This paper presents a design theory for real-time traceability system, which is derived from the chaos theory and from two case studies. We present a design method for supply chain analysis and several design principles for real-time traceability system design. Theoretically, the proposed design theory reveals the design and development process of real-time data capture systems and illustrates a methodology to analyze complex and random behaviors in supply chains. Practically, the design theory provides a robust guideline for practitioners in developing real-time traceability systems to enhance organizational performance. Further, the class of design principles discussed in this paper serves the additional function of explaining the way to incorporate real-time data capture functions in commonly used supply chain systems.