Traceability is bought before it is needed

What you are buying is a boundary

A customer reports a defect. Either you can say it affects three batches dispatched to five customers in a known fortnight, or you cannot, in which case it potentially affects everything you have shipped.

The cost difference between those two answers is the entire value of the record, and it is generally an order of magnitude.

Five links, and it fails at the weakest

1. Incoming material batch, supplier and date, captured at goods receipt.
2. Which material batches were issued to which production batch.
3. Process parameters where they bear on quality and are being checked anyway.
4. Quality results against the batch, including the passes. A record of only the failures proves nothing about the rest.
5. Where each finished batch went, and to whom.

A chain with four solid links and one gap is not four-fifths traceable. It is broken at that point, and most broken chains break at link two, because issuing material to production is the step with the least natural paperwork.

If you are in a regulated sector

Pharmaceutical, food and several export sectors carry specific obligations that go well past general good practice: batch manufacturing records, retention samples, defined recall procedures, and in some cases formal validation of the systems themselves.

Validation is a process performed on your installation, against your product category and your market. No software is compliant on its own, and any vendor implying otherwise is worth treating with suspicion. Scope it against your actual obligations.