Traceability refers to the completeness of the information about every step in a process chain.
The formal definition: Traceability is ability to chronologically interrelate the uniquely identifiable entities in a way that matters.
The term traceability is for example used to refer to an unbroken chain of measurements relating an instrument's measurements to a known standard. Traceability can be used to certify an instrument's accuracy relative to a known standard.
(In the USA, national standards for weights and measures are maintained by the National Institute of Standards and Technology. As defined by NIST, "Traceability requires the establishment of an unbroken chain of comparisons to stated references.")
In logistics, traceability refers to the capability for tracing goods along the distribution chain on a batch number or series number basis. Traceability is an important aspect for example in the automotive industry, where it makes recalls possible, or in the food industry where it contributes to food safety. See Tracking and tracing.
In materials, traceability refers to the capability to associate a finished part with destructive test results performed on material from the same ingot with the same heat treatment. Destructive tests typically include chemical composition and mechanical strength tests. A heat number is usually marked on the part or raw material which identifies the ingot it came from, and a lot number may identify the group of parts that experienced the same heat treatment. (i.e. were in the same oven at the same time.) Material traceability is important to the aerospace, nuclear, and process industry because they frequently make use of high strength materials that look identical to commercial low strength versions. In these industries, a part made of the wrong material is called "counterfeit," even if the substitution was accidental.
In software development, the term traceability refers to the ability to link the requirements set forth at the beginning of a project, to the corresponding design artefacts, to the resulting software and associated test cases. This allows for efficient change impact analysis.
It is usually accomplished in the form of a matrix created for the Verification and Validation of the project. In transaction processing software, traceability implies use of a unique piece of data (e.g., order date/time or a serialized sequence number) which can be traced through the entire software flow of all relevant application programs. Messages and files at any point in the system can then be audited for correctness and completeness, using the traceability key to find the particular transaction. This is also sometimes referred to as the transaction footprint.