Discover how logistics errors, component quality and service quality together cause the hidden costs of DOAs. This article shows how root cause analysis and smart improvements can make your supply chain more reliable and cost-efficient.
Summary of this article
Dead-on-Arrival (DOA) of service parts is a creeping problem in high-tech supply chains. A part that arrives at the customer damaged, defective or unusable not only causes frustration and delay, but also involves substantial hidden costs. Research conducted by Faes together with the University of Groningen shows that one DOA costs an average of one and a half to more than twice the value of the part itself. The extra costs arise from transportation, lost time of mechanics and higher inventory costs. Those who think DOAs are sporadic incidents underestimate the reality: they occur structurally and have a direct impact on service levels and margins.
In this article, we unravel the three main causes of DOA: logistical errors, defective part quality and inadequate service quality, including the common phenomenon of No Failure Found (NFF). By exposing the roots of the problem, we show where companies can make a difference and how targeted improvements lead to reduced failure costs and increased customer satisfaction.
A significant portion of DOAs originate in logistics. During transportation and storage, parts are at risk of damage, improper handling or loss. Consider insufficient protective packaging, too much variation in packaging methods or improper handling in warehouses and distribution centers. Even a small shock or error in stacking can cause a part to arrive unusable at the customer’s premises.
The study shows that packaging quality and consistency are decisive factors. In one of the cases studied, switching to standardized packaging halved the number of logistically caused DOAs, from 0.46 to 0.22 percent. This shows that it’s not just about the physical strength of a package, but also uniformity in design and application. When every shipment is packed and handled according to the same guidelines, the likelihood of errors decreases significantly.
The implication is clear: Companies looking to structurally reduce their DOA rate must take a critical look at the role of packaging and handling within their supply chain. A robust packaging design, complemented by clear processes and training for involved employees, lays the foundation for more reliable deliveries and lower failure costs.
Not all DOAs are the result of transportation or packaging. Sometimes the cause is the quality of the part itself. Production errors, material defects or incomplete quality controls cause parts to enter the supply chain when they are already inadequate. The problem is compounded by Type II inspection errors: parts that are incorrectly classified as approved upon inspection.
The study shows that defective parts create a heavy cost burden. When a part proves unusable immediately after delivery, repair attempts or return flows often follow that end up being just as or even more expensive than immediate depreciation. This places an additional burden on the logistics chain and the technician on site loses valuable time, while the customer has to wait longer for a solution.
The lesson is that part quality is not solely a matter of production, but of chain-wide assurance. Stricter inbound and outbound controls, additional testing moments and feedback loops with suppliers reduce the chances of defective parts ever reaching the service chain. This not only reduces the number of DOAs, but also increases the reliability of the entire service.
The third group of causes of DOAs is in the realm of service quality. Not every defective part is actually defective. Often after investigation, it turns out that the part delivered was technically sound, but was registered as DOA due to errors in the service chain. This is referred to as No Failure Found (NFF).
NFFs occur due to improper installation, misdiagnoses by Field Service Engineers or unclear communication in administrative handling. The result is that a good part is returned wrongly or even written off, with all the costs of additional transportation, lost mechanics’ hours and inventory disruptions.
The study shows that these human and process factors explain a significant portion of DOA cases. Whereas logistics and part quality often have tangible areas for improvement, service quality requires behavioral and process adjustments. Training of mechanics, clear installation and test instructions and conclusive feedback of findings make the difference. By setting up a consistent feedback loop, an NFF can be quickly recognized and prevent a good part from being unnecessarily pulled out of the chain.
The implication is that reducing DOAs is not just a matter of better packaging or tighter quality controls, but also of investing in the people and processes that work with the parts every day.
Although logistics, part quality and service quality can be distinguished separately as categories, in practice it appears that DOAs are often the result of a combination of factors. Fragile packaging can be damaged during transport, causing cosmetic damage to a part. Upon arrival, the mechanic interprets this as a defect, after which the part is wrongly written off as DOA. Or a part with a minor manufacturing defect is delivered, but poor installation instructions make the problem seem bigger than it really is.
The study shows that it is precisely these chain reactions that pose the greatest challenge. Without clear root-cause analysis, the nuance disappears: every defect is booked as a logistics problem, while in reality the cause lies in production or service quality. As a result, improvement measures are misdirected and structural causes remain in place.
This is exactly where Faes’ role lies. As an independent partner, we don’t look at one link, but at the entire chain. We analyze where the real causes of DOAs lie and feed them back into concrete improvement actions. Our position as a packaging partner allows us to combine packaging solutions with quality assurance and process optimization at service organizations. In this way we ensure that improvement measures are not focused on symptom control, but on structurally reducing failure costs and increasing delivery reliability.
Dead-on-Arrival is not an accidental disruption, but a structural risk in high-tech supply chains. The hidden costs quickly add up to one and a half to more than twice the value of a part and directly affect margins and customer satisfaction. The study shows that the causes are deeply embedded in the chain: in logistics, in component quality and in service processes. Those who want to solve the problem must be willing to examine the entire chain and make the appropriate improvements.
As an independent packaging partner, Faes takes on that role. We look beyond the packaging alone and analyze the entire chain to uncover the real causes. By combining packaging solutions with quality assurance, process optimization and data-driven monitoring, we help organizations structurally reduce DOAs. The result is not only lower failure costs, but above all higher reliability towards the customer.
The message is clear: organizations that invest in structural improvements now will benefit from lower costs, higher service levels and a stronger competitive position. The first step is recognizing that DOA is not an incident, but a pattern you can break. Faes is ready to work with you to achieve that breakthrough.
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.
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