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CASE STUDY: Pukka Herbs productive future in new warehouse

Go Supply Chain Consulting helped Pukka Herbs double the size of its warehouse and distribution capacity and designed a future-proofed multichannel fulfilment operation. Achieving 30 per cent growth year-on-year, supplier of organic herbal teas and Wellbeing products Pukka Herbs was growing fast. In fact, it was stretching the limits of its 9000 sq. ft of warehouses at Hawkfield Business Park, Bristol.

“We were stuffed to the gills and needed to find somewhere bigger,” said David Anderson, Head of Projects and IT at Pukka Herbs, although, due to the rapid growth, it was more complex than that, as the existing space was split across two warehouses and a third-party facility 15 miles away. Pukka Herbs produces a range of ethically sourced, organic herbal products that are sold in the UK and internationally through supermarkets, wholesale, specialist shops and direct to consumer via online and mail order channels.

Pukka’s range of 40 different herbal teas are available in 41 countries and it’s estimated that 1 million cups of Pukka tea are sipped every day. At the heart of this operation was Pukka’s original warehouse, which received its bulk herbs and finished products, which were then picked and despatched to customers via the company’s multiple channels. In March 2014 Pukka decided to conduct a review to examine its processes and ensure they keep in-line with best practice into the future.

“While we know our business, we didn’t know warehouse designs, so we searched for a company who could help us” said Anderson. This led Pukka to Go Supply Chain Consulting. Pukka engaged the specialist supply chain consultancy to determine its requirements for warehousing over the next 5-8 years and to design an appropriate solution. Understanding Pukka’s existing warehouse operation and reviewing the company’s requirements for the future in-line with its growth plan was GSC’s first step.

Visiting Pukka’s original site in Bristol for the first time, in July 2014, gave Go Supply Chain director Gavin Parnell his first chance to assess the project and to crunch Pukka’s data. “Given the relatively high-level of complexity in the operation it was important to combine data analysis with a good level of client engagement to ensure requirements were fully understood,” he said. The next step was to design the new solution, providing CAD layout drawings, capital equipment and operating cost schedules, and advice on warehouse process improvement.

Parnell said: “We applied growth at SKU level and allocated SKUs to appropriate picking and storage media based on their physical characteristics, rate of movement and stockholding. We then designed the warehouse layout, producing CAD drawings. We combined industry standards with our knowledge gained on the project to produce an operational design tailored to the client’s specific requirements.” These included a small amount of manufacturing that Pukka carried out in the warehouse, bulk herb storage and Pukka’s very busy, fast-paced picking operation. “We needed to satisfy the picking operation in terms of efficient movement for the team, so that we didn’t have a massive group of pickers tripping over each other, which was a problem with the tight space in the existing warehouse,” said Anderson.

“We also needed sufficient space for our business to expand, with the Teas and Well-being ranges between them growing at up to 30 per cent year-on-year for the last ten years. So, we weren’t just thinking of the how much space we needed at the time; we were taking continued growth into account and building for the future.”

GSC advised on elements of the process design, giving Pukka the chance to discuss these elements with their system provider and to incorporate where possible. Strategic options around outsourcing and future product lines were discussed to come to an agreed position on the sizing of the new warehouse; always a tricky issue for very fast-growing companies. Finally, GSC plotted a ‘strategic roadmap’ for the future of the distribution operations as the business continued to grow. The consultancy presented its findings to Pukka at the beginning of September 2014 and with backing from the board, David Anderson’s team and GSC, together implemented the search for a new, bigger warehouse that suited the plan.

This turned out to be a 19,000 sq. ft. facility at Quadrant Industrial Estate in Bristol. The building that expanded Pukka’s capacity to just under 1400 pallet spaces doubling the number of pallet spaces (650) in its original warehouse “It was located the other side of Bristol to the existing warehouse, but the facility was head and shoulders above the rest and will accommodate our planned future growth” said Anderson.

On 18 May 2015, Pukka Herbs’ co-founders Tim Westwell and Sebastian Pole officially opened the new fully operational warehouse. The project however was about more than just the warehouse building, it was also about finding new, best practice, ways to work inside it to maximise efficiency. Pukka’s multichannel operation fulfilled a range of different orders: some very small, some very large. Web customers were generally small orders.

To fulfil these a picker could pick 3-4 orders at the same time using a trolley or tote.“This was something that Gavin worked through with our warehouse manager and was a good example of how we could work more efficiently,” said Anderson. Fulfilment for UK health-food shops and healthy stores, which could be ordering around 100 items, were delivered as a large courier drop or a pallet-drop. Picking for international distributors, which generally involves large orders from the Well-being range, were distributed with multi-pallet drops.

Pukka also had an internal demand where bulk herbs in the warehouse needed to be picked and shipped to the manufacturers of the Well-being range, again these orders could be very large in their size. GSC created a labour model to show what level of resourcing would be required in the improved layout and with new ways of working. “Simply throwing more people at picking is Inefficient” said Anderson. “Thanks to the improved productivity and efficient layout of the new warehouse, we can maintain our headcount without the need to bring in temps for long periods.

Pukka Herbs could look forward to reaping the benefits of the consultancy project. Parnell said: “The project resulted in better productivity and potential to reduce cost per unit, resulting from having a well-designed layout in one building and improved ways of working. As a result of using external logistics consulting expertise, Pukka gained a more structured approach to managing the warehouse and confidence in the warehousing solution as a platform for continued growth.”

Commenting on the decision to work with Go Supply Chain, David Anderson said: “There are a lot of good reasons around value and cost when it comes to choosing a consultancy. However, at Pukka where we see ourselves as different to other businesses, we focus on the ‘fit’ when we first meet people and we felt that Go Supply Chain understood us. It wasn’t just that we ‘clicked’; they have great experience in the field, including the food sector, and brought a lot of expertise with them.

The price worked for us too, making Go Supply Chain the straightforward choice for this project which was conducted with tremendous efficiency. Gavin and the Go Supply Chain team stipulated a plan for us, setting out what they needed from us and what they would deliver. The end result was a significantly more productive, new warehousing operation, which in-turn provided a platform for the continued growth of Pukka Herbs.”