What is StockTraceability?

What is Stock Traceability & How Can it Help Me?

In Manufacturing, Process Improvement by Tamara

Reading Time: 3 minutes

If you’re a small or medium business looking to implement a stock traceability system we have written this blog to help you understand what stock traceability is and how it can help you and your business.

What is Stock Traceability?

Stock Traceability isn’t just for food retailers or those businesses that sell ‘spoilable’ items. Lots of other organisations are now using Traceability – but for some industries, like pharmaceuticals, it’s essential. Stock Traceability is about keeping track of the flow of inventory through your business; where it came from, how much it cost, and where it goes. It involves recording details about your stock and using them to find out about your business, such as how much profit you made on an order from a Supplier.

Starting out, many small businesses don’t trace their stock, and they won’t find this a problem. But when their business grows and they expand to multiple suppliers, larger orders, and attract
several important clients, the need to track their inventory becomes essential. With Stock Traceability, you can identify any issues in your process, becoming a more efficient business.

How can Stock Traceability help me?

Stock Accuracy

When Stock Taking, your Stock Traceability process should include the recording of any item serial numbers (or for small products, the number of items left in a batch, and the batch number). Compare these numbers to your receipts. If there is any discrepancy, such as missing items, you will be able to list the missing serial number so that if it turns up later, you can trace where it came from and perhaps how it became lost in their first place.

Quality Control

With Stock Traceability, you can identify any weaknesses in the quality of your product. If a customer returns an item with a compliant, you can trace the item backward to your Supplier and hold them accountable. This is only possible if you plot out your Supply Chain. This is the ‘journey’ your products undergo – from manufacturer or Supplier to your warehouse or stock room, and finally to your customer or consumer. When paired with Stock Traceability, your Supply Chain will allow you to identify areas of improvement. If you receive several complaints and returns which all come from one Supplier, ask then what are they doing which your other Suppliers aren’t? If they’re missing crucial stages, you can decide how to proceed; asking them to alter their process, or changing Suppliers. Going forwards, your customers will be supplied with quality, and there will be fewer returns. You’ll have happier customers and more profitability.

Batch Traceability

For businesses handling high volumes of small items, like nuts, bolts, and DIY essentials, we encourage using batches. Assign your products a number for the batch as a whole, rather than each individual one, and allows for traceability tracking. If returns occur, the item can be traced to its batch, and to its Supplier.

Warranty & Maintenance

High-value items, like computers or musical instruments, may come with a warranty from the Supplier. If you are a retailer of these items, you may also be offering a warranty on the product. As high-value items often come with their own serial numbers from the manufacturer, it is easy to trace them back to their manufacturer if there is a problem with the item and check if the warranty is still in date. You will also be able to trace the purchase of the item and see if any warranty you have added is still valid.

Understanding your Profitability

Stock Traceability can also help you to understand how much profit you are making from your purchases. Whether you buy your products from a manufacturer, or buy the raw materials and make the items yourself, by assigning a number to your orders, and another to the sales you make, you will be able to trace where your biggest profit comes from. This is especially important when you are purchasing materials or products from multiple Suppliers. Stock Traceability can also give you the ability to record actual profit rather than an estimated or standard.


There are many benefits to using Stock Traceability (and they’ll differ depending on your industry, and your business), but hopefully, you now have a better understanding of what Stock Traceability is and how it can help you and your business. We also have a more in-depth free eBook that you can download that goes into even further detail around working out the profitability of your stock, how to implement a Stock Traceability system and which system may be right for you. You can find out more about our free eBook, ‘Stock Traceability for Small to Medium Businesses’ here.