A system and method for tracking and tracing items that in one aspect comprises generating a group of unique codes, where a unique code is a unique encrypted reference, transferring the group of unique codes to an item marking location, marking items with the unique codes. Further, for tracking the items, decrypting the unique codes of a marked item to obtain the unique reference, and creating and storing the tracking records in a unique storage location, where the unique reference refers to the unique storage location. A tree structure resembling the packaging hierarchy is disclosed, where the nodes are referenced by the unique reference, and tracing of entire sub-trees may be performed by entering a unique code. Storage locations and sub-trees may be assigned to tracking cells in a distributed system architecture.