Daniel Malpica – L’Oréal

Daniel Malpica was inclined to study civil engineering in college. Beer changed his mind.

On a school trip before college, he visited a brewery and was so intrigued by the supply chain that he decided to study industrial engineering at Universidad La Salle in Mexico City.

Daniel Malpica | LATAM Physical Distribution and Custom Director-Supply Chain and Operations

That set the foundation for a 20-year career guiding supply chains, logistics and distribution for companies including L’Oréal and Fujifilm. Now working in Mexico City as physical distribution director with L’Oréal Latin America, Malpica is in his second tenure with the cosmetics and beauty products company. While e-commerce and the COVID-19 pandemic are changing how he goes about his job, his passion for supply chains hasn’t diminished.

“I love keeping track of production systems, logistics, process analysis and their design,” Malpica says. “In addition, it teaches you how to manage them in order to create strategies that lead to better production and service processes.”

Building the links

Malpica says proper supply chain management can resemble spokes on a wheel comprised of suppliers, manufacturers, carriers and warehouses. Depending on the industry and the product, the spokes change—for example, at Fujifilm, a priority was ensuring sensitive gear arrived undamaged.

At L’Oréal, he oversees the entire supply chain, relying on enterprise resource management software to link and track inventory, from when it’s received through order fulfillment, shipping and billing.

He uses warehouse management systems to manage inventory, batch control, stock and how stock is stored, also. He uses labor management software to automate manual tasks, such as picking orders—those are being automated with light indicators and checkweigher systems showing locations and quantities. Data gathered by the software through barcodes and radio frequency identification is used to create real-time updates on inventory.

He uses management system software to track transportation, including trucks, that have left the warehouse or distribution center.

“Generally, these systems work in real time and include product information and specifications, available inventory, customer information, among others,” Malpica says. “This can facilitate reception and dispatch operations by providing information on the products in real time, which can reduce errors and increase the efficiency of operations.”

E-commerce emergence

Though e-commerce was on the rise before the COVID-19 pandemic, it’s since skyrocketed. It grew from 16 percent in 2020 to 19 percent in 2021 as sales reached nearly $27 trillion, according to the United Nations Conference on Trade and Development. A study by the Mexican Association Online Sales showed a 27 percent increase in e-commerce from 2020 to 2021.

Among many other effects, this has required companies to get more warehouse space and improve their distribution networks, Malpica says. It’s also led companies to use third party services and sites for logistics and warehousing, he adds. E-commerce has also changed the balance of the relationship between companies and customers, Malpica says.

“Today’s consumers have more power to direct and affect the way retailers and businesses operate to meet their needs and wants,” he says. “E-commerce incorporating same-day delivery is an option that has become almost necessary for some businesses to satisfy the customer.”

Malpica says it’s important he maintains strong relationships with his suppliers, that he understands trends and is transparent to ensure stability.

“The pandemic has taught us to have a lot of resilience and has shown us that even in operations, remote work is possible at the administrative level,” he says. “The pandemic broke the stereotype by having a flexible way of managing operations while taking extreme care and adherence to the stricter standards of care for the health of each employee.”

Still changing, still the same

Born in Mexico City, Malpica earned his degrees in industrial engineering and management from Universidad La Salle in 2001 and 2003. While in school, he served as an intern at L’Oréal, then joined its operations and logistics department in Mexico City.

In February 2008, Malpica joined Fujifilm Mexico as its operations manager, overseeing the distribution center there. In March 2011, he returned to L’Oreal as distribution director for the company’s Mexican subsidiary (for which he’s also served as director of supply chains). After a stint as customer care director for the company’s Hispanic Zone, in 2018 he took on the task of managing end-to-end operations at the country’s distribution center. He held the role until being promoted to his current position in November 2021.

Throughout his career, Malpica says he’s seen the addition of data and technology tools and says e-commerce needs to be supported with more sustainable practices—ones that L’Oreal is actively implementing.

Known as L’Oreal for the Future, the company’s sustainability program marks a new milestone in accelerating the transformation of its supply chain. Its goal is to reduce the company’s greenhouse gas by 50 percent (compared to 2016 levels) by 2030.

“The supply chain of any production process is the fundamental factor that includes all the parties involved in fulfilling a customer’s request,” Malpica says. “Managing them properly can create strategies that lead to better production and service processes. We really are trying to transform and reinvent how the company transports their goods, and I feel very proud that sustainability is at the heart of all our decisions.”

View this feature in the Vol. III 2022 Edition here.