A system for packaging medical instruments for sterilization, comprising: an input for receiving instrument identification data; an instrument processor coupled to the input, the instrument processor including a database and an instrument analyzer, wherein the database is configured to store instrument type data, instrument packaging data and package labeling data, wherein the instrument analyzer is configured to identify an individual instrument based on the received instrument identification data and to determine the individual instrument packaging type based on the identified instrument, and to determine a labeling associated with the identified instrument using data stored in the database, wherein the instrument analyzer is further configured to determine instrument handling instructions, packaging instructions, and labeling instructions based on the determined instrument packaging type; and an output coupled to the instrument processor, wherein the output is configured for sending the handling instructions, packaging instructions, and labeling instructions to at least one external device, whereby the at least one external device includes a packager configured to, for each individually identified instrument, automatically customize a variably sized package cut from bulk packaging material based on the received instrument identification data for the identified instrument, in response to packaging instructions received from the instrument processor, such that a plurality of variably sized packages are automatically produced. an input for receiving instrument identification data; an instrument processor coupled to the input, the instrument processor including a database and an instrument analyzer, wherein the database is configured to store instrument type data, instrument packaging data and package labeling data, wherein the instrument analyzer is configured to identify an individual instrument based on the received instrument identification data and to determine the individual instrument packaging type based on the identified instrument, and to determine a labeling associated with the identified instrument using data stored in the database, wherein the instrument analyzer is further configured to determine instrument handling instructions, packaging instructions, and labeling instructions based on the determined instrument packaging type; and wherein the database is configured to store instrument type data, instrument packaging data and package labeling data, wherein the instrument analyzer is configured to identify an individual instrument based on the received instrument identification data and to determine the individual instrument packaging type based on the identified instrument, and to determine a labeling associated with the identified instrument using data stored in the database, wherein the instrument analyzer is further configured to determine instrument handling instructions, packaging instructions, and labeling instructions based on the determined instrument packaging type; and an output coupled to the instrument processor, wherein the output is configured for sending the handling instructions, packaging instructions, and labeling instructions to at least one external device, whereby the at least one external device includes a packager configured to, for each individually identified instrument, automatically customize a variably sized package cut from bulk packaging material based on the received instrument identification data for the identified instrument, in response to packaging instructions received from the instrument processor, such that a plurality of variably sized packages are automatically produced.