Packaging Material Consumption

This topic is part of the SG Systems Global packaging, yield and shop-floor data glossary.

Updated December 2025 • Packaging BOM, Yield, Waste, Legal Metrology, MES/WMS Integration • Food & Beverage, CPG, Personal Care, Household, Supplements

Packaging material consumption recording is the way you turn cartons, films, labels, trays, pallets and inserts from “boxes that seem to disappear” into accurate, traceable data in ERP, WMS and MES. It’s where the theoretical Packaging Bill of Materials (CPG-Specific BOM) meets the messy reality of line stops, scrap, roll changes, rework and over-wrap. If you don’t record packaging consumption properly, your yield calculations, costings, sustainability metrics and “where did the money go?” conversations are all guesswork.

“If the only way to explain the packaging spend is ‘we must have had a lot of waste’, you don’t have cost control – you have a shrug with an invoice attached.”

1) What Packaging Material Consumption Recording Actually Does

At its simplest, packaging consumption recording answers two questions:

• How much of each packaging component did we plan to use for this batch or order?
• How much did we actually use, including scrap, rework and re-labelling?

To do that, the system must:

• Know which components are required (via the packaging BOM and target case/pallet patterns).
• Capture issues/consumption from stores to line (picks, movements, line-load events).
• Capture returns and scrap (damaged packs, roll ends, misprints, over-wrap waste).
• Post back actual usage and losses into ERP for costing and inventory.

It’s the packaging analogue of materials consumption recording for ingredients and bulk. If one is tight and the other is hand-wavy, your yield and COPQ picture is always incomplete.

2) Why Packaging Consumption Matters More Than People Admit

Packaging is often the second or third largest cost component in CPG after raw materials and labour – and a major driver of retailer perception and sustainability metrics. Poor consumption recording hurts you in several ways:

• Costing & margins: Standard costs become fiction; you can’t see which SKUs or plants are bleeding margin on packaging.
• Inventory accuracy: On-hand stock in ERP/WMS drifts from reality, causing expedites, emergency orders and write-offs.
• Waste & sustainability: You can’t credibly claim “X% less plastic” if you don’t know how much plastic you actually used and scrapped.
• Root cause analysis: You can’t tie defects, changeovers or line speed decisions to actual packaging usage and losses.

“We spend too much on packaging” is not a useful statement. “We spend 12% above standard on SKU A at Plant 1 due to re-labelling and changeover waste” is – and you only get that level of detail with real consumption data.

3) Relationship to the Packaging BOM and GTIN Hierarchy

The CPG-specific packaging BOM defines the theoretical structure: how many bottles, caps, labels, cartons, trays, films and pallets are needed per finished unit, case or pallet. Consumption recording compares actual usage against that expectation:

• Per GTIN and pack-size family.
• Per line and per changeover pattern.
• Per market or customer configuration.

When BOMs and consumption data align, you can trust your standards. When they diverge, you know you either have bad master data or an execution problem (e.g. double-labelling, over-wrap, re-boxing). Without good consumption recording, you never really know which one it is – so you argue about assumptions instead of fixing facts.

4) Where Packaging Consumption Actually Happens

To record packaging properly, you have to respect where it’s used and lost in reality, not just where ERP wants to post it. Common touchpoints include:

• Material picks: Cases of cartons, labels, film rolls, pallets and inserts issued from warehouse to line.
• Line loads & changes: Actual use of specific rolls, label reels, pallet stacks, trays and dividers.
• Scrap & rejects: Damaged primary packs, misprinted labels, jammed cartons, checkweigher rejects and rework.
• Re-labelling and repack: Extra labels, cartons and film used in rework & repack activities.

Posting just one back-flushed number per batch – without including scrap, rework and re-labelling – guarantees blind spots. You might hit a theoretical “materials variance” target while quietly burning money in a re-pack cell or during chaotic changeovers that nobody sees in ERP.

5) Backflush vs Actuals – Choosing the Right Model

Most plants sit somewhere between two extremes:

• Pure backflush: ERP assumes consumption strictly per BOM based on reported output; no real-time recording, minimal effort, maximum blind spots.
• Pure actuals: Every case, label or roll is scanned and posted; great visibility, heavy data and process load.

A sensible model is hybrid and risk-based:

• Backflush bulk, low-risk packaging where variance is low and waste is negligible.
• Record actuals (or at least line-level deltas) for cost-heavy or waste-prone items: labels, cartons, films, premium packs, promotional components.
• Always capture scrap and rework usage explicitly for batch yield reconciliation and mass balance.

Choosing one extreme because “it’s easier” almost always means you’re paying for packaging inefficiencies somewhere else and just can’t see them.

6) MES & WMS – Where the Data Should Come From

In modern architectures, packaging consumption recording is mostly a WMS and MES job:

• WMS knows what packaging was picked, where it’s stored and which pallets or locations it was issued to.
• MES knows what was produced, what was scrapped and which components were loaded or consumed on which jobs.
• ERP receives summarised consumption postings per batch/order from MES/WMS rather than guessing.

Hand-keying packaging consumption directly in ERP from a shift summary is a classic source of error and delay. If you already have scanners and line counters, your systems are capable of much better – the question is whether your process and integration design lets them actually do it.

7) Integrating Checkweighers, Case Counts & Pallet Builds

Accurate output data is a prerequisite for meaningful consumption data. That means linking:

• Unit and case counts from fillers, cartoners and case packers.
• Checkweigher outputs and reject counts.
• Pallet builds and SSCC generation (see case, carton & pallet label synchronization (GS1 CPG)).

If your system can’t tell you how many good units and cases were actually produced and shipped, it cannot tell you how well your packaging BOMs match reality. Packaging material consumption recording sits on top of decent pack & ship data; it is not magic dust that can fix missing counts or sloppy line reporting.

8) Scrap, Waste and Rework – Recording the “Unpleasant” Bits

Most of the insight comes from knowing where packaging doesn’t end up in saleable packs. That requires recording:

• Packs rejected at checkweighers, leak test, vision or manual inspection.
• Roll ends and overruns from films, foils and wraps.
• Damaged pallets, collapsed cases, crushed corners – and what was salvageable.
• Extra labels, cartons and films used in rework & repack.

If scrap is just “shrink” at the end of the year, you never learn which lines, SKUs or changeovers are driving it – and you certainly can’t prove to a retailer or auditor that you’re systematically reducing packaging waste. Recording the unpleasant bits is where packaging consumption becomes a quality and sustainability tool, not just an accounting requirement.

9) Inventory Accuracy, MRP and “Phantom” Stock

Bad packaging consumption recording shows up as “phantom” inventory:

• ERP and WMS show pallets of cartons or labels that don’t exist physically.
• Production plans assume that stock is available, only to find empties on the shelf.
• Stock counts consistently write off sizeable packaging quantities with no clear cause.

When consumption is properly recorded, stock checks become confirmation, not correction. MRP plans make sense. The purchasing team can see which packaging items are actually volatile or high-usage and negotiate accordingly. And QA doesn’t get dragged into every stock-take because “maybe scrap wasn’t recorded correctly that month”.

10) Sustainability, ESG and Customer Reporting

Retailers, regulators and consumers increasingly care about packaging footprint. To support that, you need to know:

• How much of each packaging material (plastic, paper, aluminium, glass) you used per SKU and per period.
• How much ended up as waste vs in finished goods.
• How process changes (e.g. cartonization / right-size packing) impact real usage.

You cannot get that from BOMs alone. Actual-consumption data is what allows you to report “X tonnes of plastic saved vs last year” with a straight face – and to withstand scrutiny when customers and regulators ask “show us the numbers behind that claim”. Consumption recording is the plumbing behind ESG stories that aren’t just marketing copy.

11) Co-Packers, 3PLs and External Sites

Packaging is often bought centrally but consumed at multiple internal and external sites. For co-packers and 3PLs, you should be asking:

• How do they record packaging usage, scrap and rework for your SKUs?
• Do they provide you with consumption and waste data at the granularity you need?
• Are their packaging standards and BOMs aligned with yours, or do they “run their own numbers”?
• How does their data feed your ERP/WMS for inventory and costing?

Quality agreements should say more than “co-packer will manage packaging”. Without explicit expectations and data exchange on packaging consumption, you are flying blind on a big chunk of externalised cost and waste.

12) KPIs and Continuous Improvement for Packaging Consumption

Once you record packaging consumption properly, you can track meaningful KPIs, such as:

• Packaging usage vs standard (g/pack, €/pack) per SKU, line and site.
• Scrap and rework rates for key packaging components (labels, cartons, films, pallets).
• Packaging COPQ as part of total cost-of-poor-quality (COPQ).
• Impact of changeovers (especially promo packs) on packaging waste.
• Year-on-year changes in packaging intensity (kg packaging per kg of product shipped).

These metrics feed continuous improvement, investment decisions (e.g. better case packers, labellers, vision systems) and sustainability roadmaps. Without them, you’re just guessing which “packaging optimisation” projects are worth doing – and you’ll find out the hard way which ones weren’t.

13) Common Failure Modes and Red Flags

When packaging consumption recording is weak, the same issues appear everywhere:

• ERP always shows “negative” or nonsensical inventory for some packaging items.
• Annual stock-takes result in large packaging write-offs with no explanation.
• Packing lines complain about “never having the right cartons”, while purchasing insists the numbers say otherwise.
• Packaging BOMs are changed repeatedly to “match reality”, with no underlying process changes.
• Finance and operations argue about whether waste came from “bad changeovers” or “bad standards”, with no data to prove either side.

These are not accounting quirks; they are symptoms of missing links between what moves on the floor and what gets posted in systems. Fixing them always starts with making actual consumption visible, however uncomfortable that reality might be initially.

14) Digitalisation & Industry 4.0 – Packaging in the Historian

In an Industry 4.0 setting, packaging consumption is just another data stream in your manufacturing data historian:

• Scanner events for picks, line loads and returns.
• Roll and reel counters tied to MES jobs.
• Automated links between pack formats, run speeds, reject patterns and packaging waste.
• Dashboards showing packaging performance per SKU, line, shift and site in near real-time.

But – as always – clever dashboards built on bad or missing consumption data just give you inaccurate graphs faster. Solid packaging consumption recording is part of the plumbing for any serious “digital twin” or advanced decision support in CPG; it’s not glamorous, but without it the fancy bits sit on a hollow foundation.

15) FAQ

Q1. Do we need to record packaging consumption at the individual-pack level?
No. For most operations, recording at batch, order or shift level is sufficient, as long as you capture both good output and scrap/rework. The right granularity depends on risk, cost and data volumes. High-cost or high-variance components (e.g. premium cartons, promotional materials) often justify finer granularity than commodity shipper cases or standard pallets.

Q2. Is pure BOM backflushing acceptable for packaging?
It can be for low-risk, low-variance items, but pure backflush across the board nearly always hides significant waste and inventory error. A risk-based hybrid approach – backflush for simple items, actuals or periodic corrections for cost- or waste-heavy components – is more realistic and defensible, especially under audit or when explaining margin drift.

Q3. Where should packaging consumption be recorded – ERP, MES or WMS?
Ideally, consumption events are captured as close to the physical reality as possible (MES/WMS) and then summarised into ERP for costing and inventory. Recording only in ERP via manual entry disconnects postings from what actually happened on the line. MES/WMS are better suited to tracking picks, loads, scrap and rework at the level of detail needed for control and investigation.

Q4. How do we handle shared packaging items across multiple SKUs or sites?
Shared components (e.g. generic shippers or pallets) can still be recorded per job or line, even if they are not SKU-specific. The key is to allocate usage and variance in a way that supports costing and improvement discussions: by product family, line or customer. Master data (BOMs and item masters) should clearly indicate where components are shared and how standards are set, rather than duplicating items per SKU to hide the shared reality.

Q5. Where should we start if packaging consumption is currently “whatever’s in the spreadsheet”?
Start small and focused. Pick one high-volume SKU on a representative line and one or two critical packaging components (e.g. labels and cartons). Map how those components are picked, loaded, used and scrapped today. Introduce simple scan- or counter-based recording at key points, link it into MES/WMS if available, and reconcile against BOM and ERP for a few weeks. Use the gaps you find to refine BOMs, procedures and recording logic, then roll the improved model across more components, SKUs and lines once it’s proving its worth.

Related Reading
• Packaging Structure & Control: Packaging Bill of Materials (CPG-Specific BOM) | Cartonization / Right-Size Packing | Case, Carton & Pallet Label Synchronization (GS1 CPG)
• Yield, Cost & Waste: Materials Consumption Recording | Batch Yield Reconciliation | Mass Balance | Cost of Poor Quality (COPQ)
• Systems & Execution: Warehouse Management System (WMS) | MES – Manufacturing Execution System | Pack & Ship – Compliant Order Fulfilment
• Traceability & Rework: Batch & Lot Traceability for CPG Manufacturing | Rework & Repack Traceability