Purpose As a result of globalization competition in every business has raised. This makes it imperative to show at most attention towards every part of the business process in a detailed manner. The ratio between the cost of the industrial equipment and the cost expended in packaging and repairing the damages incurred in the logistics of the equipment is very little. As a result, in current practice packaging design is not given substantial attention it deserves. Because of this several manufacturing industries incur expensive losses and degradation of their brand value primarily due of inferior packaging practices. Therefore this thesis focuses on importance of packaging in the industries and its relationship with logistics system. Problem This thesis have answered following research questions 1. How does the interaction happen between the packaging system and other systems in a manufacturing industry? 2. What are the steps that can be taken to establish an effective relationship between packaging and logistics? 3. What are the relevant key performance indicators (KPI) which affects the company’s logistics costs in context with packaging? Methodology Facts and data for this paper were gathered from literature reviews of various articles found in international journals and case studies. In addition semi-structured interviews were conducted with representatives at manufacturing industries. Basically systematic approach and qualitative research are the main two methodology followed. The course of this thesis project was executed during the period of five months at M/s. Delaval International AB, an attempt was made to investigate the effectiveness of different types of packaging solutions that can be adopted to improve the current packaging process. Discussions Below four sections where mainly discussed in this thesis 1. Optimizing logistics by better packaging 2. Increase of packaging logistics knowledge and importance in the entire organization 3. Influence of packaging 4. Information flow and exchange between packaging and logistics systems The basic values of the packaging logistics and the interactions between packaging and logistics where also discussed.