Streamlining for success at Millennium Specialty Alloys

When David Melillo purchased Millennium Specialty Alloys Ltd., a metal retailer in Kelowna, B.C., in 2019, he knew it would involve introducing a lot of change to the 20-year-old business’ people, products, and processes – the key tenets to any successful business. Melillo would never suggest that he has perfected his approach, but instead he would say his approach is evolving. By adapting and applying the key tenets of business for the past four years, his evolving approach has positioned the company to grow and be more profitable.

Right People, Right Product

Melillo actually worked in investment banking in Vancouver prior to purchasing Millennium. But with a growing family, he and his wife decided they wanted to move away from the busy city centre and find a new home in a smaller town like Kelowna.

“I had always wanted to run my own business,” he said. “Working with junior companies and startups for the past 20 years, I’d developed a certain skill set I felt would allow me to successfully operate and grow a business of my own. I wanted to buy a business but wasn’t too concerned about what industry it was in. The only thing I knew was that I wanted a business with tangible assets. I wanted a business that sold a product you could see and touch. When I found Millennium, I saw that it sold a tangible product, had an established customer base, was revenue producing, and profitable; but I also saw things in its operations that I knew I could improve upon.”

The first decision he made was to expand the business’ reach to include selling industrial plastics. Given Millennium’s existing customer base, he felt confident that adding a product line such as industrial plastics had synergies to its existing product line (metals) and further addressed the needs of its customers. But to make this a profitable endeavor, Melillo needed someone in the shop with expertise in both materials—something that up to that time did not exist.

“Luckily I found someone with 30 years of fabricating experience in Kelowna who had a significant amount of experience with both metals and industrial plastics,” he said. “That helped me launch that product line and was a key HR decision.”

Systems Consistencies

The other challenge Melillo faced out of the gate was correcting processes to ensure customers were getting their products on time and filled correctly.

“I saw too many customers coming back saying, ‘This is the wrong material,’ or ‘This was cut wrong,’” he said. “To address this, I created a process that required two people to sign off on every order so that we had proper quality assurance checks on everything leaving the building, thereby ensuring the order was completed properly. In essence, a double check and accountability process was created. If anything did go wrong, I knew who I needed to speak with to work out the issue.”

Part of the struggle with order delivery was warehouse space—there wasn’t enough space to efficiently find materials without moving other materials around. Serendipitously, the warehouse next to the company became vacant, so he took over the lease and removed the separating wall, thereby doubling the company’s warehouse space.

“Previously, it could take 20 minutes to pull a simple order for a customer coming in off the street,” said Melillo. “By expanding, we were able to speed up order processing substantially. We now have space to work more efficiently and safely. We’ve since replaced and repositioned the racking system to further improve our efficiency. Customers have noticed in a positive way the effects of the changes made. Many customers have commented on how much better the warehouse looks and operates compared to how it was run previously.”

Keeping track of stock was similarly challenging. He knew that to better manage the product it sold, a new warehouse software management system was needed.

Although he’d purchased an existing business, Melillo wanted to make it clear that this was a new Millennium, so he pushed a complete rebrand of the business, with a distinctive logo and a presence in person and online. Photo: Millennium Specialty Alloys

“The company previously handled everything in QuickBooks, and I knew if we wanted to grow, we would need software more specifically geared to the metal industry,” he explained. Melillo chose to invest in 4GL Solutions’ Steel Manager III ERP software. “Now we can keep better track of our material such as offcuts, better recognize our product management inefficiencies, and reduce product wastage. This system is a huge step forward to managing Millennium in a more efficient and profitable manner.”

Being Seen

Although he’d purchased an existing business, Melillo wanted to make it clear that this was a new Millennium, so he pushed a complete rebrand of the business, with a distinctive logo and a presence in person and online. This included branding the company’s vehicles and relaunching its website.

“With our black trucks and gold and silver logo, people can recognize us on the road,” he said.

He also hired a marketing firm to help build and manage the company’s website.

“I wanted a site that would offer customers a variety of ways to interact with us. So not only can customers see what we stock, they can ask questions through an online chat system and make product purchases through the website’s e-commerce platform. Through that platform we have expanded our company’s reach. We’ve sold product as far north as Nunavut, as far east as PEI, as far west as Vancouver Island, and everywhere in between.

“In addition, I wanted our customers to visit our website not only to purchase material but also to be informed. To do this, the website also houses our monthly blogs. These are intended to educate our customers on how the material we sell is made, its characteristics, and its applications. Every month we write about a different topic. We also have a monthly newsletter that people can subscribe to, through which we write about the latest industry news, such as commodity price changes and geopolitical issues impacting commodity prices.

“In addition to that, we advertise our latest product specials. More recently, we have started to offer a way of showcasing businesses within our industry to allow them to advertise their services to our subscribers. At this point we have more than 2,500 people signed up for the newsletter.”

Melillo’s efforts to increase brand awareness also included advertisements on the radio, on billboards, and in magazines.

“I wanted to make sure we were visible to the largest audience, and so far, this has been successful.”

HR Hurdles

The biggest challenge for Melillo, like many business owners, is managing people.

“We have seven people on our team, so if you lose one person, that is 15 per cent or more of your workforce,” he said. “That’s a challenge. And finding anyone in this market is challenging. More recently, it has taken me three months to fill one position even though I hired a recruiter and was advertising on the radio, company website, newsletter, and our Facebook page.”

For Melillo, just determining the right approach to management was an initial challenge.

“Originally, I had my office upstairs from the main shop, which meant that whenever I came down to the warehouse floor or called someone up, there was a feeling among employees like, ‘Uh oh, what did I do wrong?’ I wasn’t connected to the employees enough. When I moved my office down to the main floor and worked alongside my employees, that dynamic dramatically changed.

“Part of being a business owner is not so much managing people and selling a product, it is also about learning for yourself through trial and error what works and what doesn’t.” he explained. “Learning to adapt and not be complacent is important.”

Figuring out ways to help his team and also the business was important as well.

“I use a call recording service to get a better idea of how our customer service is handled,” he said. “Training the team to say good morning/afternoon, the company name, and their name whenever they answered the phone is one of the more basic things we’ve worked through. Automatically, the person on the phone knows who you are and how you can help them. Beyond that, it’s a matter of being ready to adapt to the caller. For instance, if we don’t have the specific material they need, perhaps there is something else we do have that would suit. If you are used to simply taking orders, it’s easy to forget that you are also someone who is there to help the person on the line however you can.”

As much as Melillo hopes to build those skills in his team, he’s also aware that supporting them personally goes a long way. In that interest, he provides his team with a work boot allowance as well as an education allowance for any courses they want to take, even if it is not industry related.

“You really have to do all you can to keep people once you find the right ones,” he said.

Anyone taking over an ownership or management role will understand that introducing new processes and systems takes time. After four years complicated by the pandemic and supply chain challenges, Melillo feels he’s in a stable position to see growth in his business by addressing people, product, and process.

Editor Robert Colman can be reached at rcolman@canadianfabweld.com.

Millennium Specialty Alloys Ltd., millenniumalloys.ca