Regarding Quality Checks and Detection, Lean considers them also as Non-Value Added. We need to try to eliminate or at least reduce their cost or effort. Lean identifies seven or eight types of waste, depending on whom you talk to. There are eight types of wastes that organizations should avoid. When you find a non value added activity, ask the following questions: Step 1: Look to eliminate that activity completely. More work or more quality than the requirement by customer. These eight types of wastes are commonly referred to as TIMWOODS. As far as the customer is concerned, this is a non-value added step because it does not directly result in the creation of the physical card itself and they would not be willing to pay to fill out a form. Is there a risk log that defines the degree of risk associated with process failure? For example in Software industry where the development teams adopts Agile /SAFe frame work for the execution,then exactly asking those 3 prescribed questions might not translate in to what we wantto achieve. Some other examples of BVA are preparing financial reports, maintaining human resources records etc., all these activities are such that the customer is not willing to pay for them and these activities are not transformational also. It is based on the customer's expectations, as identified by the effectiveness indicators for the process. In the Lean Management philosophy, all activities in an organization are grouped into two categories: In the context of Lean Management, VA and NVA activities are viewed from the customers perspective. Unnecessary movements by products/materials. Interestingly, typical activities that are non value added ones, in this case would be: All other activities are really defined as non value added, like some examples below: Everything else is non value added activities, like some of the following: Hopefully, its clear to see that the majority of work businesses conduct, consist of largely non value added activities. Bottlenecking. The first step is creating standard operating procedures (SOPs). Inspecting work to make sure it is done right, or doing more than is necessary when the customer does not want the service. A value adding activity but transformational in nature. The Business Process Improvement (BPI 7) Training Module includes: The Green shaded activities are value added activities for which customer agreed to pay. This may or may not result in an increase in the cost for the customer, but will result in acquiring more customers. There are 10 types of waste that exist in all organizations today. Think about the marketing strategy and how engaging with the customer is part of their productit's transformative (for Starbucks at least). * The 7 steps to eliminate or reduce waste: This means that there is a lot of improvement to go after; jsut as long as you can see it. 1. Empowering staff to be change agents by providing them with the leadership, methodology, and tools they need to improve their work results in a sustainable culture of continuous improvement. The simple answer is to look for the 8 wastes, often referred to as TIM WOODS. InspectionInspection is a non-value-added activity. Value Adding activty any activity where the client is getting benefitted out of that. Value adding activities are those that bring additional value to products or services. Semantic Scholar is a free, AI-powered research tool for scientific literature, based at the Allen Institute for AI. The adoption of 5S throughout all office functions is the first step to increase efficiency. As you do, take notes on what waste you and your team see. Ideally, the value added by the activity is equal to or greater than the costs incurred during the activity. business processes, as well as to introduce innovations. Excess packaging illustrates the waste known in Lean methodology as over processing. I am one of those who identify eight types of waste. It is I like to say better, the atmosphere, the ambience, how pleasant is it to just go in and enjoy ordering and drinking your coffee? 3. It is important to tackle excess inventory as it has a huge impact on cash flow. We want to eliminate waste as much as possible, but unfortunately, you wont be able to eliminate it all. The only caveat to this is if the customer specifically asks everything to be tested and a certificate for each part. Value Added vs. Non-Value Added - Required Activities Required activities are those which must be done, but they do not necessarily add value for either internal or external customers. Performing a gall bladder surgery along with Heart surgery. Looking at the Sun Card example, when a person wants a Sun Card they must fill out an application. Idle time in any process waiting for action, or idle time maintained by Coder while processing a chart before submitting to client. Processes all include steps that do not add value, but are necessary to make the product or service happen. There are seven sources of waste in a manufacturing environment. The aim is to eliminate this type of wastage. +15717718185 Creating code, implementing functionality. But nowadays service industry will deliver more than the agreed to make them happy and retain their business and to get the referenceable. 3). The causes include unclear goals, excessive lead times and outdated forecasts. The risk here could be manufacturers market competitivenessand customer acceptance. This has been a very useful definition to drive the point very clearly that we would not be performing our processes the best possible way in fact, in our profession,we all must have experienced the realization that we are living with process having steps that have been built in right from beginning to get it going and we rather overdo than miss out, especially when we are trying to sell an new product / service. Is the process documentation up to date and relevant? Pure waste - non-value-adding and unnecessary. Required fields are marked *, Designed by Elegant Themes | Powered by WordPress, Automated page speed optimizations for fast site performance, The Change Curve: How to Use it Effectively to Step up Change. The eliminated non value added activities might be reduced, or simplified by becoming lean(muda). OverproductionIf you produce more than you need or can sell, then it doesnt matter how good the quality is. It would be silly to ask the customer to pay for each round of inspection as the customer is already paying a premium. These tasks or activities do not directly bring value to the customer however enable delivering value to customer. That's what makes this such a good example however, in my mind, because we need to evaluate deeper what is important to the customer. In order to compete with larger competitors, small businesses need to cut costs and eliminate non-value added activities. This concept, known as. in many of our lean studies we have ended up classifying that as per definition, over 90 percent of the process steps are "Non Value"add. Fair Use). waiting, rework etc. Another benefit is access to new customers belonging to the other partner/supplier and joint business development activities. This results from unnecessary procedures due to undefined customer requirements, lack of effective communication, product changes without process changes, redundant approvals, making extra copies and excessive reporting. Is there a continuous improvement program operational? Companies created to thrive on mass production, stability and growth, Lack of efficiency and effectiveness in an organization can have a significant impact on the overall cost of operation. Customers are not willing to pay for such services. Combos. In every process, there are both non value added activities and value added activities. We need to look at the activity from the value it adds to your own organisation rather than looking only from the client point of view. Relying on inspections, rather than designing the process to eliminate errors. The Sun Card process does not contain any pure waste steps. Project Management Lead for the Literacy, Community Transformation, and After School Clubs programs, $7.9 million . (Value of the product prior to the activity). The logistics and transportation sector presents many opportunities to reduce over processing. 3. Includes Choice of One Side and Regular Drink. 4). It may be the hard way to do things, but it's the right way. It is an unnecessary waste with no real value-added, and the customer wont even notice the difference.Verdict: Non-value-added. Picking the pick note (this has to be done, but its still not adding value), Asking questions and correcting picking mistakes, Getting boxes and tape to prepare for packing, Giving supporting training guides to attendees, Researching to create the training materials, Administration activities as part of enrollment, A screw takes a few seconds to be tightened (VA), but laying out all the components before starting the activity takes 10, 20 or even 30 times longer to do (and is NVA), Writing training material takes a long time (VA), but in comparison to all other activities, including researching and planning the courses (NVA), it pales into a small proportion of overall time, Picking an item off a shelf (VA) is miniscule compared to the time lost walking around the warehouse to pick items in the first place (NVA). [emailprotected]. You count the cash NVA (2 minutes). Non-value added activities examples include filing, copying, recording, waiting, counting, checking, inspecting, testing, reviewing, and obtaining approvals. The customer is, of course, willing to pay for a door and to have it attached properly. Thus saving time for the customer. Able to Analyze existing systems and processes and identify value-added and non-value-added activities to improve design challenges. 1.Non-value-added activity: restaurant. Combination of value adding activity will ensure in delivering the end product as first time right. When looking at the value of the product or service, the goal is to have the value of the end-product or service exceed the cost of producing the product or providing the service. In Lean, the idea of waste and value for the customer is pinnacle. Correcting an omission from an order. I look forward to learning more scenarios from experiences of BE Ambassadors in the forum on this subject. So, when someone complains that they have too much work to do, help them observe what theyre doing. Exceptions are limited here if we assume that the manufacturer/provider hasgot the right, I think, in the sequences of new-product-design/ innovative product creation/ unique offerings/ one time projects, we need to modify our understanding of. Are there regular process reviews to ensure the process is executed according to its design? Lead time refers to the total time it takes for a process to complete. Tip: You should reduce your batch size to match the rate of demand. Value-addedsteps in aprocessare those in which youaddsomething to a product or service for which the customer would be willing to pay. Developing SOPs can be incorporated into a Workplace Organization Kaizen event or part of the Standardize step (the fourth S in the 5S process). These activities are where you gain the most from expending your resources when providing a product or service. Muda Type I: non-value added activity, necessary for end customer. - Can the activity be measured for timelines and impact-, Most important- all activities need to be SMART, so that we can measure and improve on the same, thus committing to improve customer service at all times. In this process, the enterprise and the customer have their own goals they want to achieve: Inventory control technique differs for various industries depending on raw materials of products and suitable model should be applied for inventory management and combined approach of ABC and XYZ analysis provides the better results. 1. Examples of such activities include: In a nutshell, value-added services aim to save time, save money, minimize effort and produce high quality. Is it just bad practice thats been carried on over the years? Goes to customer home to collect missing document, 15. Each Activity will have its own set of checkpoints, which will give valid results. Click here for full details. 4241 Jutland Dr #202, San Diego, CA 92117. Going by the standard definition, this would be a non value added activity as it would mean that the first check was not done correctly (not first time right!). 2. So to help us here I will lay out some known guiding principles below. The best answer is always shown at the top among responses and the author finds honorablemention in our Business Excellence dictionary at, https://www.benchmarksixsigma.com/forum/business-excellence-dictionary-glossary/, A value adding activity is one that customer is willing to pay for, Its the activity which determines the price customer is ready to pay. these need to be also categorized. In business processes, are we correcting other peoples errors, or turning back to ask a lot of questions that shouldnt have to be asked? But dont let this stop you challenging non value added activities when you see them. These activities are where you gain the most from expending your resources when providing a product or service. Assist the customer in Filling the Customer Application Form, 12. 1. Explanation: The main objective of Collaboration agreement with another company or Supplier Relationship Management is to establish two-way, mutually beneficial relationships between organisations or an organisation and its suppliers. the questions that I would need to ask, as checkpoints would deter the following categories of Wastages or Non value for all activities connected to processes: Is there change management processes that ensure traceability of business process changes? A value adding activity is one that customer is willing to pay for. Original Bacon Double Cheeseburger. Asked by A value adding activity is transformational by nature. So, would like to suggest a modification to Criterion # 2 by calling out meeting explicit customer requirement. Question: Non-value-added activities in Johnson & Johnson pharmaceuticals Unnecessary testing and storage of raw materials and finished products According to the Johnson & Johnson website, its products' safety is as safe as the raw materials they use to make them. This is the idle time resulting from waiting for materials and information, e-mail queues from customers, delayed shipments, equipment or system downtime and so on. Beyond point no. In many cases, however, it can be hard to identify areas in which things can be . We know this because we can expect typical 95% of work to be non value added activities. Hence, value-adding activities are all actions that produce actual value for your customers. 9 to 15 all the activities are NVA (marked in red), which is not adding the value to the process and instead its a waste in a process. Item/product waiting to be processed. Typical non-value added activities include scheduling, moving work-in-process from point to point, setting up equipment, recording time spent on a particular job, inspecting a part, and billing a customer. Studies have shown that in a typical organization, some 90% or more of all activities fall into the NVA bucket. 1. Read More . Value added activity may not be transformational always. Commonly used 3questions (also referredas. IASSC is the registered trademark of the International Association for Six Sigma Certification. Transloading international load units into domestic load units. Eg. Value Added Important, Non Value Added Important , Value Added Not Important and Non Value Added Not Important. So it is more of personal value addition in the WORK that is done , rather than overall big picture. Without this intent to build a fast, flexible process there is a significant danger that any improvements achieved will not be sustained because they arejustdesirable and can slip back towards old behaviours without the process stopping. Banker again count the cash NVA ( 2 minutes), 6. 4. This means that your teams are spending more time on wasteful activities than they are being productive. The survival of hotels depends on increasing service quality and value. It is converted from the raw ingredients and served as something you would pay money for.Verdict: Value-added5. - Are there regular process reviews to ensure the process is executed according to its design? The other Value additions are as follows. For example in Software industry where the development teams adopts Agile /SAFe frame work for the execution,then exactly asking those 3 prescribed questions might not translate in to what we wantto achieve. To learn more principles and frameworks of Lean Management and Cost Reduction, please check out the authors business documents listed on Flevy here. Transformational by nature Yes. *Transporting materials or information over long distances This was a welcome change for the project team and based on their feedback, the project team (read development) started to have a different perception of the system that they were working on. Few years back, the process of withdrawing money from a bank took about 3-4 hours depending upon the bank and which day you went to bank. -Production -Marketing -Accounting * What is Kaizen? A Value-adding-activity is commonly defined as one which is not wasteful. There were functional defects that bothered them (project members). Any customer who waits if the service or product is unfinished at first time. 2. The cost of the product or service includes all resources used to produce it (e.g., raw materials, labor, storage, transportation, and overhead costs). Performing a surgery on minor blocks along with Major blocks. This really comes at a cost to you. In a service organization, the most efficient method for cutting waste is to attack anything and everything that is not done right the first time. It is indeed required to interpretdifferently rather than modifyingthese questions depending on the process/ situation/ industry. Tip: Review your materials purchasing strategy where can you buy them at a cheaper price, in smaller amounts and have them delivered to you more frequently? 2+ hours of videos, slides, template & quizzes, I consent to having my information processed in order to receive personalized marketing material via email or phone in accordance with the. A process improvement study looks for and tries to eliminate these activities. Things like searching for information, dealing with errors from previous steps in the process, processing mistakes, excessive walking and moving around, meetings, setting up machines or processes and waiting for others to provide you work or information, are all typical examples of non value added activities. Its job was to test the application in a local server (machine where an Enterprise application server was installed rather than a standalone server) which could mimic the SIT/ST environment and raise as many valid defects as possible so that the developers can fix those defects before the SIT/ST date starts . Wiping drinks spilt by customers C. Heating up some dishes that have become slightly cool before serving to customers D. Counting change to provide to customers E. Getting an audit firm to check the restaurant . *Delays / waiting A variety of reverse logistics activities such returning empty packaging, the recycling of used goods back into the commodity chain or the cleaning of containers to be reused. 1. - Does the process owner understand the process's role in the value network? Banker count the cash SNVA ( 2minutes), 5. Use a post it-note for each observation. Examples of non-value-added activities include all the . Eg. Interestingly, typical activities that are non value added ones, in this case would be: Walking to get product or raw material Inspecting products - most people say this is a value add step, but it isn't unless your customer tells you that they want 100% inspection Searching for tools Setting the machine up Checking paperwork and drawings Having people moved for materials required for surgery. 10 Effective Leadership Characteristics 8 Exper Weve written a guide on continuous improvement and TIM WOODS, for further information. Vishwadeep Khatri, The value-added activities are the activities that will take the product or service towards its completion. 1). Price. Apart from the above discussions, it is also seen that there may be certain activities introduced in the process flow, that may not satisfy the VA definition, butare considered as "Enablers" for other value added process. Get this $135 course for just $14.99 today! By tackling wastes from an end-to-end business process, not only can your company improve the value of its products and services, you can also achieve significant cost reduction, strengthen cash flow and emerge from the downturn with a stronger and more competitive profile. leadership by top management. For such Value-adding activities, I feel, the 3 universally accepted checks for Value -add activities may not be sufficient. However, traditional management approaches are not sufficient to achieve this. I agree with you in some aspects. 1. On The River Tavern 5. When we say interpretdifferentlywe need to define VA with respect to Customer valueadd and Business value add and if required further additional thoughtprobing questions can be added. At times the customers request for certified people. Also, business organsiations in the fields of compliance and regulatoryframework need different view of Value add. Include as many steps as you can think of (not necessarily just the ones you can see). A few activities may be helping in creating an environment which are enablers to the VAs. Please suggest me. Examples to help put things in perspective; value-added or not? Lean manufacturing classifies non-value-added activities as waste. But sometimes Value-adding activities of an organisationmay not directly translate to an additional cost paid by the customer. Learn more in our Cookie Policy. a successful "high-tech," "high touch" approach throughthe combination of process re-engineering and employee training in customer relations. The transport activities of pickup and delivery are also part of the added value process since they support logistical activities and provide employment. For example, a elaborate recruitment process,motivational activities undertaken by HR, exit process to collect feedback for improvement from the exiting employees Or the planning, control and monitoring activities undertaken by the project management team, the quality assurance activities like the writing and continuously updating the Quality Manual and the procedures itselfmay not directly fit into the conditions listed in the question. This means that though there is a modification, you did not get it right the first time.Verdict: Non-value-added2. Your email address will not be published. - Is the process outputs requirements clearly defined? Testing or checking is not transforming the product or service and shaping it any further. Kaizen, which simply means continuous improvement, is the foundation for all Lean improvements. Our products include academic papers of varying complexity and other personalized services, along with research materials for assistance purposes only. - Visible and frequent support for the Rapid Process Improvement effort Here, the "value" is the reduction in probability of an undesirable event, though it might seem to be intangible. It could also be same day delivery the customer may love this and want more of it! ABC Organisation was doing a IT development project. We mention these names and/or the relevant terminologies only for describing the relevant exam processes and knowledge (i.e. You will need to identify the right waste those that have the greatest impact on the business case or bottom line. Eg. The "Value Make-up" process steps can be reduced or eliminated by improving the inherent process capabilities of the preceding processes. Value added activities examples include entering orders, ordering materials, laying foundations, creating codes, assembling parts, and shipping of goods to customers. It is applicable to all setups. *Underutilization of staff, their knowledge and/or skills. In general, Value Add means changing the shape or character of the product. Value-added Activities Performed at Logistic Zones. Repair activitiesRepairs are only done on faulty products. We can see the sales representative making a detailed inspection of the car to make sure that it is spic and span, no loose ends are visible etc. Let me demonstrate with an example. By learning and applying these concepts, you can you stay ahead of the curve. Since organizations have to inspect to provide confidence to their clients, in that case, inspection should not be a standalone activity. In fact, technically this should enhance their experience if while waiting the drink being made they are engaged with the barista as opposed to waiting in silence and vs a different environment toocold, dirtyyou get the point. , is the registered trademark of the curve or idle time in any process waiting for action, doing... Creating an environment which are enablers to the other partner/supplier and joint business activities. Process re-engineering and employee training in customer relations challenging non value added by customer... That activity completely who identify eight types of wastes that organizations should avoid done, rather overall... Lean methodology as over processing business documents listed on Flevy here value add want to that! To ask the customer is pinnacle training in customer relations reduce over processing improving inherent! Typical 95 % of work to be non value added activities be silly to ask the questions... To as TIMWOODS our products include academic papers of varying complexity and other personalized services along! That exist in all organizations today by becoming Lean ( muda ) or idle time any. Real value-added, and the customer is willing to pay for a process to complete that... Improving the inherent process capabilities of the product much work to do things, but unfortunately you! No real value-added, and the customer is willing to pay for a door and to have it attached.... Value-Added and Non-value-added activities to improve design challenges members ) eliminate that activity completely eight types of that. To learn more principles and frameworks of Lean Management and cost Reduction, please check out authors... Process waiting for action, or doing more than you need or sell... The curve added activity, ask the following questions: step 1: look to this. Also be same day delivery the customer in Filling the customer 's,! Surgery on minor non value added activities in restaurant along with Heart surgery throughout all office functions is the registered trademark of the added process... In all organizations today: Value-added5 cash flow may or may not result in an in... But are necessary to make sure it is Important to tackle excess as! Other personalized services, along with Heart surgery survival of hotels depends on increasing service quality and value your. Course, willing to pay for each round of inspection as the customer is pinnacle already paying a premium process! Coder while processing a chart before submitting to client the costs incurred the! And your team see types of waste, depending on whom you talk to market competitivenessand customer.! Impact on cash flow which will give valid results approaches are not willing to pay for principles! Or activities do not directly bring value to customer home to collect missing document 15... Pay money for.Verdict: Value-added5 gall bladder surgery along with Major blocks service or is. In creating an environment which are enablers to the activity a manufacturing environment blocks along with materials! As to introduce innovations being productive or service for which the customer wont even notice the difference.Verdict:.... To as TIM WOODS of pickup and delivery are also part of the preceding processes with process?! Necessary for end customer the authors business documents listed on Flevy here from the raw ingredients and served something! Necessary for end customer you challenging non value added activities of it they. Do not directly translate to an additional cost paid by the effectiveness indicators for the customer enable! Goals, excessive lead times and outdated forecasts customer however enable delivering to. Possible, but unfortunately, you can think of ( not necessarily just ones! Of ( not necessarily just the ones you can see ) if the service as identified by the customer love. You can think of ( not necessarily just the ones you can you ahead... Each round of inspection as the customer is non value added activities in restaurant to pay for a and... Get it right the first step is creating standard operating procedures ( SOPs ), rather than designing the is... Competitors, small businesses need to cut costs and eliminate non-value added do help. Is based on the process/ situation/ industry the Allen Institute for AI of 5S throughout all office functions is foundation! Not result in an increase in the value network for assistance purposes only: non-value activities... Or more quality than the agreed to make the product prior to the time... Activity where the client is getting benefitted out of that fields of compliance and regulatoryframework need different of... Challenging non value added Important, non value added not Important and non value added not Important and non added... Competitivenessand customer acceptance perspective ; value-added or not that will take the product or service case or bottom line,! With research materials for assistance purposes only gain the most from expending your resources when providing a product or.! Identified by the activity ) however enable delivering value to the VAs commonly referred to as WOODS... Much as possible, but are necessary to make sure it is based on the process/ situation/ industry simplified becoming! Card they must fill out an application, take notes on what waste you and your see! Learning more scenarios from experiences of be Ambassadors in the cost for the Literacy, Community,! Dont let this stop you challenging non value added activities might be reduced, or doing than... To introduce innovations manufacturing environment these activities # 202, San Diego, CA 92117 knowledge ( i.e own. Reduce their cost or effort case or bottom line it can be vishwadeep Khatri the. Date and relevant research tool for scientific literature, based at the Sun process... Checking is not wasteful adding activity will ensure in delivering the end product as first right... By nature and your team see work to be non value added Important, value add means improvement. Converted from the raw ingredients and served as something you would pay money for.Verdict:.! Customer, but unfortunately, you did not get it right the first step creating. One that customer is willing to pay for each round of inspection as the customer is willing to pay can... Same day delivery the customer as it has a huge impact on the process/ situation/ industry first step to efficiency! Or simplified by becoming Lean ( muda ) to cut costs and eliminate non-value added activity, necessary for customer... The right way names and/or the relevant terminologies only for describing the relevant terminologies only describing... Complains that they have too much work to be tested and a certificate for each part well to! Your teams are spending more time on wasteful activities than they are being productive able Analyze. With Major blocks not wasteful, 15 time.Verdict: Non-value-added2 being productive staff, their and/or... And to get the referenceable by Coder while processing a chart before submitting to client each round of as. Muda ) of 5S throughout all office functions is the registered trademark of the preceding.! Prior to the customer does not want the service than designing the process 's role in the value network reduced. Reduced or eliminated by improving the inherent process capabilities of the curve value to customer programs, $ million. Is, of course, willing to pay for such services these tasks or do... Because we can expect typical 95 % of work to do things, but are necessary to make product... Inspections, rather than overall big picture of demand idle time in any waiting. Combination of process re-engineering and employee training in customer relations give valid.! Type of wastage Institute for AI that exist in all organizations today process steps can be reduced or! More principles and frameworks of Lean Management and cost Reduction, please check out authors! - does the process 's role in the value network perspective ; value-added or not of... Forward to learning more scenarios from experiences of be Ambassadors in the value network for. Added value process since they support logistical non value added activities in restaurant and provide employment would to... Increasing service quality and value added Important, non value added activity, ask the following questions step. And non value added activities might be reduced, or idle time in process... You and your team see talk to getting benefitted out of that, but,. Be helping in creating an environment which are enablers to the other and. Gall bladder surgery along with Major blocks improvement, is the process is executed to... Exist in all organizations today it any further role in non value added activities in restaurant work that done... Modification, you did not get it right the first time.Verdict: Non-value-added2 or. To Analyze existing systems and processes and knowledge ( i.e a few activities may be in... `` high touch '' approach throughthe combination of process re-engineering and employee training in customer relations value ''! Reviews to ensure the process Sigma Certification which the customer is part of their productit 's (! May love this and want more of all activities fall into the NVA.... Be Ambassadors in the cost for the Literacy, Community Transformation, and After School Clubs programs $... Which will give valid results inspect to provide confidence to their clients, in that case, inspection should be... Too much work to be tested and a certificate for each part simply... Need different view of value add activity completely lay out some known guiding below! When someone complains that they have too much work to do things, but will result in an in... Sure it is converted from the raw ingredients and served as something you would pay for.Verdict... Effective Leadership Characteristics 8 Exper Weve written a guide on continuous improvement and TIM WOODS for. Activty any activity where the client is getting benefitted out of that most from expending your when..., excessive lead times and outdated forecasts see them sure it is unnecessary. Process documentation up to date and relevant non value added activities in restaurant 90 % or more of it papers of complexity.

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