Track and trace is the use of individual and aggregated serial numbers to establish a chain of custody for a product as it moves from the manufacturer to point of sale through distribution channels. This process allows anyone along the supply chain to verify the authenticity of the goods in question. Products are then traceable back to their point of origin, creating a more secure supply chain. The usefulness of this process has led to numerous governments adopting regulations requiring serialization in certain industries, such as the pharmaceutical industry, where grey market sales and counterfeiting are a major problem.

With the right track and trace partner, establishing a program of serialization and aggregation can be an easily achieved goal. A good partner can study your production process and help make certain the right systems and software are used to achieve an efficient and effective track and trace program. This can include either the installation of new track and trace systems onto the production line or the addition of track and trace capabilities to existing equipment.

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Serial numbers are generated from a central database, third-party vendor or government agency. The software pulls these numbers as needed and assigns them to products as they move down the production line. Each number is printed on the surface of the product or on a label that is then applied to the package as both a string of human-readable characters and as a machine-readable code. The system records the use of the number and flags it as in use, putting together the hierarchy related to the product and subsequent packages it is inserted into. As the product moves through the supply chain, its movements are logged by scanning the unique identifier, establishing a complete chain of custody for the product from its creation to the point of sale.

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Serialization refers to the generation and assignment of a unique identifying number to an individual product package. This number can then be checked against a database of numbers to verify accuracy. This is what government regulations mean when they refer to "serialization." Track and trace, on the other hand, not only covers the serialization process, but includes bundling of individual serial numbers and refers to the larger process – bundling together individual packages into a single aggregate code and recording the movement of the package as it makes its way through the supply chain. 

Any industry where the threat of counterfeiting or grey market sales exists is ideal for a track and trace solution. Adding traceability to the supply chain makes it easy to put together a chain of custody, which can be useful in the movement of raw materials. It is a requirement for the pharmaceutical industry and sees widespread use in the electronics sector as well. Other industries, such as the clothing industry are looking into track and trace programs as a way of battling the robust counterfeiting industry that springs up around them, as well as black or grey market sales of their high-price designer products. Petrochemical manufacturers are also finding track and trace useful in combating counterfeit operations.