7th Party in logistic management

7PL is being used to describe a turnkey solution where instead of

dealing with several people for various services like inbound,
outbound and warehousing, The concept is ‘one contract, one bill’.
7PL is the combination of 3PL and 4PL into one (3PL + 4PL =
7PL). One logistics service provider provides a client with both
3PL and 4PL services under one roof. 7PL is referred to as a
turnkey solution where instead of dealing with several people for
various logistics services like inbound, outbound and warehousing,
clients deal with one person under the ‘one contract, one bill’
concept.The concept of 7PL stems from the very simple notion of
amalgamating the well-established 3PL domain with the concept of
4PL, originally coined and trademarked by Accenture. Its
representation does NOT connote the over-complication of the
Supply chain with 7 other intermediary levels or seconded entities.
In fact, 7PL serves to optimize and rationalize the new economy
Supply chain partners. In the simplest manner of comprehension
for 7PL, it is the effective fusion of physical and process expertise
of 3PLs, with the enhanced knowledge-based macro-strategic
consulting and IT capabilities of 4PLs. 7PL essentially materializes
the long-standing need for a comprehensive and holistic approach
to the fulfillment of the most intricate and complex Supply chain
requirements for the entire spectrum of logistics. Many debates
have risen on the roles and capabilities of the different players in
the industry, largely because of disparate definitions of scope and
varying degrees of depth of expertise. When competition
intensified, globalization reached the peak and world looked so flat
that the services provided by 3PLs seemed just not enough. This
created an opportunity for the rise of 4PLs, a non asset based
service provider assists companies by integrating resources,
capabilities and technology of its own and coordinate with various
3PLs (Transportation, warehousing, air freight, shipping, customs
clearing etc) along with load planning, tracking, shipment
consolidating, carrier performance management, billing and
payments etc. 4PL provides a comprehensive supply chain solution
in package that in turn helps companies manage complexity and
time as well.

More so, the complexities and permutations of the new global

economic framework has not only created numerous niche silos of
specialized logistics segments, it has also created a vacuum for a truly
scaleable and optimal Supplychain partnership integrating the various
relationships into a web of synchronized, and streamlined networks of
intelligent and collaborative organic Supplychains. This is also partly
caused by the multiple platforms of technological disparity with all
the entities in the Supply chain equation, which complicates matters
with the need for further intermediation. Hence, this hybrid we call
7PL is not just about the definitive “playing field”, beyond just
managing Supply chains, but the consolidation and collaboration of
all value-creating segments of knowledge, technology and best-of-
breed disciplines (such as quality management, human capital
enrichment, and entrepreneurial modelling), to truly achieve the
utopian fulfilment of seamlessly integrating the physical, information,
and financial flows in the most optimum manner for all entities.
Difference between 3PL and 4PL: Understanding the role and
competencies of each entity is necessary so as to truly appreciate the
kind of “hyper-value” created by 7PL. Many 3PLs have claimed to
offer integrated or total logistics, but have only succeeded with
showcasing the inability to truly understand or appreciate the
complexity and the competency required, albeit the expertise in real
execution, does enable a 3PL to ‘feel the pulse’ of the Supply chain.
As well, many 4PLs claim to be able to offer a more strategic
management objective, which also raises concerns over live
operational, implementation, and execution expertise, as well as
further inter mediation or dilution of the client from its Supply chain
pulse. However, the proposition of the 4PL brings into question the
viability, and rapid obsolescence of comprehensive supply-chain re-
engineering plans that require at least 1-2 years to deploy, within an
environment that needs to cater to demand dynamics which are ever-
changing within a radically shortened business cycle.