What Is Track & Trace? The Importance Of Track & Trace In Logistics

"Where is my order/shipment? What is the Estimated Time of Arrival (ETA)? Is the order delivered as planned, or is there a disruption? What is the current and past location and status of this shipment?..." Perhaps this is the information that every manager wants to know to control his fleet, goods, and orders. As supply chains become increasingly complex, real-time visibility becomes even more critical. It helps managers accurately track and trace the physical location of objects, from raw materials to finished products and from storing to picking, packing, transporting, and delivering products to consumers. More and more businesses are looking for new technology solutions to increase visibility and transparency across every stage of the supply chain. In this article, Abivin will discuss the concept of Track & Trace - a solution to help businesses improve their supply chain visibility.

1. What is Track & Trace?

The term Track & Trace was first used in the United States by businesses like UPS and DHL to give their customers greater insight into the location of parcels and packages.

Nowadays, Track & Trace is more widely used in the logistics industry. It allows companies to determine the physical location and status of goods in the supply chain.

Track & Trace is more widely used in the logistics industry
Track & Trace is more widely used in the logistics industry

Track is the act of following a trail left by the movement of a shipment or an asset. Trace refers to tracking the movement of a shipment, property, or even the temperature of a package.

In general, Track & Trace is a task/system implemented/used by shippers or carriers to record the movement of parcels or goods during transportation.

The core mission of Track & Trace is to create a transparent end-to-end supply chain so that customers, partners, and logistics companies can know the exact location of goods and shipping status at any time. Moreover, the Track & Trace system also helps to improve the efficient management of the logistics network and improve the quality of customer service.

2. How does Track & Trace work?

The Track & Trace system helps automate the process of collecting and recording important information about goods through tracking and tracing their origin and status throughout the supply chain.

How the DHL Track & Trace system works (Source: Accenture/DHL)
How the DHL Track & Trace system works (Source: Accenture/DHL)

By using Track & Trace in production, each tracking object (raw material or finished product) will be assigned a separate barcode and stored in the database. Every time the object goes through a stage such as packing, crating, palletizing, it will be given a new barcode and updated into the system.

In addition, Track & Trace is used during distribution and transportation. When a product is tracked to a predetermined location in the supply chain network, shipment information (including packaging, delivery location, delivery time, etc.) will be sent to the system database.

Managers can also manage and authenticate goods through Track & Trace, effectively ensuring a transparent supply chain, saving costs, time and enhancing customer satisfaction experience.

3. The benefits of Track & Trace

Workflow inconsistency often occurs when individuals within an organization cannot fully grasp and understand the activities happening at each level of the supply chain.

As a result, visibility and transparency in all supply chain operations are necessary to improve workflow, save time on manual work, reduce production waste, increase profits and improve customer experience.

Here are five benefits that Track & Trace brings.

Manage the material flow

Track & Trace helps to automatically track production data, ensuring that the process complies with regulations.

Before starting the production process, having complete information about the availability of essential resources enables a smoother workflow.

Specifically, capturing the exact quantity, location, and condition of raw materials and appliances helps prevent unexpected situations that can cause production line interruptions, such as the supply shortage, poor quality of raw materials, etc.

If the business deals with perishable goods, then Track & Trace will ensure that those materials are in use first, minimizing the company’s risk of waste and cost.

Track & Trace manages the material flow
Track & Trace manages the material flow

In addition, over time, the depreciation of production equipment will affect the quality of the finished product. The degradation may not be noticeable daily but becomes more apparent after a certain period. If there is Track & Trace, businesses can intervene and handle it in time before it adversely affects the production line, for example, stopping midway.

Track the delivery status in real-time

Inefficient delivery and receipt management leads to a lack of transparency about the location and status of trailers, cargo ships, container fleets, and goods and materials being transported.

The lack of real-time information makes it difficult for logistics managers to accurately determine the location of the above means of transport, followed by the information about goods and the status of orders and recipients.

  • Where is my order now?
  • How long will it take for my order to be delivered?
  • Are goods stored at the correct temperature?
  • Are the goods delivered in sufficient quantities?
  • Are the goods intact when delivered to the customer?
  • Has the order been received successfully without any missing deliveries?
  • Is the recipient satisfied with the order and customer service?
Track & Trace track the delivery status in real-time
Track & Trace track the delivery status in real-time

To remove the above bottlenecks, Track & Trace can provide a lot of information such as container/package location, bill of lading number, customer information, order number, item quantity, weight, status and delivery dates, shipping fees, and more.

As a result, logistics managers can check the location of trucks and ships and track the status of their shipments at any time. With Track & Trace, they can quickly detect whether shipments are being delayed, lost, or damaged, assets are redundant or lacking in transportation, etc.

This information will allow managers to proactively resolve issues as quickly as possible, ensuring shipments are delivered on the right process, on the right schedule, and with the right quality.

Optimize the quality of logistics activities

Track & Trace's ability to track and store data over time provides managers with helpful information to optimize the quality of their logistics operations.

Once goods arrive, Track & Trace can check the product's origin, thereby preventing faulty or tampered shipments before they reach the warehouse.

By tracking and managing all incoming shipments, businesses can quickly know the parameters of those goods and their status at different transportation times to control quality.

In addition, if the data on the condition of the goods, such as quantity, shape, size, etc., is incomplete or has errors, the system will return wrong results, causing the redundant or insufficient arrangement compared to storage space, leading to unoptimized fleet productivity.

Thanks to Track & Trace, managers can overcome the lack of transparency of the above information, reducing errors in the transportation process and saving costs.

Thus, through this system, managers can better control the supply and improve the quality of products and processes to deal with challenges such as product recalls or counterfeit products.

Improve the ability to manage inventory
Track & Trace improves the ability to manage inventory
Track & Trace improves the ability to manage inventory

Knowing inventory levels throughout the supply chain makes planning and inventory management more efficient for each production center.

Track & Trace can help businesses significantly reduce the time it takes to find goods, perform manual inventory checks or count cycles. In some cases, it can eliminate these processes, allowing employees to focus on other essential tasks.

In addition, the Track & Trace system is capable of aggregating data on export, import, shipping, and delivery activities.

Over time, those data will provide managers with a lot of information and changing trends to predict customer needs more accurately and optimize production schedules more efficiently.

Reduce significant customer support workload

In addition to increasing customer satisfaction, Track & Trace also helps businesses reduce the customer support workload. Not only carriers but also manufacturers, retailers, or any customer can track the entire supply chain.

They can make sure that all necessary items are on the vehicle before shipping. They know whether the products have been delivered to customers in sufficient quantity and on time. If an incident occurs, they can promptly respond, ensuring a smooth transportation process.

Indeed, the lack of supply chain visibility leads to fragmented communication, slow response, and ineffective management and transparency. Just a small shipping error not only annoy customers but also causes businesses to find a cumbersome, expensive, and time-consuming way to fix it.

With Track & Trace, businesses can limit these risks, reduce the workload for support staff, and improve the customer service experience.

4. The practice of Track & Trace

Counterfeit medicines, faulty medical equipment, contaminated food, etc., threaten community safety, waste natural resources, erode consumer confidence and destroy the brand reputation.

One reason is that today's supply chain lacks transparency and clarity at every stage, from raw materials to the end consumer product.

People are creating many new types of technology to reduce these problems, towards a safer and more sustainable world. In particular, Track & Trace promises to make a more intelligent supply chain with the ability to track, trace and authenticate everything from start to finish.

Pharmaceutical industry

The World Health Organization (WHO) estimates that 1 million people die each year from counterfeit medicines. A CargoSense study shows that 25% of vaccines lose efficacy due to cold chain problems, and 20% of all temperature-sensitive pharmaceuticals are damaged in the transportation process.

Track & Trace provides pharmaceutical insights at every stage of the supply chain
Track & Trace provides pharmaceutical insights at every stage of the supply chain

The above numbers suggest the safety of the pharmaceutical supply chain is often measured after an incident rather than as a precaution. However, Track & Trace can limit these risks by providing detailed information on drug status, expiry dates, warnings, etc., at every stage of the supply chain.

On the other hand, a recall is inevitable when a product is counterfeit, contaminated, or damaged.

With Track & Trace, organizations can quickly locate items that have been barcoded and stored in a database. Instead of recalling the entire shipment, they simply retrieve the defective products. It reduces cost losses, as well as makes recalls faster and more efficient.

When combined with other disruptive technologies, Track & Trace can help the pharmaceutical industry innovate to connect and communicate with customers.

For example, when customers review a particular product, pharmaceutical companies can use chatbots to instruct them on using the drug or even verify if they have taken the correct dose. It helps companies build closer relationships with end-users and ensure they are using medicines safely.

Medical device industry

Like pharmaceuticals, recalls of medical devices are also highly complicated because they are often on sale everywhere. Tracing back products from customers is time-consuming, expensive, and prone to errors.

Track & Trace helps managers trace the location and condition of medical devices at all times to see if they are faulty or tampered with. The system also helps healthcare facilities manage their inventory and control the quality of devices used on patients.

If there is a device recall at a stage of the supply chain, Track & Trace will alert the user right away to eliminate dangerous or even deadly situations before it happens. No healthcare worker would want to risk providing a patient with a defective or expired product. That's why tracking and traceability are so important.

Food and beverage industry

According to WHO, an estimated 1 in 10 people worldwide fall ill after consuming contaminated food, and 420,000 die each year.

The food and beverage (F&B) industry has a long and complex supply chain. Every manufacturer, distributor, and retailer is responsible for ensuring that food is clean and safe before it reaches the consumer: Where and how is the product processed? What are the origins of the ingredients and their properties?

Take, for example, the infamous melamine scandal in China, in which milk products and baby formula were mixed with nitrogen-containing plastic to fake a high protein content. This notorious case could have been solved by Track & Trace, thereby avoiding the severe consequences that affected 294,000 children, more than 50,000 people in hospital, and six children died.

Food and beverage supply chains can benefit from Track & Trace
Food and beverage supply chains can benefit from Track & Trace

As such, transparency at every stage of the F&B supply chain is of utmost importance. From raw materials to finished products and packaging, everything needs to be under close supervision to avoid many serious consequences related to food health and safety.

5. The future of Track & Trace in logistics

According to the research firm MarketsandMarkets, the global market for Track & Trace technology solutions is expected to grow to $3.93 billion by 2023, reaching a compound annual growth rate (CAGR) of 18,9%. 

Track & Trace is not new, but their applicability in logistics activities is still quite limited. This situation makes it difficult for organizations and businesses to manage and consume a lot of money and time due to the lack of supply chain visibility and real-time data on logistics activities.

The more information manufacturers, retailers, logistics service providers, or any customer are demanding at every stage of the supply chain, the more critical Track & Trace in logistics management becomes.

An integrated Track & Trace system improves supply chain efficiency, saves costs and time, creates more sustainable value, and enhances customer experience. In the future, many technologies such as IoT and Blockchain will be in use to pro


Track & Trace, or supply chain visibility, is gradually becoming necessary for all shippers and carriers. It simplifies finding, tracking, and collecting data from every logistics activity in the supply chain.

Thanks to Track & Trace, managers will have the most accurate information about their shipments anytime, anywhere, thereby enhancing management capabilities, improving visibility, optimizing operational quality, and improving customer satisfaction.

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