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Topic: Total Cost of Ownership

Gain Control Over the Total Cost of Industrial Packaging

The purchase price tells only part of the story when it comes to the true cost of industrial packaging. Factors such as lifespan, transport damage, handling, transport volume, maintenance and replacement can also affect the total cost throughout its lifecycle.

On this page, we explain which costs contribute to Total Cost of Ownership, how packaging, transport and usage decisions impact these costs, and what to consider when comparing different packaging solutions.

Why this topic matters

The purchase price is visible, but the real costs only begin there

The price of industrial packaging is easy to compare. But once packaging is in use, additional costs arise from damage, extra handling, return shipments, expedited transport, inventory and internal coordination. These costs are often spread across different departments, making them easy to overlook.

For companies handling fragile, high-value or critical products, these costs can have a significant impact. Packaging decisions affect not only your purchasing budget, but also your logistics, delivery reliability, available capacity and ultimately the total cost of your supply chain.

Damage costs more than a replacement product

When transport damage occurs, you pay for more than just repair or replacement. Return shipping, inspections, additional handling and reshipping can also add to the costs. Research involving three high-tech OEMs showed that the total cost of a DOA incident could reach 135% to 219% of the unit price of the component.

Disruptions trigger additional costs

Packaging that is missing, unsuitable or provides insufficient protection can lead to repackaging, additional inspections or urgent corrective actions. As a result, a packaging issue can quickly affect planning, logistics and staff availability.

Hidden labour costs add up every time

Time spent on quality inspections, supplier coordination, processing returns and resolving issues is rarely recorded as a packaging cost. Yet these activities consume valuable capacity whenever packaging processes are not properly organised.

Without the full picture, you're comparing the wrong numbers

A low unit price means little if packaging generates additional costs during use. Only by considering purchase costs, damage, transport, inventory and process costs together can you get a realistic picture of what a packaging solution truly costs.

Why Faes?

Years of packaging expertise

140

Packaging People with the expertise to solve your packaging challenges

1.000+

B2B customers, including in Defence, High-Tech & Medical

Steps from initial consultation to final solution

Expertise in:

TCO Analysis
Cost per use
Repairs & Service Life
DOA Costs
Logistics Efficiency

Frequently Asked Questions About Total Cost of Ownership for Industrial Packaging

Total Cost of Ownership considers all relevant costs associated with packaging throughout its entire service life. In addition to the purchase price, these may include transport, handling, storage, maintenance, damage, return logistics and replacement. Which costs have the greatest impact depends on the packaging, the product and how it is used within the supply chain.

Want to learn more? Read what TCO means and why it matters when choosing packaging

Want to know which costs are relevant to your packaging process? Discuss your TCO challenges with our packaging experts

Not all packaging costs are directly visible on an invoice. Consider additional quality inspections, rework, return shipments, expedited deliveries, internal coordination and the time employees spend resolving packaging-related issues. Because these costs are often spread across different departments, they can easily be overlooked when only the purchase price is considered.

Want to learn more? Read the whitepaper The Hidden Costs of Packaging

Want to identify costs that currently fall outside your packaging budget? Let our packaging experts help you explore the possibilities

A TCO calculation starts by determining the service life or number of use cycles over which you want to evaluate the packaging. You then include relevant costs such as purchasing, transport, storage, handling, maintenance, repairs and return logistics. For reusable packaging, these costs can be expressed as a cost per use cycle.

The exact costs to include vary depending on the application. Above all, a reliable TCO calculation helps you compare different packaging solutions using the same assumptions.

Want to learn more? Read how to calculate the Total Cost of Ownership of logistics packaging solutions

Want to compare different packaging solutions based on their total costs? Discuss your TCO calculation with our packaging experts

This largely depends on the number of use cycles and the costs incurred during each cycle. Reusable packaging often requires a higher upfront investment, but that investment is spread across multiple uses. At the same time, costs such as return logistics, storage, maintenance, repairs and potential packaging losses must also be considered.

The break-even point therefore differs for every application. A meaningful comparison is only possible when you evaluate the total costs of both solutions over the same number of use cycles.

Want to learn more? Read how to determine the break-even point between reusable and single-use packaging

Unsure whether to choose a single-use or reusable solution? Let our packaging experts assess your application

The costs of a damaged product can extend far beyond repair or replacement. Investigations, return transport, additional inspections, expedited deliveries and internal coordination can all generate additional costs. As a result, damage or Dead on Arrival (DOA) incidents can become a significant hidden cost within the Total Cost of Ownership.

Not every DOA incident is caused by packaging. Transport, handling, storage and product characteristics also play a role. However, it is important to consider the risk of damage when packaging decisions can influence that risk.

Want to learn more? Read the whitepaper The Hidden TCO of Packaging

Want to understand how packaging contributes to your damage-related costs and cost of failure? Discuss your packaging challenges with our experts

This theme contains 70 Articles , 2 Keynotes and 2 Whitepapers

Articles (70) Keynotes (2) Whitepapers (2)

Uitgelicht

Whitepapers

The Hidden TCO of Packaging

A DOA incident costing between 135 and 219 percent of the unit price is rarely just bad luck: it is the predictable result of packaging that was evaluated based on purchase price rather than on the consequences of damage. In this white paper, Faes explains why packaging is not a minor expense, but a supply chain issue with a hidden total cost of ownership.

Download whitepaper

Whitepapers

Whitepaper: The Hidden Costs of Packaging

The price on the invoice tells only a small part of the story. In this white paper, you’ll discover how hidden packaging costs arise and how a TCO approach can help you manage risks, failure costs, and process reliability.

Topic: Total Cost of Ownership

Gain Control Over the Total Cost of Industrial Packaging

Why this topic matters

The purchase price is visible, but the real costs only begin there

Why Faes?

Expertise in:

Frequently Asked Questions About Total Cost of Ownership for Industrial Packaging

What does Total Cost of Ownership mean for industrial packaging?

What hidden costs contribute to the Total Cost of Ownership of packaging?

How do you calculate the Total Cost of Ownership of industrial packaging?

When is reusable packaging more cost-effective than single-use packaging?

How do transport damage and DOA incidents affect Total Cost of Ownership?

Uitgelicht

The Hidden TCO of Packaging

Whitepaper: The Hidden Costs of Packaging

All articles

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