More Room for Pasta: How Kaizen Food Co. Took 3PL Audits Off Their Plate

Partnering with the 3PL-Evate was a game-changer for Kaizen Food Company...Thanks to their expertise, we can now focus more on growing our business and less on fulfillment issues. I highly recommend 3PL-Evate's services to any ecommerce company looking to streamline their operations in support of sustainable growth.

- Madalina Defta, Co-founder and CEO of Kaizen Food Company

Background

Kaizen Food Company was born out of a gap in the marketplace. Madalina Defta, CEO of Kaizen Food Company, and her co-founder were interested in healthier alternatives to some of their favorite foods, particularly pasta. When the available options either weren’t healthier or failed to match the taste and quality of the original, they decided to create their own products. After countless iterations, the co-founders developed a revolutionary pasta using the Lupini bean, which boasts significantly fewer carbs and triple the protein content of traditional pasta. This innovation allows health-conscious individuals to enjoy delicious pasta without compromising their nutritional goals.

Challenges and Audit Service Intervention

As Kaizen Food Company scaled, new challenges emerged. After months of packaging orders in her basement, Madalina outsourced fulfillment to a Third-Party Logistics (3PL) provider, allowing her to focus on business growth. After some time, she began noticing unexpected overcharges on fulfillment invoices, and then came the customer complaints. The oversized boxes often left so much room that the pasta boxes would get crushed during transit, detracting from the premium experience Kaizen sought to deliver. This highlighted the need for a thorough review of their fulfillment processes.

Audit Findings and Actions

Our audit revealed a higher-than-expected frequency of inefficient package assignment, with about one-third of orders fulfilled using oversized packages. This raised important questions about the underlying product records as maintained by Kaizen’s 3PL.

Kaizen’s product line includes pasta in standard-sized cardboard boxes and rice and flour in soft plastic packages. Discrepancies were identified between the product dimensions provided by Kaizen and those recorded by the 3PL. Presenting this data to the 3PL led to a successful adjustment of the recorded dimensions. The impact of these changes was immediate. Looking at the example below we can see how four units of pasta were occupying 41% of a 12x9x5 box. However, after 3PL-Evate’s review, these same four units now ship in a 10x8x3 box and occupy 93% of that box.

Given the significant financial implications and the risk of customer churn caused by the 3PL’s previous approach, Madalina requested that financial compensation for these errors extend beyond the audit period. While the 3PL was initially bound by policy constraints, Kaizen's rapid growth and the 3PL’s commitment to customer satisfaction facilitated a successful negotiation. A one-time courtesy credit, approximately three times the amount overcharged during the initial audit, was secured.

Results and Impact

Collaborating closely with their 3PL, we ensured their package assignment process was updated to reflect optimized packaging. 3PL-Evate continues to monitor Kaizen’s fulfillment activity and we are pleased to note a dramatic reduction in the frequency of sub-optimal package assignments from approximately 30% initially to less than 5% today. This optimization has resulted in lower fulfillment costs, reduced working capital tied up with the 3PL, and more resources for Kaizen to focus on growth.

Conclusion

This case study highlights the significant benefits of a detailed audit service. By identifying and addressing inefficiencies, the audit service not only recovered substantial funds for Kaizen Food Company but also streamlined their operations by removing fulfillment review from Madalina’s plate.

Partnering with the 3PL-Evate was a game-changer for Kaizen Food Company. Their thorough review of our fulfillment processes revealed critical inefficiencies and helped us secure substantial cost savings. The optimization of our packaging process not only reduced our expenses but also improved customer satisfaction by ensuring our products arrived in perfect condition. Thanks to their expertise, we can now focus more on growing our business and less on fulfillment issues. I highly recommend 3PL-Evate's services to any ecommerce company looking to streamline their operations in support of sustainable growth.

- Madalina Defta, Co-founder and CEO of Kaizen Food Company