Logistics, Fulfillment Providers Face Fierce Competition

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GRAPEVINE, TX -- The back-end providers serving the direct marketing industry are enjoying the fruits of the recovering economy but face increasingly stiff competition, both from overseas and each other, members of the industry said yesterday.

Industry members gathered here this week at Gaylord Texan Resort & Convention Center for the National Conference on Operations & Fulfillment. At the bustling show, the main topics of discussion were technology and the ways it can be used to improve efficiency.

Logistics was once solely the domain of midlevel business managers, but today top-level chief executives are becoming involved in decisions about logistics, said David Vannoy, co-founder of Nexxio, Dallas.

"They're being asked to improve service levels while at the same time being asked to reduce costs," he said. "They're looking for innovative ways to do that."

Cutting costs is increasingly difficult as the price of fuel rises. Conference attendees expressed concerns about rising fuel costs.

"Fuel is a factor," said Scott Selby, fulfillment operations manager for WOW Logistics, Appleton, WI. "Our customers rely on us to manage their freight."

Keeping up with logistics technology advances can be a major hurdle for providers, Selby said. He spent much of his time at the show attending seminars on technology, including learning about radio-frequency identification technology that soon will become the standard in inventory tracking.

On the fulfillment end, call centers continue to face competition from overseas outsourcers, said Frank Shooster, co-owner of Global Response, Margate, FL. However, as the inbound industry moves toward automation, manpower advantages offered by overseas outsourcers are becoming less of a factor.

Live manpower will be used to provide services that machines can't, Shooster said. By being called on to handle more complex operations, the call center work force will grow more highly trained and educated in the future.

Scott Hovanyetz covers telemarketing, production and printing and direct response TV marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

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