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To understand how track and trace works in supply chain, picture a physical product and a digital record travelling together.

The product receives a defined identity – at item, batch, carton, case or pallet level. That identity is represented through a serial number, barcode, QR code or another suitable carrier. When the product reaches selected points in its journey, an event is recorded against the identity: packed, dispatched, transferred, received, scanned, claimed or verified.

Over time, these events build a history.

Veritech’s track and trace solution follows this principle, connecting serialized labels, QR codes, barcodes, serial numbers and digital records with selected supply-chain events.

Track vs Trace: What Is the Difference?

Tracking is generally forward-looking: where is the product now, or what was its most recent recorded state?

Tracing looks backward: where did the product originate, which points did it pass through and which events are recorded in its history?

Together, these views help a business reconstruct the product journey.

This should not be confused with continuous GPS tracking. An individual packaged product usually becomes visible when a defined scan or business event is recorded.

How Track and Trace Works in Supply Chain Step by Step

Step 1: Create a Unique Product Identity

First decide what you actually need to identify.

A manufacturer may serialize:

• Individual products
• Batches
• Cartons
• Cases
• Pallets

These levels are not interchangeable.

If the business needs to investigate a specific high-value spare part, an item-level identity may be important. If the requirement is only shipment visibility, case- or pallet-level identification may be sufficient.

The decision should be made before selecting code formats or software.

Step 2: Encode and Apply the Identifier

The digital identity must be connected to the physical product.

This can be done through a serialized label, QR code, barcode, serial number or another suitable data carrier.

Code placement matters. A perfectly generated identifier is useless if it becomes unreadable after packaging, is hidden beneath another component or cannot be scanned comfortably on the production line.

For products that also require security, the identifier can be incorporated into intelligent labels or another secure physical format. Veritech’s intelligent-label portfolio combines unique identification, digital authentication, track-and-trace and tamper-evident capabilities.

Step 3: Capture Production and Packing Events

Once identity exists, the system records the first meaningful events.

A product may be commissioned, packed into a carton and subsequently associated with a larger case or pallet.

The exact event model varies by operation. The principle is to record events that answer real business questions rather than scan products merely because scanning is possible.

Step 4: Record Dispatch and Transfer

At dispatch, a record can show that identified goods left a manufacturing plant or warehouse.

Later transfers can create additional events.

A useful event should communicate more than “something was scanned.” It needs enough context to understand what object was involved, when the event occurred, where it took place and why it was recorded.

Step 5: Capture Warehouse or Distributor Scans

Once the product leaves the factory, visibility often becomes harder.

Warehouse receipt, distributor transfer or channel scans can extend the movement history beyond the original plant.

However, more scan points do not automatically mean better traceability.

Every additional scan creates operational work. If users do not understand why they are scanning, compliance drops and the data becomes unreliable.

Choose checkpoints because they support a decision.

Step 6: Verify Products Downstream

Some systems also allow dealers, service teams or consumers to verify an item.

This is where track and trace may connect with product authentication and verification.

The two functions should not be confused.

A scan can tell you that an identifier exists in the database. Authentication logic decides whether the scan behaviour and associated security controls are consistent with a genuine product.

Step 7: Detect Exceptions

A traceability platform becomes more valuable when it recognises patterns that deserve attention.

Examples include:

• Repeated scans of the same identity
• Scans from unexpected locations
• Products appearing outside intended channels
• Missing movement events
• Unusual warranty verification
• Identifiers used in an unexpected sequence

An exception is a signal – not automatic proof of fraud.

Irregular scans may indicate diversion, duplication, misuse or training gaps, so the organisation needs a process for investigation before drawing conclusions.

Step 8: Convert Events into Actionable Reporting

This is where many implementations underperform.

Collecting millions of records is not useful if nobody knows what action should follow.

Operations may need delayed-shipment exceptions. Brand-protection teams may need duplicate-code reports. Warranty teams may need product-history verification. Management may need regional diversion patterns.

Define the audience for each report before launch.

A Practical Product Journey Example

Consider an automotive spare part that needs item-level traceability.

At production, the part receives a unique serialized identity. During packing, that identity is associated with a carton. Several cartons are then aggregated into a shipping case or pallet.

When the pallet leaves the factory, a dispatch event is recorded. At the distributor, receiving staff scan the shipment and record another event. Later, a dealer or service centre verifies the individual part before installation or warranty registration.

If the same item identity is then scanned in another distant region shortly afterwards, the system can flag the pattern for investigation.

This example shows why identity, aggregation and event design need to work together. A QR code alone does not create traceability; the business process around the code does.

Item, Case and Pallet-Level Tracking Explained

Item-level tracking provides the greatest granularity but also creates the largest number of identities and events.

Case-level tracking reduces data volume and may fit distribution operations where individual units do not need independent history.

Pallet-level tracking is useful for logistics movements but may lose visibility when the pallet is broken down.

Many mature systems use aggregation, linking item identities to cases and cases to pallets. When a pallet moves, the system can understand which lower-level units are associated with it.

This structure should reflect the real packing hierarchy.

Where Track and Trace Is Used

Veritech positions track and trace for pharmaceuticals, automotive parts, FMCG, agrochemicals and electronics.

The business need differs by sector.

Pharmaceutical teams may prioritize pack-level verification and controlled distribution. Automotive manufacturers may focus on spare-parts authenticity and warranty workflows. FMCG brands may need broad channel visibility. Agrochemical companies can face extended dealer networks, while electronics businesses may need product, serial and service-history checks.

The technology is flexible; the operating model is not identical.

Common Track-and-Trace Implementation Mistakes

One common error is buying software before mapping the product journey.

Another is creating too many scan points. More events create more data, but they also increase user friction.

Poor code placement, weak integration planning, unclear exception ownership and complex dealer workflows can also undermine adoption.

A better implementation maps the product journey, chooses the required identity level, defines who scans and why, plans ERP or CRM integration early and pilots with real users before scaling.

For buyers moving from process design to software evaluation, Veritech’s Track & Trace Software Buyer Guide explores that selection stage in more detail.

How Veritech Builds Track and Trace Around the Product Journey

Veritech combines digital solutions with labels, holography and security printing. That matters because traceability does not live only inside software.

The physical identity has to survive printing, application, handling and scanning. The backend has to understand what the scan means. Users need a clear workflow when something looks unusual.

So the best implementation question is not “Which features does the software have?”

It is: Which product decisions do we need the system to support?

Final Takeaway

Understanding how track and trace works in supply chain comes down to five things: identity, data capture, events, exceptions and action.

Give the right object a unique identity. Record meaningful events at realistic checkpoints. Build the history. Detect unusual behaviour. Route the result to someone who can act.

Everything else should support that flow.

Frequently Asked Questions

Does track and trace show a product’s exact real-time location?

Not necessarily. Product-level traceability is usually updated when a scan or defined event is captured. Continuous GPS-style tracking typically requires connected location hardware.

Can a QR code be used for track and trace?

Yes. QR codes, barcodes and serial numbers can act as carriers for product identities when the backend system is designed to record and validate associated events.

What is EPCIS?

EPCIS is a GS1 standard for capturing and sharing supply-chain visibility event data using a common structure, helping different systems describe product movements and business events consistently.

Is track and trace the same as authentication?

No. Traceability records movement and history. Authentication determines whether a product or identifier should be treated as genuine. They can be integrated but answer different questions.