Contact

Summary of this article

In practice, DOAs are often treated as technical defects or isolated service issues, while their true financial impact is much broader. In addition to the cost of the defective component, they generate extra transport movements, higher inventory levels, diagnostic work, analyses, preventive actions and management consultations. At the two high-tech companies examined, the total cost per DOA amounted to 185% and 297% of the product’s original value. Indirect costs alone represented between 1.6% and 2.1% of spare-parts revenue.

When DOAs are handled separately by individual departments, these costs remain dispersed throughout the organisation. Logistics arranges urgent shipments and maintains additional inventory worldwide, field service and customer support carry out diagnostics, engineering investigates root causes, and management safeguards customer relationships. The greatest damage, however, occurs at the customer. Downtime, loss of confidence and postponed follow-up orders may have a greater impact than internal recovery costs. The study therefore concludes that reducing DOAs could increase spare-parts profits by up to 30%, with this figure still considered a conservative estimate.

DOAs become more manageable when companies look beyond the packaging itself and address the entire packaging process. According to the study, approximately 60% of DOAs are caused by human error, while 20% to 40% have a logistical origin related to packaging. The greatest gains can therefore be achieved through standardisation, clear work instructions, training and centralised process control. By harmonising the number of packaging solutions and systematically instructing employees, Faes estimates that the number of logistics-related DOAs can be reduced by 50% to 90%. In this way, DOA management shifts from reactive recovery to the structural management of profitability, customer satisfaction and security of supply.
Show full summary »

E-book: here's what tackling DOAs will get you

Dead On Arrival's, products and components that arrive to your customer already damaged. It is not only a major source of annoyance, but also a huge cost and a common cause of reputational damage.

For many manufacturers, addressing DOAs is not yet among their priorities. A missed opportunity, because addressing DOAs can save between 2 and 5% in costs. Depending on your sales, the damage can run into the millions!

Some consequences of DOAs in a row:

  • Direct costs for repair, remanufacturing and (return) transportation.
  • Additional costs for handling the complaint. For example: conversations between sales and the customer, administrative and logistical handling.
  • Claims from customers when you cannot meet the Service Level Agreement (processes, machines and software down as a result).
  • Loss of sales because customers select a different supplier next time.
  • Image damage because your customer shares negative experiences with potential customers.

Dowload the e-book and also increase your profits by addressing DOAs

Prof. Dr. Walther Ploos van Amstel studied with Faes several years ago the costs of Dead on Arrival’s (DOA’s) and what this can mean for your business.

Do you want to finally get DOAs really right? Download the e-book via the button below and read all about it!

Download the e-book here
Print
Email Download PDF
Thijs Canjels

Thijs Canjels

Business Innovation Manager

Thijs Canjels is Business Innovation Manager at Faes and specializes in packaging management and supply chain optimization. In his blogs, he shares insights on efficiency improvements, cost savings and the strategic role of packaging in modern supply chains.

More articles by Thijs Canjels

More about DOA's

What environmental factors cause dead on arrival failures?

Read article

DOAs snatch 30 percent off profits

Read article

Can shock absorbers eliminate Dead-on-arrival deliveries?

Read article

This is how we create the ideal packaging together

Good packaging doesn’t just happen by chance. Using a tried-and-tested approach, our specialists guide you step by step from the initial idea to the finished product.

Contact
1
Intake
During an initial consultation, our packaging experts will identify your specific requirements. By discussing the criteria the packaging must meet, they can work with our engineers to develop a concept.
2
Concept
Is standard packaging an option, or is bespoke packaging required? This decision is made in consultation with the consultants and designers
3
Design
Based on the concept, you will receive a suitable proposal. Thanks to our short lines of communication, we can easily make adjustments whenever necessary. Are you happy with the advice? If so, we’ll work towards producing a prototype.
4
Prototype
Throughout the process, we present concepts digitally and, where necessary, submit 2D drawings for review. You and your project team members can provide feedback or approve them, ensuring that decisions are clearly documented and the review process runs efficiently.
5
Production
Once approval has been given, our skilled craftsmen get to work on producing the packaging. From closures to a fully bespoke interior: we ensure that all your requirements are carefully incorporated into the final solution.
6
Service
We remain involved even after delivery. We are happy to take care of all your packaging needs, so that you can count on our support for maintenance, modifications or more complex issues.