The better skilled your aresnal dwarf, the better. Also, in my experience, if a particular soldier likes an item, he may not even wait for the arsenal dwarf to do his job.
I had a miner/maceman that would immediately stop what he was doing to "pickup new equipment" the moment a new fun piece of armor was made. And I mean hot off the presses--he'd come running immediately. he is now completely decked out in fun armor. He will even drop old fun armor for better quality fun armor the moment its available. In his stats, it says he likes adamantine among other metals. None of my other soldiers do that, and in some cases it has been a pain to get them properly equipped.
This... grabbing of armor was before the arsenal dwarf was even aware the armor had been made.
The arsenal dwarf needs organization and book keeping skills. If you appoint someone with neither it may be a very long time before anyone equips the special items you have designated. Your best bet is to have the arsenal dwarf have few if any other tasks, and let me endlessly go through equipment manifests and upgrade squad equipment.
It also may be a good idea to have one dwarf be manager and arsenal dwarf, since the record keeping skills overlap.
I've found that if you leave it set to just metal and mixed, the arsenal dwarf will periodically update what the squads will wear. In my experience, a better quality item will take precedence to a better material item. I have had dwarfs drop a -steel shield- for a *copper shield*. So be careful with what you have laying around, and mercilessly trade away or dump lesser MATERIAL quality items as you can. Keep in mind though a +bronze shield+ is better than a plain steel shield. Usually I do not have to do too much micromanaging unless I want someone to get a specific weapon or fancy jeweled armor piece.