A leading national retailer, and a longtime customer, asked Pregis to evaluate the potential impact of switching their void-fill packaging from on-demand air pillows to on-demand paper void fill.
What Is Total Cost of Ownership?
Packaging decisions are often made by considering upfront prices alone. In reality, those costs are only one part of the equation.
Total Cost of Ownership (TCO) looks beyond upfront purchase price to understand the full, enterprise-wide impact of a packaging decision across its lifecycle. It captures both direct and indirect costs in the short and long term, including operational efficiency, labor, transportation, environmental impact, damage and customer experience.
Situation
Leadership had to understand how that decision would perform once scaled across high-volume operations and multiple regional fulfillment sites. The team required a structured, objective way to evaluate how the change would affect cost, labor, transportation and operational flow.
Method
Pregis used a Total Cost of Ownership approach to provide the retailer clear, unbiased insights into how the material change would impact the operation at scale.
Step 1: Validate Material Usage Under Real Pack-Out Conditions
At one regional fulfillment center, Pregis and the customer packed the same box sizes using both on-demand inflatable air pillows and on-demand paper void-fill under real operating conditions. By maintaining box-size consistency, the team could account for SKU volume and variability. This approach isolated material usage and provided a like-for-like comparison during the pack-out. The inflated air pillows utilized material more efficiently, taking up more space inside the box. As a result, Pregis found that filling the same box required about 1.2× more paper than air on average.
Step 2: Apply Validated Usage To Annual Volume
The verified usage ratio from the Packaging Value Analysis (PVA) was then applied to one regional fulfillment center’s annual air pillow usage to estimate the equivalent volume of paper that would be required at scale.
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