The blind spot in DOA problems: why logistics causes are structurally underestimated
Dead-on-Arrival (DOA) parts seem like a marginal problem at first glance. Only one to two percent of all spare parts arrive defective or damaged. Yet here lies a persistent pitfall: the financial and operational impact of DOAs is many times greater than the numbers suggest. Research conducted by Faes together with the University of Groningen shows that companies lose an average of over four percent of their spare parts turnover due to this problem.
In many organizations, the focus is on product quality and technical errors, while precisely the logistical causes remain structurally out of the picture. Repackaging, transport, storage and handling contribute significantly to DOAs in practice, but are rarely addressed thoroughly. This leads to a blind spot that costs companies unnecessary money and puts customer relations under pressure.
The question is not whether logistics plays a role in DOAs, but why this role is so often underestimated and what measures companies can take to break it.
What do we mean by DOAs?
DOA stands for Dead-on-Arrival: parts or products that turn out to be defective, damaged or unusable immediately upon delivery. These may include electronics that do not work, parts that are damaged in transit or products that show cosmetic damage that makes them unacceptable for use.
According to research, on average one to two percent of all spare parts are affected. That may seem like a small proportion, but the impact is greater than the numbers suggest. Each defective part causes additional costs for repair or replacement, often necessitates emergency transportation and leads to inventory shortages. Moreover, a DOA directly disrupts service processes and can damage customer relationships.
What these figures make especially clear is that DOAs are not occasional anomalies but a structural risk in the supply chain. The challenge lies in making the causes visible so that companies look beyond the quality of the product itself.
Logistics causes in detail
This research shows that logistics plays a much larger role in the occurrence of DOAs than is often assumed. In practice, things often go wrong in operations that take place out of the manufacturer’s sight. Repackaging is one of the biggest culprits: parts that have been carefully packed in a controlled environment are reopened and repackaged further down the chain. Each additional operation increases the risk of damage.
Transportation and storage are also critical times. Parts often travel long distances through different carriers and transshipment points, exposing them to shocks, vibrations and changing climatic conditions. Insufficient protection or improperly chosen packaging materials then quickly lead to damage. In addition, improper storage conditions, such as high humidity or stacking errors in the warehouse, can also cause DOAs.
Small interventions, big effect
The study shows that relatively small process adjustments can already have a big effect. In one of the cases studied, the DOA rate dropped from 1.3 percent to 0.9 percent after the logistics processes and packaging were modified. This seems like a limited improvement on paper, but in practice it means hundreds fewer defective parts, significantly lower replacement and transportation costs, and a direct improvement in customer satisfaction.
The adjustments mainly involved two points. First, repacking was drastically reduced. Whereas parts were previously unpacked and repacked several times by different parties, a strict no-repack policy was introduced. This greatly reduced the number of times damage could occur. Second, the packaging design was simplified and made more robust. Better protection and fewer loose parts within the packaging reduced the likelihood of shock and pressure damage.
The result was not only a lower percentage of DOAs, but also a more stable logistics process. Fewer urgent shipments were needed, inventories could be managed more tightly, and the service organization got a better grip on reliability towards the customer. This case shows that logistics is not a prerequisite, but a determining factor for product quality on arrival.
Why logistics is often left out of the picture
Although the research makes it clear that logistics processes have a major impact on the occurrence of DOAs, these causes are structurally underestimated in many organizations. A major reason for this is that responsibility for logistics is often fragmented. Manufacturers focus on product quality, while transportation and storage are usually in the hands of external parties such as distributors and logistics service providers. As a result, damage that occurs en route is not always made visible or allocated correctly.
A second factor is the lack of reliable data. In many registration systems, a large proportion of DOAs are classified as “unknown cause.” Without a clear link between damage, packaging type and logistical route, there is no insight into where things go wrong. This automatically shifts attention to product quality, because it is measurable and internally verifiable.
Finally, perception plays a role. Logistics is often seen as a support function, not a strategic part of quality assurance. As a result, the subject ends up lower on the management agenda. Only when the costs of emergency shipments, inventory shortages and customer claims become visible does the realization dawn that logistics is more than just moving parts.
Consequences of underestimation
Structural underestimation of logistics causes direct and measurable consequences. Financially, the costs add up quickly. The study shows that the total cost of a DOA can be more than double the value of the part itself. This is because in addition to the damage to the product, costs for repair, emergency transportation and additional inventory pressure come into play. Companies that do not separately identify these costs often do not see until late that DOAs are a structural drain on their margins.
Operationally, every DOA leads to extra work and disruption. Service organizations are forced to switch to emergency deliveries to still serve customers. This increases pressure on logistics departments and causes inefficiencies in inventory management. When this happens regularly, it creates a pattern of firefighting rather than stable litigation.
Strategically, ignoring logistics causes has perhaps the greatest impact. Every defective delivery erodes customer confidence. Especially in industries where uptime and reliability are crucial, this can lead to reputational damage and long-term customer loss. Companies that continue to view logistics as an afterthought thereby risk not only higher costs but also a structurally weaker market position.
The solution: logistics centric
The solution starts with recognizing that logistics is a strategic factor in reducing DOAs. That requires more than just better product quality; it involves redesigning processes throughout the chain. This research shows that relatively simple measures are already making a big difference.
A first step is to implement a strict no-repack policy. Every time a part is repacked, the risk of damage increases. Providing packaging with clear seals and making arrangements with logistics partners can greatly reduce this risk. In addition, improving packaging designs is essential. Robust materials, shock-absorbing interiors and avoiding redundant components provide greater stability during transport and storage.
Data also plays a crucial role. Systematically recording where and when damage occurs provides insight into the weak links in the chain. The use of telemetry, such as shock and tilt indicators, makes it possible to determine objectively whether damage has occurred during transport or handling. This allows companies to implement targeted improvements and make contractual agreements with their logistics service providers.
Finally, it calls for a shift in performance indicators. Instead of just measuring the percentage of DOAs, it is more effective to focus on the total cost of DOAs as a percentage of revenue. This gives a more realistic picture of the impact and helps to better prioritize improvement measures.
Faes’ role as a 4PP partner
Within the issue of DOAs, the key often lies in logistics, precisely where causes remain invisible or fragmented. As an independent 4PP, Faes takes control of the entire packaging chain. That means we look not only at packaging and materials, but at all links in the chain: from design and production to transport, storage, handling and return flows.
Our approach goes beyond incident mitigation. We systematically perform root cause analyses to determine where in the chain DOAs occur and why. With these insights, we actively steer for improvements, for example by completely eliminating repackaging, introducing more robust packaging concepts or holding logistics service providers accountable for their performance.
Because Faes operates independently, we can objectively select the best solutions and partners, always in the interest of the customer. By taking control of the entire chain and continuously feeding improvements with data and root cause analyses, we make logistics not a blind spot but a powerful tool to structurally reduce DOAs and increase reliability towards the customer.
Logistics as key to fewer DOAs
DOAs are not exceptions, but a structural risk that can cost companies millions annually. The study shows that logistical causes play a much larger role than is often thought. Repackaging, transport and storage are not just preconditions, but determining factors for product quality on arrival.
As long as logistics remains out of the picture, costs continue to pile up in the form of rush shipments, inefficient inventories and damaged customer relationships. The solution lies in putting logistics front and center, implementing clear processes and driving data and root cause analysis.
As an independent 4PP, Faes takes control of the entire chain. In this way, we make logistics transparent, prevent causes from remaining invisible and focus on structural improvements. Thus logistics changes from a blind spot into a strategic lever that not only reduces DOAs, but also strengthens margins and reinforces customer relations.
The message is clear: Those who continue to underestimate logistics continue to pay. Those who put logistics first gain security, efficiency and confidence.