If you work with items and specifically batch items then you are using batch to identify the product. This can then be used to trace where the product came from and where it was sent to if there is an issue with that batch.
The item tracing gives you are consolidated view to search and track the product. You can list suppliers and which customers the product was sold to. As well get a report listing to be able to use as a call list to call customers. This can be handy in situations where you want to notify your trading partners of an issue with product.
Here is a quick overview.
AX2012 R3 CU9.