultural and logistics tracking. Integrating supply chain traceability software helps us deliver supplier-to-shelf transparency, enabling rapid recalls, compliance for deforestation-free sourcing, and consumer-facing QR code experiences.

Partners in Sustainability

By partnering with Mondra, we unlock the power of product data to deliver fast, accurate environmental impact assessments, including carbon footprint, at scale. Actionable sustainability insights enable faster, data-driven decisions that help manufacturers reduce environmental impact across the product lifecycle.

What is supply chain traceability?

Supply chain traceability is the ability to track and document a product's journey throughout the entire supply chain, from raw material sourcing through manufacturing, distribution, and delivery to the end consumer. It helps you answer critical questions about product origins, processing locations, and movement history, supporting compliance, quality management, recall efficiency, and transparency initiatives.

How does supply chain traceability differ from food traceability?

Food traceability is a specialized application of supply chain traceability focused specifically on food products. While the underlying principles are the same, food and beverage manufacturers face stricter regulatory requirements like FSMA 204. They’re responsible for more detailed recordkeeping around CTEs like harvesting, cooling, processing, and temperature monitoring throughout the cold chain.

What is the FSMA traceability deadline?

The FDA's FSMA Rule 204 compliance deadline has been extended to January 2028. This regulation requires detailed traceability records for foods on the FTL, including lot-level tracking at CTEs and the ability to provide comprehensive documentation to the FDA within 24 hours of request. As a result of the system complexity involved, you may want to consider beginning your implementation now.

What is the EU EUDR regulation?

The EU Deforestation Regulation (EUDR) prohibits selling commodities linked to deforestation after December 31, 2020. It applies to cattle, cocoa, coffee, oil palm, rubber, soy, and wood products, as well as items derived from these commodities. Companies are responsible for providing geolocation coordinates for production land and verifiable proof of deforestation-free sourcing. Non-compliance carries fines and potential market exclusion.

How can SMEs afford traceability software?

Modern cloud-based traceability platforms offer scalable, modular solutions that allow SMEs to start with essential features and expand as needs grow. Many platforms offer tiered pricing, phased implementation approaches, and improved ROI through reduced manual labor, faster recalls, and streamlined supplier management that offset initial costs.

Here’s how Trace One will help to harmonize your data across all systems.

Store and synchronize data: Store product iterations on your PLM platform and synchronize the data for finished products.

Unify material master management: Create material masters in your PLM and ERP systems simultaneously to keep materials, classifications, documents, and BOMs in one place.

Ensure consistency across systems with centralized data that’s continuously up to date.

Eliminate lag time: Kick off manufacturing as soon as you create material masters and automatically translate recipes for your ERP system.

Connect and streamline: Trace One Devex PLM Open Connecter simplifies data transfer through a built-in mass import/export tool, eliminating the need for manual re-entry.

Automate: Automatically format unstructured data to make it compatible with your target system.

Standardize and simplify: Integrate data from multiple systems with one standardized tool based on native SQL technology.

A scalable solution: Trace One Devex PLM Enterprise SOA Connecter offers more complex product information management for businesses that need real-time data updates for multiple processes.

Assured accuracy: Properly format critical product data between systems, ensuring calculations for trace substances, weights, costs, and other key properties.

Flexibility where you need it: Flexible business logic works with your company’s specific processes and data formats.

Blueprinting: We guide your teams through fast, effective design workshops to discover the perfect configuration for your new PLM system.
Implementation: Trace One builds the PLM system based on your unique requirements. We’ll help you settle into your new workflows and support each team on their part in data migration.
Validation: Before launch, we validate the PLM system in your environment based on established use cases and perform detailed testing.
Go live: The clear and guided Trace One approach works to mitigate risk, nerves, and resistance to change. Our experts create a project plan with an eye to minimal downtime as the shift is made from in-development to a live environment.

SAP-friendly: Trace One Devex PLM SAP Connector links directly to your SAP database to translate PLM data and connect complex workflows.

Direct data relationships: Build a direct relationship between PLM materials and SAP material masters, specifications, vendor and customer information, and support documentation.

Visibility and traceability: Enable robust error handling and event logging.