Does Custom Packaging Reduce Your Total Cost?

A lower packaging price can disappear quickly if the package takes longer to load, needs extra cushioning, or lets parts move in transit. Custom packaging can reduce those costs, but tooling and minimum quantities can also make it the more expensive choice. Compare the complete job before deciding.

Start with the packaging you use today

Record the container, insert, closures, labels, cushioning, and outer carton used for one shipment. Then time the actual packing and unpacking steps. Include the work that is easy to overlook: cutting filler, counting accessories, correcting orientation, and repacking a package that will not close properly.

Keep documented damage and rework costs separate from estimates. If the cause of a failure has not been established, do not count its full value as a saving that new packaging will deliver.

Compare costs on the same basis

Cost What to include
Initial work Design, tooling, samples, and qualification
Each package Container, insert, closures, labels, and required outer protection
Handling Measured packing and unpacking time at your labor rate
Transportation Packed dimensions, weight, and any return shipping
Inventory Purchase quantity, storage space, and risk of an obsolete design
Losses Damage, rework, or replacement costs supported by your records

Use the same shipment quantity and protection requirements for every option. Comparing a bare tray with a complete box-and-insert system gives an incomplete answer.

Work out whether tooling pays back

For a simple comparison, divide the additional one-time cost by the expected saving per completed package. That gives a preliminary break-even quantity. It is useful only when both options meet the same requirements and the saving is positive.

As an illustration, $600 of additional tooling divided by a verified $0.40 saving per package gives 1,500 packages. These are example numbers, not Malaster prices. If the component is likely to change before that volume is reached, the tooling may never pay back. Freight, financing, and inventory changes also need to be included when they differ between options.

Look for a smaller change first

A stock enclosure with a fitted insert may remove several manual packing steps. An existing tube profile may avoid tooling altogether. A better closure or a correctly sized carton may solve the problem without changing the device carrier.

Reuse needs a separate calculation. Count return freight, inspection, cleaning where permitted, missing containers, and replacement of worn parts. Use the number of trips you can support with evidence. A package described as reusable does not guarantee a particular service life.

Check the savings with a trial

Have the people who do the work pack a representative batch. Record the time, fit problems, material use, and unpacking steps. Check whether the proposed package still needs the shielding, cushioning, or outer carton used in the original arrangement. Removing required protection is not a cost saving.

Keep the trial results with the approved drawing and quotation. They give purchasing and production a common basis for choosing between stock, modified, and fully custom packaging.

Read when custom packaging is needed and how quantity and tooling affect small orders, or request a packaging review.

Mike Cordingley, The Malaster Company

About the Author

Mike Cordingley

President & Owner, The Malaster Company, Inc.

Santa Clara, California

Mike Cordingley has worked in semiconductor and electronics packaging since 1995. As President of The Malaster Company, Inc., he oversees ESD packaging solutions, including IC shipping tubes, thermoformed trays, wafer protection, conductive packaging, and custom component-handling systems.