Argos’ supply chain director Steve Melton joined the company at a time of major change – the business, having doubled in size, was massivley expanding customer choice in its ranges, adding 35 new stores a year, developing its multi-channel retail offer, and rapidly growing the amount of product imported from overseas.
“It was clear the supply chain of the past needed to be transformed to service the new business needs, and a great deal of change was already underway,” says Melton. “In the time I have been here, we have doubled the size of our distribution network, including the construction of a state-of-the-art automated Direct Import Centre at Barton-under–Needwood in Staffordshire. This facility uses automation to reduce the amount of manual handling involved in our growing direct import activity and ensures a reliable flow of product through to the Argos RDC network. It is also an NDC for small items which are picked as store orders using automated product-to-man technology and cross-docked through the network direct to stores.”
When Melton began his career he did not have logistics in mind. He studied engineering and began designing, building and running factories, discovering that what he “really enjoyed” was managing change, the challenge of understanding how people, processes and technologies can work together to make a difference to a business’ performance. “Supply chain management was still a relatively new discipline when I started working for Unilever and most of us joined from other professions. Like many others, I was attracted by the huge opportunities in FMCG businesses to enhance customer service and improve the bottom line through development of world class supply chain capabilities.”
The opportunity for challenge came early with a move to Italy. He underwent two weeks of intensive tuition in Italian before managing a production unit outside Milan where no one spoke English. “Within a few months I was leading union negotiations in a highly charged change environment as we integrated three sites into one following an acquisition.
Learning Italian on the job was not without pitfalls however, as Melton recalls: “I was assigned an experienced member of the production team to help me get to know the workers on the production lines and to pick up the language. I later realised how colourful his use of the local vernacular was when the Board fell about laughing during my first presentation. It turned out that the term I used for the bottom discharge valve on a process plant was also a crude reference to a piece of human anatomy! Lesson – always check your dictionary.”
Another overseas assignment saw Melton lead a supply chain team putting together a joint venture in Shanghai to launch Signal toothpaste in China in the early ’90s. “Our partner had a 30% market share in China and produced over one billion tubes of toothpaste a year. We had to build and commission a state-of-the-art hygienic processing plant within a 1930s detergents factory in central Shanghai, train the teams, source the materials, develop the product formulation, through to launch.” It gave me a great cultural insight into the entrepreneurial spirit and ambition of the Chinese”
Having sampled the retail sector with Asda, Melton turned his attention to manufacturing, this time with brewer Scottish Courage, the UK beer division of Scottish & Newcastle. “The beer industry was going through massive change as retailers were consolidating into large chains and customers drinking habits changed. The business embarked on a level of change unprecedented in its history which really challenged its heritage and culture at all levels.
“Supply chain change was key to this programme and involved bringing together planning and distribution into a national organisation for the first time, rationalisation of the distribution network, changes to ways of working, and synchronisation of the production sites with demand to reduce stockholdings. Underpinning all this was a 12-month SAP R3 implementation and the first major implementation of SAPs Advanced Planning and Optimisation tool (APO).
“Getting the unions on side was pivotal to the change and a year was spent constructing an umbrella agreement with the TGWU to modernise the ways of working. It reinforced my belief that if you engage people in understanding the reasons for change and work with them to manage the impact in the most humane way possible, then even the most daunting challenges can be tackled. It helped to shape my views on how best to work in partnership with employees and unions that are reflected in the relationships we have built over the past few years with these stakeholders in Argos.”
Comparing working at Argos with his previous experiences, Melton believes that clarity of purpose is a key. Melton concludes: “The key to it in Argos is that we make sure we face up to the things we could have done better at each step and incorporate the learning as we go forward. The culture is restless and we are always convinced that we can improve our performance no matter how good it appears to be.
CV
2002 Became supply chain director at Argos.
1998 Appointed supply chain director at Scottish Courage.
1996 Joined Asda as general manager, non-food supply chain.
1995 Became planning and logistics manager for Elida Faberge UK
1993 Appointed Europeanisation project manager at Elida Faberge UK.
1991 Was technology
manager at PP Co-ordination, Unilever London.
1988 Operations manager for Unilever Personal Products Group Italy.
1986 Appointed process development engineer at Elida Faberge UK.
1985 Was a Unilever
management trainee.
