TEAM LIONS
      SANTANU DAS       -   9886026943
    VIKAS KUMAR V.N.    -   9844808690
 VIJAY KUMAR H. SAVLA   -   93420...
KANBAN FOR PRODUCTION CONSUMABLES

                                1. ABSTRACT

         This research report is based upo...
KANBAN FOR PRODUCTION CONSUMABLES

                                  2. INTRODUCTION

       The principle of just-in-time...
3. LITERATURE REVIEW

       Goodrich aerospace limited, a major parts supplier to Boeing and Airbus has been

facing cert...
Kanban facilitates an even flow of production through the different stages of the

process reducing work in progress. A ty...
Investigation of Personnel Issues Affecting Kanban Performance: A Case Study”

Engineering Management Journal Vol. 15 No. ...
minimum performance levels. Given a desired performance level, such as a minimum

average fill rate or maximum average wit...
vendor supply times. When these conditions exist, a buffer of inventory is necessary to

smooth production flow in the sho...
4. PROBLEM DEFINITION

  “Due to the increased size of consumables there is increased storage area,

                     ...
Kanban card is freed from the workstation's product and the previously freed Kanban card

   from the upstream workstation...
6. IMPLEMENTATION

6.1 Setting:

       The setting up of the Kanban process and the necessary arrangements requires

spec...
constantly; and create a culture that promotes, endorses and rewards all of the above - from

management to the shop floor...
6. The driver for the supplier returns the box of parts back to the manufacturing facility

    where it is ready to be de...
7. KANBAN CARD:
       The Kanban card (Figure 3) has been designed according to industry standards. The

following gives ...
8. INVENTORY CONTROL STATUS DASH BOARD

       An inventory control status dash board (figure 4) has been created in MS-Ex...
9. EVALUATION OF THE PILOT PROCESS

               (IMPLEMENTATION OF THE KANBAN SYSTEM)

       Like all systems the Kanb...
11. CONCLUSION


       The study provides a document methodology for practising managers to implement

the Kanban system ...
(FIGURE 1)

KANBAN SHELF FOR STORING CHEMICALS ON THE FLOOR



    BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COUR...
(FIGURE 2)

KANBAN SHELF FOR STORING INVENTORY ON THE FLOOR

    BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE...
(FIGURE 3)

                          KANBAN CARD

BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALO...
(FIGURE 4)

                    STATUS DASH-BOARD

BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALO...
12. REFERENCES



    1. Bruce D. Henderson, “The logic of Kanban”
    2. B.J.Berkley, 1993, “Setting minimum performance ...
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Kanban for productions @goodrich aerospace (live project)

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Kanban for productions @goodrich aerospace (live project)

  1. 1. TEAM LIONS SANTANU DAS - 9886026943 VIKAS KUMAR V.N. - 9844808690 VIJAY KUMAR H. SAVLA - 9342008055 EBIN CHACKO THARAKAN - 9880792039 JAIYER C. D’SOUZA - 9449361429 SAHANA H. - 9743221751
  2. 2. KANBAN FOR PRODUCTION CONSUMABLES 1. ABSTRACT This research report is based upon the inventory management of consumables at Goodrich Aerospace Pvt. Ltd... The process adopted was to implement a Two Bin Card Kanban System along with a Visual Status Dash Board for the management of consumables on a weekly basis as well as help in proper implementation of the 5’S process. The implementation will eventually lead to smooth management of inventory and also reduce the storage of excess stock leading to lower costs and lower storage area. BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  3. 3. KANBAN FOR PRODUCTION CONSUMABLES 2. INTRODUCTION The principle of just-in-time (JIT) is aimed at eliminating all sources of manufacturing waste by getting the right quantity of raw materials and producing the right quantity of products in the right place and at the right time. The heart of the JIT system is the Kanban, a Japanese term for ‘visual record’, which directly or indirectly drives much of the manufacturing organization. Kanban literally stands for ‘card signal’, a tag-like card that communicates production information. The Kanban system is one of the simplest, most effective, and inexpensive means of production and inventory control. The Kanban system has proved to be helpful in reducing inventory, eliminating stock-outs, replacing over use of a computer, slashing overheads, and as an empowering factor thereby improving both service and quality. The introduction of a Kanban system often evokes strong emotional response from both proponents and detractors, and sets a variety of organizational phenomena at work against it. To many production managers, Kanban may only look like a pure production method, having little or nothing to do with the surrounding environment. Instead, the concept takes form on the shop floor, in close interaction between work force and management, and more importantly, involves both internal and external customers. Kanban is not just designing and calculating neither numbers nor a magic bullet, rather it is an organizational shift towards decentralization of various responsibilities to the level of workmen. It involves multi-machine manning/working structure, standard operations, quality control circles, housekeeping, automation (decision by a worker to stop the line), suggestion system, layout improvement and continuous improvement (Kaizen). BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  4. 4. 3. LITERATURE REVIEW Goodrich aerospace limited, a major parts supplier to Boeing and Airbus has been facing certain inconveniences with their inventory system. Due to the lack of significantly less floor space for their consumables, which caused disorganized arrangement of inventory, they wanted to find out the feasibility of using Kanban for their production consumables. Kanban is a card used to indicate the need for inventory replenishment. A system built on Kanban principles is a pull method of keeping production lines optimally stocked with parts and components when they are needed and in the right quantity. As a product is consumed during the production process, an order for depleted inventory is immediately placed, either a Kanban card or electronically through a computerized Kanban program. As this system of consumption driven replenishment proves its applicability across tiers of distribution and supplier networks, it is becoming a compelling alternative to traditional material requirements planning (MRP) for several reasons. One of the most significant is that push-style MRP system rely on forecasts to determine what and how much to replenish. Although forecasts have proven useful in predicting overall demand, they can be poor indicators of exactly which products will be needed and when. (Reference: Narayan Laksham, President, Ultriva, Inc, June 2006, “When Push Comes to Pull, Kanban Wins”, Supplier Strategies) Pull Kanban has two systems the first one is pull system and the other one is Kanban system. In pull system the whole facility operates at the rate of customers. Demand through the use of visual triggers. Traditionally the first operation usually loaded with materials and batch are pushed through the subsequent operation causing inventory and long lead times. BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  5. 5. Kanban facilitates an even flow of production through the different stages of the process reducing work in progress. A typical Kanban system for material supply operates as follows: When requested, a bin of components is issued to an assembly line. The bin contains the Kanban card. As soon as the first component is used from the bin, the card is placed in a designed position fro collection. At a regular time interval, the Kanban cards are collected and immediately sent to the component supplier. This becomes his signal to deliver another bin of components immediately. (Reference: Chris McKellen October 2004 “Pull Kanban” Metalworking Production) The Kanban system is a simple way of implementing a pull control policy, by transferring information from downstream to upstream. The aim of this paper is to develop a general analytical method for performance evaluation of a large analytical method for performance evaluation of a large class of Kanban systems. The production system is decomposed into several stages. Each stage corresponds to a subpart of the production system. A stage may consist of a single machine, a set of identical machines, or a more complex system. With each stage is associated a fixed number of Kanban. (Reference: Maria Di Mascolo and Yannick Frein, 1992, “An analytical method for performance evaluation of Kanban controlled production system”) The pull system of production/materials control requires employee participation and involvement strategies. A relatively new approach that managers are using in the manufacturing process to empower workers is work teams. Expectations are key elements in the motivational process. Employees have to understand that they are going to be compensated for their performance, but it is very important that a match exists between managers, supervisors, and worker expectation. (Reference: Stephanie G. Adams, University of Nebraska – Lincoln and Bianey C. Ruiz-Ulloa, University of Nebraska – Lincoln, “An BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  6. 6. Investigation of Personnel Issues Affecting Kanban Performance: A Case Study” Engineering Management Journal Vol. 15 No. 4) One of the prime reasons why most of the organization fails to embrace pull strategy is “FEAR”. They fear change, loss of control, lack of employ ability, job security, running out of materials etc. In order to overcome these fears or barriers, what an organization need is strong leadership to boost the confidence of its employees and motivate them to embrace Kanban scheduling. These are the sensitive issues if not monitored or controlled properly, can prove to be a disaster for the company. Recognizing the fears that are associated with Kanban implementation will greatly increase the chances for successful implementation. Use these fears to formulate plans that allow you to address and overcome them. Don’t allow fears to be a roadblock, but rather turn them into stepping stones to the organization’s success. (Reference: John gross, April 2005, “Implementing successful Kanban”) Setting of two Kanban systems can improve the production. The advantage of this process is that the trade-off between inventory holding and material handling costs can be left up to the station supervisors. The two card Kanban system is a demand pull system. Only the last station has a schedule. For all other stations, the signal to produce is the physical removal of a container of parts from a stations output material queue. The performance of a two card Kanban controlled station is measured by its ability to meet the demands of downstream stations, as represented by the arrival of withdrawal Kanban, from stock. It is not possible to measure stations performance by conformance to a production schedule because only the last station has a schedule. The fill rate is defined as the proportion of demands met from stock. The Kanban production control literature has focused mainly on the problem of setting the number of Kanban to achieve a desired performance level. However, in practice, setting the number of Kanban is often easier that setting BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  7. 7. minimum performance levels. Given a desired performance level, such as a minimum average fill rate or maximum average withdrawal Kanban queue time, stations supervisions can often quickly converge, by trial and error, to the necessary number of Kanbans. (Reference: B.J.Berkley, 1993, “Setting minimum performance levels for two card Kanban controlled lines”) Toyota's dual-card Kanban technique, with a productivity improvement feature, is contrasted with a less-potent and simpler technique employing a single Kanban. In the Toyota Kanban system every component part type, or part number, has its own special container designed to hold a precise quantity of the part number, preferably a very small quantity. There are two cards, or "Kanban," for each container, and the Kanban identify the part number, container capacity, and certain other information. One Kanban, the production Kanban, serves the work centre producing the part number; the other, called a conveyance Kanban, serves the work centre using it. Each container cycles from the producing work centre and its stock point to the using work center and its stock point, and back, and one Kanban is exchanged for the other along the way. (Reference: Richard J. Schonberger, August 1983, “Applications of Single-Card and Dual-Card Kanban”) The Kanban is a visual cue that is used to signal the replenishment of goods at each stage in the production process. It is the classical mechanism to manage the flow of materials through a JIT system. The number of circulating Kanbans is important to the effective operation of the JIT production system. Too many Kanban cards produce excess work-in- progress inventory, while too few lead to production-floor disturbances. Moreover, the number of Kanbans can significantly influence the load balance between processes, and the amount of orders needed to obtain supplies from subcontractors. Quite often JIT with Kanbans is used in environments not meeting the criteria for optimal performance. These criteria may be unstable product demand, highly variable processing times, or highly variable BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  8. 8. vendor supply times. When these conditions exist, a buffer of inventory is necessary to smooth production flow in the shop. The result is a factory saturated with work-in-progress inventory often characterized by a large number of Kanbans at each work centre. Poor factory performance may also result from excessive machine idle times, long lead times and output shortages that produce a factory that is ‘starved’ for work-in-progress inventory. Such a system is typically characterized by a very small number of Kanbans at each work centre. (Reference: Richard G. Mathieu, Barry A. Wray and Ina S. Markham, 2002, “An Approach to Learning from both good and Poor Factory Performance in a Kanban-Based Just-In-Time Production System”) BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  9. 9. 4. PROBLEM DEFINITION “Due to the increased size of consumables there is increased storage area, poor 5S and not the least waste way.” 5. KANBAN AT GOODRICH Over the years, GOODRICH Aerospace Services Pvt. Ltd. has been facing problems related to inventory management. Currently order is placed for 12 months requirements and the supplier is delivering two months requirements alternate months. This is creating disadvantages such as increasing storage area, poor 5S and not the least way. Therefore it became necessary for the implementation of Kanban which is an inventory control mechanism. The following advantages of Kanban give us the feasibility of implementing it in Goodrich. 1. Low costs associated with inventory storage: Kanban improves operations that are being used in production by emphasizing reduction in inventory costs. By implementing Kanban, a company is able to reduce their inventory levels to only what is needed for each process; this helps lower inventory costs dramatically. 2. Provides quick response to changes: Kanban cards also create a visual schedule for production. They state how many parts should be created and when they must be created by. This allows a company to put more emphasis on the orders that are due in the near future, such as a couple days, versus the orders that are due in a couple weeks. 3. It is a simple technique so its cost is low: A Kanban card is initially attached to a batch to be processed by that workstation. The Kanban card stays attached to the batch until a downstream workstation has a Kanban card available. When this occurs the attached BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  10. 10. Kanban card is freed from the workstation's product and the previously freed Kanban card from the upstream workstation becomes assigned to that batch. Thus a free Kanban card allows a workstation to obtain material from the previous station when the material is available. 4. Lead times are reduced: If operators are doing more than just producing their required parts, more work is being done which in turn helps to increase productivity levels for the company. If productivity increases, it is only natural that lead times will also be reduced, which will help a company establish better relationships with their customers. Kanban serves two functions for a company: to help control production and to help improve processes. Kanban ties different manufacturing processes together, ensuring that the necessary amounts of material and parts arrive at the appropriate time and place, which guarantees that only the required amounts of parts are being used and there is no excess inventory in process. To help processes, Kanban improves operations that are being used in production by emphasizing reduction in inventory costs. Prior to implementing Kanban we can determine the: a) Anticipated decrease or increase of your inventory levels if you were to employ Kanban b) Specific numbers, whose demand patterns are too erratic for Kanban c) Appropriate safety stock setting for each part number based upon its unique demand pattern. BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  11. 11. 6. IMPLEMENTATION 6.1 Setting: The setting up of the Kanban process and the necessary arrangements requires specific location on the production floor where it can be implemented. The area allocated to us is around 10ft X 4ft (Figure1, figure 2). This area is where the Kanban process is setup. Certain other requirements would be the construction of a shelf whose specifications are provided. 6.2 Project team formation: A Kanban implementation team needs to be formed from personnel from different functional areas. This team would be solely responsible for the proper implementation of the process. The team should consist of one technical officer to make changes in the inventory level data, one operating crew should take charge of the Kanban cards, and two production officers (producer and consumer) one should carry the Kanban cards and consumables to and from the suppliers and another should communicate with the suppliers. Apart from this the entire production unit and whomsoever will be using the system has to be trained. 6.3 Introduction of 5S within the scope of Kanban in Goodrich: 5S means Sort, Set in Order, Shine, Standardize, Sustain. 5S is a system to reduce waste and optimize productivity through maintaining an orderly workplace and using visual cues to achieve more consistent operational results. Implementation of this method "cleans up" and organizes the workplace basically in its existing configuration, and it is typically the first lean method which organizations implement. 5S is an organized, relentless, never-ending effort to remove all physical waste from the workplace; set things in order; clean and inspect BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  12. 12. constantly; and create a culture that promotes, endorses and rewards all of the above - from management to the shop floor. The implementation of the shelf for storing the inventory helps the company to follow the 5S efficiently. It helps us to sort the consumables and set them in order. Due to this the workplace looks clean and shines. This makes the system standardized and repeating the 5S discipline we can sustain high quality of work culture. 6.4 Process setting: Kanban is one of the primary tools in a JIT (just-in-time) replenishment system. It is literally based on cards that signal the need for a replenishment cycle for production and materials in a manufacturing environment. It can also be applied as an inventory control system for parts management. Here is how Goodrich could implement Kanban for their production consumables. The lead time for the supplies of consumables is 2 to 3 weeks and IPA does not have lead time. Depending upon the lead time, the supplier or the warehouse only delivers components to the production line as and when they are needed, so there is no storage in the production area. Here is how it works: 1. Kanban cards (Figure 3) are placed with all parts in boxes or containers. 2. When a production worker begins using parts from the box or container, they pull the card and put it in a Kanban mailbox. Starting a cycle of sorts. 3. The cards are picked up regularly and are brought to a sorting room and are placed in an empty box. 4. The part supplier sends a driver to the sorting room. The driver picks up the empty boxes with the Kanban cards. This is the suppliers cue to replenish the part. 5. The order (Kanban card) is brought to the supplier’s facility where the box is restocked with parts. BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  13. 13. 6. The driver for the supplier returns the box of parts back to the manufacturing facility where it is ready to be delivered to the production line. 7. The driver stops by the sorting room to pick up any new Kanban cards and the cycle is repeated. 8. A proper visual status dash board (Figure 4) has to be implemented for finding out the status of the stock levels of the inventory. 9. Once the cards are sent to the supplier, they are placed in the receiving slot. 10. When the order arrives, the Kanban cards are pulled from the receiving slot and are matched to the incoming parts. Resolve with supplier any parts not received for the Kanban cards. 11. The parts are restocked in inventory. The Kanban card is returned to the bin. BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  14. 14. 7. KANBAN CARD: The Kanban card (Figure 3) has been designed according to industry standards. The following gives the details of the content in the card. The numbers are corresponding to the figure2. 1. List the company name on the card to let the supplier know what company they are pulling the parts for. It helps their people when pulling the order. 2. The supplier’s name is printed on the card as well. This helps your employees send the order to the right supplier. 3. This is the supplier’s part number. No more worry about putting the correct catalogue number when typing up a Purchase Order. The part number is always on the reorder card. 4. This is a description of the part. The description helps when they pull parts to replenish trucks. 5. This is the reorder quantity. This tells the supplier how many parts to restock on the order. 6. This is the unit of measurement (i.e. – box, roll, etc.). 7. This is for your company’s reference. It shows the stocking level. 8. This is where the part is located in your facility. It helps your employees restock the parts when they come into your facility. 9. This system uses two cards. One stays with the bin & parts. The other is actually the transport Kanban. This comment line identifies the two distinctive Kanban cards. 10. This shows the date the card was printed and the information was last updated. BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  15. 15. 8. INVENTORY CONTROL STATUS DASH BOARD An inventory control status dash board (figure 4) has been created in MS-Excel for showing the status of the inventory- safe(green), moderate(yellow), critical(red). The consumables list has been shown in a tabular column with their weekly requirement adjacently. Then there is a workspace shown which covers the consumption in the entire week. If there is a stock out in between the week then there is provision for adding new inventory. The colour of the status cell changes according to the inventory level set in prior. 1. If there is 50% or more inventories then the status shows green, i.e. safe. 2. If the inventory level is between 25% and 50% then the status shows yellow, i.e. moderate. 3. If the inventory is less than 25% then the status shows red, i.e. critical and replenishment is required. BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  16. 16. 9. EVALUATION OF THE PILOT PROCESS (IMPLEMENTATION OF THE KANBAN SYSTEM) Like all systems the Kanban system should be primed and measured. Since stock is fixed, the main measurement is due date compliance. However, other measures will indicate the health of this system before it collapses. After designing the Kanban system, reducing the setup time, implementing housekeeping and statistical process control (SPC), the whole system should run on a pilot basis to evaluate and measure the performance of the Kanban system and measure the effectiveness of the system with respect to parameters such as WIP inventory, reduction in setup time, time lost due material, absenteeism and technical reasons etc. The system should be evaluated for two months of running on a pilot basis. 10. CHALLENGES Ignoring the human aspects of the Kanban system will result in failure of Kanban implementation. The Kanban system is one of the simplest systems to operate but it does require a change of mindset on behalf of the operator. These simple rules are actually really difficult to implement. The Kanban system requires modifications to the wage system to compensate for team works and the number of different jobs performed and thus rewarding for both technical and people skills. BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  17. 17. 11. CONCLUSION The study provides a document methodology for practising managers to implement the Kanban system from scratch by developing a set of applicable rules from the abstract ones in a day-to-day inventory control process. The intricacies involving the detailed steps using Kanban, 5S and Status Dash-board described in the text will be useful for developing a complete operational plan in any organization. The study also reveals the extent of benefits accrued by the combined effect of various elements required to enhance productivity, training, 5S, SPC, visual control. The relationship of the wage administration system and its impact on the degree of success of implementing the Kanban system in an organization are well documented which provides a new opening to practitioners. The integrated Kanban system for both calculation of the number of cards and its scheduling on the shop floor can be considered for future research in developing practical models for industry. BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  18. 18. (FIGURE 1) KANBAN SHELF FOR STORING CHEMICALS ON THE FLOOR BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  19. 19. (FIGURE 2) KANBAN SHELF FOR STORING INVENTORY ON THE FLOOR BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  20. 20. (FIGURE 3) KANBAN CARD BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  21. 21. (FIGURE 4) STATUS DASH-BOARD BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01
  22. 22. 12. REFERENCES 1. Bruce D. Henderson, “The logic of Kanban” 2. B.J.Berkley, 1993, “Setting minimum performance levels for two card Kanban controlled lines” 3. Chris McKellen October 2004 “Pull Kanban” Metalworking Production 4. John gross, April 2005, “Implementing successful Kanban” 5. Maria Di Mascolo and Yannick Frein, 1992, “An analytical method for performance evaluation of Kanban controlled production system” 6. Narayan Laksham, President, Ultriva, Inc, June 2006, “When Push Comes to Pull, Kanban Wins”, Supplier Strategies 7. Richard G. Mathieu, Barry A. Wray and Ina S. Markham, 2002, “An Approach to Learning from both good and Poor Factory Performance in a Kanban-Based Just-In- Time Production System” 8. Richard J. Schonberger, August 1983, “Applications of Single-Card and Dual-Card Kanban” 9. Stephanie G. Adams, University of Nebraska – Lincoln and Bianey C. Ruiz-Ulloa, University of Nebraska – Lincoln, “An Investigation of Personnel Issues Affecting Kanban Performance: A Case Study” Engineering Management Journal Vol. 15 No. 4 ` BHAVAN-MARSHALL INSTITUTE OF MANAGEMENT, #43, RACE COURSE ROAD, BANGALORE - 01

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