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Challenges of Supply Chain Performance

(A Case Study of Yergacheffe and Sidama Coffee Cooperative Unions)

Research Proposal on The Course Advanced Research Methodology For


Project Manager

Prepared By:
Hindia Amin

Submitted to: Keneni Alemu (PhD)

Oromia State University

College of Finance and Management Studies

Program of MSc In Project Management

Batu, Oromia, Ethiopa

December, 2022

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Challenges of Supply Chain Performance:
A Case Study of Yergacheffe and Sidama Coffee
Cooperative Unions

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Table of Contents
Contents Page No.
Title Page………………………………………………………………………………………….ii
Table of Contents.......................................................................................................................................iii
Executive Summary....................................................................................................................................iv
List of Acronyms.........................................................................................................................................v
Introduction.................................................................................................................................................1
1.1 Background of the Study.............................................................................................................1
1.2 Statement of the Problem.............................................................................................................2
1.3 Research Questions......................................................................................................................3
1.4 Objectives of the Study................................................................................................................4
1.5 Justification..................................................................................................................................4
1.6 Significance of the Study.............................................................................................................4
1.7 Scope of the Study.......................................................................................................................5
1.8 Organization of the Paper............................................................................................................5
1.9 Materials and Methods.................................................................................................................5
1.10 Ethical Clearance Issues..............................................................................................................7
1.11 General Plan of the Work............................................................................................................8
1.12 Cost Breakdown..........................................................................................................................9
References.................................................................................................................................................10

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Executive Summary

Fierce competition in today’s global markets, the introduction of products with shorter life
cycles, and the heightened expectations of customers have forced business enterprises to invest
in, and focus attention on, their supply chains. This, together with continuing advances in
communications and transportation technologies, has motivated the continuous evolution of the
supply chain and of the techniques to manage it effectively. Giving attention for the supply chain
performance is very crucial. Thus, this study explores the challenges of supply chain
performance in Yergacheffe and Sidama Coffee Cooperative Unions (YCSCCU).

The study will utilize a combination of descriptive and explanatory research designs to describe
and explain the challenges of supply chain performance at YCSCCU. Primary and secondary
data will be employed to elicit information on SC performance variables. A sampling size of
eighty (80) will be obtained through purposive sampling technique based on accessibility of
information and the level of knowledge of supply chain activities and operations.

Analysis will be carried out using the Statistical Package for Social Sciences (SPSS) version 20.0
and Microsoft Excel 2007 Software. Tables and charts will be applied and percentages will be
calculated to give a reflection of the objectives. In addition, Analysis of Variance (ANOVA) will
be applied to compare the mean SCM performance differences between the cooperative unions.
Finally, conclusion and recommendations section will be discussed.

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List of Acronyms

CC Coffee Cooperatives

SC Supply Chain

SCC Sidama Coffee Cooperatives

SCM Supply Chain Management

UNDP United Nations Development Programme

YCC Yirgachaffe Coffee Cooperatives

YCSCCU Yirgachaffe and Sidama Coffee Cooperative Unions

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Introduction

1.1 Background of the Study

The best companies around the world are discovering a powerful new source of competitive
advantage. It's called supply-chain management and it encompasses all of those integrated
activities that bring product to market and create satisfied customers. The Supply Chain
Management (SCM) program integrates topics from manufacturing operations, purchasing,
transportation, and physical distribution into a unified program. Successful SCM, then,
coordinates and integrates all of these activities into a seamless process. It embraces and links all
of the partners in the chain. In addition to the departments within the organization, these partners
include vendors, carriers, third party companies, and information systems providers (Sotiris
Zigiaris, 2000).

One of the most significant paradigm shifts of modern business management is that individual
businesses no longer compete as solely autonomous entities, but rather as supply chains.
Business management has entered the era of internetwork competition. In this emerging
competitive environment, the ultimate success of the single business will depend on
management’s ability to integrate the company’s intricate network of business relationships
(Lambert, D. M., et al., 1998).

Increasingly, the management of multiple relationships across the supply chain is being referred
to as SCM. Strictly speaking, the supply chain is not a chain of businesses with one-to-one,
business-to-business relationships, but a network of multiple businesses and relationships. SCM
offers the opportunity to capture the synergy of intra- and intercompany integration and
management. In that sense, SCM deals with total business process excellence and represents a
new way of managing the business and relationships with other members of the supply chain.
Thus far, there has been relatively little guidance from academia, which in general has been
following, rather than leading, business practice (Hewitt, F., 1994).

Supply-chain has become a prominent issue during the last decade. In recent years, there has
been a great deal of empirical evidence to show that successful supply-chain integration can
improve a firm’s performance and competitive advantage (Fabbe-Costes and Jahre, 2008; Van
der Vaart and van Donk, 2008; Singh and Power, 2009; Ou et al., 2010). SCM seeks to enhance
competitive performance by closely integrating the internal cross-functions within a company

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and effectively linking them with the external operations of suppliers, customers, and other
channel members to be successful (Kim, 2006). This means that a firm that is pursuing SCM
practices needs to pay attention to supply chain integration (SCI) and its implementation
(Hussein & Nassar, 2010).

Supply chain integration is a performance-improving approach that develops seamless linkages


between the actors, levels, and functions within a supply chain to optimize customer service. The
objectives of supply chain integration are to improve efficiency and reduce redundancy while
also enhancing product availability. Supply chain integration strives to better connect demand
with supply, which can both enhance customer service and lower costs. Well-functioning
(integrated) supply chains are characterized by clarity of roles and responsibilities, agility,
streamlined processes, visibility of information, trust and collaboration, and alignment of
objectives (USAID, 2009).

In light of the above, a lot of research work has so far taken place concerning the issue of supply
chain. However, these studies were based on data from other countries and their findings
may not be applicable to Ethiopian context specifically to the YCSCCU. In the context of
Ethiopia, to the knowledge of the researchers, there appears to be very limited work on the
challenges of SC performance. For example, the recent study of Hailemickael Deres (2011)
examined SC performance of selected leather Footwear firms in Addis Ababa, by adopting a
quantitative and case approach. In the context of the above discussions, the purpose of this study
is to examine the challenges of SC performance in YCSCCU.

1.2 Statement of the Problem

Agricultural products such as coffee, oilseeds, khat, leather and leather products, pulses, cut
flower, fruits and vegetables and live animals constitute 70 % of Ethiopia’s exports. Coffee
continues to be the leading export item accounting for 24% of total export values, followed by
gold (19%), oil seeds (14%), Khat (9%), pulses (8%), flower (6%) and live animals (5%)
(UNDP, 2014).

Despite the contribution of coffee to Ethiopia’s economy, it seems the pivotal role of supply
chain and its implementation in the industry is underestimated. This has resulted in decline and
fluctuations in production of coffee. The fluctuations experienced in production are because of
several factors prominent among them includes poor supply chain management, inappropriate
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mode of transport along the coffee supply chain, bad road networks that prevent smooth
transportation of coffee (UNDP, 2014).

Again, poor technological innovations, poor information flow along the coffee supply chain has
reduced efficiency and effectiveness within the unions. It is in the light of these problems and its
concomitant effects that informed the researchers to embark on this study to look into how
challenges of supply chain performance could be overcome to improve coffee production in
Gedeo and Sidama zone.

All the above discussed problems in the coffee unions in relation to performance, effectiveness
and efficiency along with the gap in the literature (to be established in the next chapter) with
respect to SC performance challenges call for detailed investigation.

Furthermore, in order to minimize the above stated problems like the poor SCM, inappropriate
mode of transport along the coffee supply chain, bad road networks, poor technological
innovations, poor information flow and others related to performance, identifying the challenges
that affect cooperative unions performance is vital. Therefore, this study seeks to fill the gap by
providing full information about the challenges that affects performance by examining the
untouched one, and replicating the existing in the Ethiopian context.

1.3 Research Questions

The study will be guided by the following research questions:


What are the major challenges of supply chain performance within the coffee cooperative
unions?
What is the performance difference between the unions in their SC?
What is the scope of supply chain within the cooperative unions?
What are the processes of implementing supply chain mix within the unions SC?

It is hoped that this will help the coffee union to overcome the challenges of supply chain
performance and integration, gain competitive advantage to make informed decisions for their
businesses to do well to improve farmer’s economy. Finally, the study will contribute to existing
knowledge on SCI and serve as a springboard for further studies.

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1.4 Objectives of the Study

The general objective of this study is to explore the challenges of supply chain performance in
Yergacheffe and Sidama Coffee Cooperative Unions (YCSCCU).

Specifically, the following objectives will be achieved:


To assess the major challenges of supply chain performance within the coffee cooperative
unions (CCU)
To compare performance differences between the unions in their Supply Chain
Management
To examine the scope of supply chain within the CCU
To evaluate the process of implementing supply chain mix in cooperative unions

1.5 Justification

The researchers decided to investigate challenges of supply chain performance because it is an


issue in many industries as companies realize the importance of creating an integrated
relationship with their suppliers and customers. Managing the supply chain has become a way of
improving competitiveness by reducing uncertainty and improving service. In addition, supply
chain aids in the development and management of a coordinated flow of goods and services from
the raw material stage to the final customer. Moreover, although, supply chain will play a pivotal
role in managing demand, reducing cost of operation, and improving the quality of products, the
prevailing poor practice in managing the supply chain particularly in the coffee cooperative
union led the researchers to undertake this study.

1.6 Significance of the Study

The result of this study will give an insight to any individual who has interest on supply chain
management, if he or she needs to undertake further study on this area. In addition, it will show
the current supply chain integration practices of the selected coffee cooperatives. Moreover, it
will contribute an empirical study to the area of research undertaken on supply chain
management.

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1.7 Scope of the Study

The existing literature shows many different perspectives of SCM. Those various perspectives
suggest a multi-dimensionality of SCM that covers a set of activities and processes from
upstream and downstream and firms internal operations. This is in line with Sohal et al., (2007)
that conceptualize SCM as three dimensions: intra-functional coordination, inter-functional
coordination and inter-organizational coordination.

However, this study will be delimited on only five aspects (variables) of SCM, which are:
Supplier and Customer Relationship (SCR), Information Sharing (IS), Internal Operation (IO),
Information Technology (IT) and Supply Chain performance (SCP). Geographically, the study
will be conducted in the Southern Nations Nationalities People Region of Ethiopia specifically in
Gedeo and Sidama Zone. The time coverage for the study is from September 2007 to August
2007 E.C.

1.8 Organization of the Paper

This paper will be organized as follows. First there will be an introduction of the study. This is
followed brief literature review on supply chain management and its performance. Next, the
conceptual framework of SCM will be described. Then some of the findings and key issues
related to each of the three elements of the SCM framework will be reported. For simplicity each
element is dealt with separately, although in practice they are closely interrelated. Issues
regarding how to map business processes across the supply chain, and implement supply chain
management will be briefly described. Finally, conclusions and recommendation will be
outlined.

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Chapter Two

2. Review of Related Literature

2.1. Introduction

This part discusses the impact of Supply Chain Management in Organizations including the
Public Sector. It looks into the challenges in SCM performance and then provides a summary of
the main items and identifies the knowledge gap.

2.2. THE CONCEPT OF SUPPLY CHAIN MANAGEMENT

Over the past few years, more emphasis has been placed on gaining competitive advantage by
organizations locally and internationally by incorporating Supply chain, management practices in
their operations. Many organizations have realized the importance of creating an integrated
relationship with the suppliers and customers. This simultaneous integration of customer
requirements, internal processes and upstream supplier performance is referred to as supply
chain management (Tan et.al; 1999). With dwindling support from central government to its
agencies, there is need for better ways for managing operations so as to reduce cost and increase
efficiency. Adoption of good SCM practices can thus provide a good avenue to meet these goals.
The term ‘Supply Chain Management’ (SCM) was introduced by consultants in the early 1980s
(Lambert-Cooper 2000). It has its origins in the logistics literature (Bowersox et al. 1999) and
logistics has continued to have a significant impact on the concept. The scope 11 of SCM has
widened over time from intra-organizational focus to more inter organizational issues (Dubois et
al. 2004). According to Tan (2001) there does not seem to be much consistency in the use of it or
its exact meaning. Tan also argues that although there are some shared ideas about what SCM is
about, there is no universally accepted definition. Absence of universally acceptable meaning of
SCM may negatively influence comparability of SCM studies. However, this study adopts the
wider meaning of SCM which includes all aspects encompassed in most studies. Supply chain
can be defined generally as where three or more organizations are directly linked by one or more
of the flows of products, services, finances and information from a source to a customer
(Mentzer et.al; 2005). In this context of study, SCM involves managing complex flow of
information, materials and money across multiple areas both within and among organizations.
The aim is to achieve goals related to total system performance. With the current business

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environment, organizations cannot battle entirely as individuals. They must rely on the other
organizations in their supply chains to successfully compete in the global market. The concept of
SCM builds on the theories of the firm, especially transaction cost economics, Porter’s value
chain and the network approach which has become established as a useful business paradigm.
The other theory is Best practices theory - a method that has consistently shown results superior
to those achieved with other means, and that is used as a benchmark. In addition, a "best"
practice can evolve to become better as improvements are discovered. Best practice is considered
by some as a business buzzword, used to describe the process of developing and following a
standard way of doing things that multiple organizations can use.

The approach will be to look at the most current research and some more historical reviews as
well to help establish the context of our discussion and to incorporate some of the foundation
theories used to describe strategy and see if there is a connection between supply chain and
strategy. We may look to address the idea that there is no connection because further research in
the area on the impact of supply chain management needs to be undertaken. If we look to all the
research in the area to discuss success factors and what is actually working we will be able to
determine the common traits of successful supply chain driven firms.

2.3. SUPPLY CHAIN MANAGEMENT PRACTICES

Owing to SCM’s interdisciplinary origin, there have been various definitions of SCM (Li et.al;
2006). The SCM concept was derived from the areas of purchasing and Supply Management,
and transportation and Logistics Management (Li et.al 2006, Tan et.al; (2006) stated that SCM is
synonymous with the integration of the supply base that evolved from the traditional purchasing
and materials functions. Others who defiend SCM from the Purchasing perspective include
Wisner and Tan (2000) and Reck and Long (1998) and they stated that SCM is a basic strategic
business process rather than a specialized supporting function. From the perspective of
transportation and logistics management however, SCM is synonymous with integrated logistics
systems’ and focuses on inventory reduction both within and across organizations in supply
chain (Fisher, 1997; Lamb, 1995). Various studies have been conducted to identify these
different SCM practices. (Koplin et.al. 2007) determined the underlying dimensions of SCM
practices and tested empirically and framework identifying the relationship among SCM
practices, operational performance and SCM-related organizational performance for SMEs in 13
Turkey. The set of twelve SCM practices identified were: close partnership with suppliers; close

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partnerships with customers. Supply Chain benchmarking; JIT Supply Procurement, few
suppliers; many suppliers; strategic planning; outsourcing; sub-contracting; holding safety stock
and 3PL (Chen and Pawlraj,2004) study on development of SCM practices identified a set of
four reliable and valid practices significant to SCM. Ulusoy (2003) identified four SCM practices
while assessing the supply chain and innovation management in manufacturing industries of
Turkey, They are; logistics, supplier relations, customer relations and production. Similarly a
study conducted by Lee and Kuncade (2003) proposed six major dimensions of SCM:
partnership; information technology; operational flexibility; performance measurement;
management commitment and demand characterization. Kuei et.al (2001) on the other hand used
eleven supply quality-management practices to study and test manager’s perception on the
association between Supply chain quality management practices and organizational performance.
The eleven factors were; Top management leadership, training; product design, supplier quality
management; process management; quality data reporting, employees’ relationships; customers’
relations, benchmarking; supplier selection; and supplier participation. They found that perceived
improvements in organizational performance are associated with improvements in supply chain
quality management. Li et.al. (2005) defined SCM practices as the set of activities that
organizations undertake to promote effective Management of the Supply chain, SCM practices
are 14 described include supplier partnership, outsourcing, cycle-time compression, continuous
process flow and information technology (IT) sharing, supply chain practices is a way of
reducing duplication effects by focusing on core competencies, and use inter organizational
standard such as activity based costing or EDI and eliminating un necessary waste along the
supply chain.

2.4. INFORMATION TECHNOLOGY

Supply Chain Management has emerged quickly throughout the early part of 21st Century due to
improvement in technology. Technology is increasingly affordable and available to help
organizations to take advantage of supply chain strategies. Because of the competitive pressures
facing business it is critical for them to use supply chain strategies 16 to create synergies with
supply chain partners in order to succeed in the global competitive environment (Chairman et.al,
2002:34). High level best practice for SCM, technology can apply to any business, even though
the operation may be specific to an organization implementing a specific SCM System, for

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example, could be a waste of money if the overall operation is a problem. Automating a broken
process does not fix the process.

2.5. SUPPLY CHAIN MANAGEMENT PRACTICES AND PERFORMANCE

Chong et.al (2011) empirically tested a framework which identified the relationships between
supply chain management practices, operational performance and innovation. Performance of
Malaysian manufacturing and service firms Data for the study were collected from a sample of
163 Malaysian manufacturing and service firms. The research model was tested using structural
equation modeling. The results showed that SCM practices in both the upstream and downstream
supply chain have a direct and significant impact on organizational performance among
Malaysian firms. The findings also revealed that manufacturing and service firms in Malaysia
did not have a significant difference in their SCM practices. 21 Tracey et.al (2005) empirically
tested the impact of Supply-Chain Management (SCM) capabilities on business performance so
as to determine the degree customer-oriented SCM issues influence competitive position and
organizational performance. Methodology was employed to generate reliable and valid
measurement instrument. Responses from 474 manufacturing managers were then utilized to test
casual model using the results indicated significant positive relationships exit among three types
of SCM capabilities.

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3. Research Methods and Methodology

3.1. Introduction

In this study a combination of descriptive and explanatory research design will be used to
describe and explain the challenges of supply chain performance at YCSCCU our case study.
Based on time horizon, the study will utilize cross-sectional in the sense that all relevant data
will be collected at a single point in time. The reason for preferring a cross-sectional study is due
to the vast nature of the study and the limitation of time. And obtaining information from a cross-
section of a population at a single point in time is a reasonable strategy for pursuing many
descriptive researches (Janet, 2006).

This study will employ of both primary and secondary data. The primary data will be gathered
through field survey using self-administered questionnaires. Moreover, some of the questions in
the questionnaire will be adopted from Hailemickael Deres (2011) and the secondary data will be
collected from research papers, journals, books and online resources. The researchers also will
obtain data from written documents such as reports, as well as records made available by
the case study cooperatives.

Focus group discussions (FGDs) have been proven instruments to illustrate and explore the inter-
subjective dynamics of thoughts, speech and understanding of the members of a group (Pratt,
2001). This study intends to employ this tool because as such groups ‘can sometimes actively
facilitate the discussion of otherwise “taboo” topics because the less inhibited members of the
group “break the ice” for shyer participants or one person’s revelation of “discrediting”
information encourages others to disclose’ (Hollander, 2004). A FGD will be held to explore the
challenges of SCP. While selecting the participants of the discussion, an effort will be made to
ensure diversity and representation in terms of gender, age and length of experience.

The population of the study consists of all cooperative managers/chairperson and union
managers. There are a total of 72 cooperatives under YCSCCU (25 YCCU and 47 SCCU).
Under both offices there is a procurement, transport, finance and general manager. A sampling
size of eighty (80) will be obtained through purposive sampling technique and the respondents
will be selected based on accessibility of information and the level of knowledge of supply chain
activities and operations of YCSCCU.

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The researchers will use questionnaire and FGD to collect primary data useful for addressing the
objective of the study. A well developed questionnaire will be distributed to the selected 80
employees of participant sector offices. In order to maximize the response rate, the data
collectors will visit and collect the unreturned questionnaires after two days. In addition, in-depth
and diverse data will be collected using FGD to be conducted with five employees in each
cooperative union at off-office hour. Data gathered from primary sources will be further
substantiated by a critical review of secondary sources like books, articles, magazines, brochures
and published and unpublished materials.

In order to answer the study questions scores will be assigned to the respondents’ choice of
answers and aggregated scores will be ranked accordingly. All data will be coded to detect any
anomalies in the responses and analysis will be carried out using the Statistical Package for
Social Sciences (SPSS) version 20.0 and Microsoft Excel 2007 Software. Tables and charts will
be applied and percentages will be calculated to give a reflection of the objectives. In addition,
Analysis of Variance (ANOVA) will be applied to compare the mean SCM performance
differences between the cooperative unions.

Regarding instrument validity a pilot study will be conducted to refine methodology and test
instrument such as a questionnaire before administering the final phase. Questionnaires will be
tested on potential respondents to make the data collecting instruments objective, relevant,
suitable to the problem and reliable as recommended by John Adams et al. (2007). Issues raised
by respondents will be corrected and questionnaires will be refined. Finally, the improved
version of the questionnaires will be printed, duplicated and dispatched.

Apropos instrument reliability Creswell (2009) considers the reliability of the instruments as the
degree of consistency that the instruments or procedure demonstrates. In this study each
statement will be rated on a 5 point likert response scale which includes strongly agree, agree,
undecided, disagree and strongly disagree. Based on this an internal consistency reliability test
will be conducted with a sample of 15 cooperative managers and the Cronbach's alpha
coefficient for the instrument will be tested. Typically an alpha value of 0.80 or higher is taken
as a good indication of reliability, although others suggest that it is acceptable if it is 0.67 or
above (Cohen et al., 2007).

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1.9 Ethical Clearance Issues

The researchers will address ethical considerations of confidentiality and privacy. Researchers
will use a rigorous and conscious effort at all times to sustain this promise. All the research
participants who will be involved in this study will be duly informed about the purpose of the
research and their willingness and consent will be secured. They will be also contacted at a place
and time convenient to them. Participation in the study is voluntary, and all participant responses
will be confidential. Finally, a copy of the final report will be given to the organization if
necessary.

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1.10 General Plan of the Work

All of the information about activities schedule can be summarized in the following Gantt chart.
This Gantt chart setting out the timing, sequence and duration of research activities.

Month
Activities
Jan Feb. Mar. Apr. Ma Jun. Jul. Aug.
. y
Compiling related literature
Questionnaire preparation and distribution
Collecting data
Analysis and interpretation of the data
collected
Conclusion and recommendation
Final paper submission

Cost Breakdown

The following section depicts the budget required to undertake this study. The total budget
required is categorized as transportation, per diem, material costs, labor cost and focus group
discussion costs.
No Item Description Measurem Quantity
ent
2 Training Per diem for 2 supervisors training 1 day 200*2
Per diem for 9 data enumerators training 1 day 200*9
3 Data collection Per diem for 2 supervisors 10 days 50*10*2
Per diem for 9 data enumerators 15 days 100*5*5
4 Refreshment Refreshment for focus group discussion 2 days 80*5*2

5 Photocopy Copying necessary materials like journal articles, office 0.75 per 3000
documents so on page
7 Internet charges To browse items related with the research 15 200 hrs
8 Stationery To be used by the researchers and assistants for this research purpose - -
9 Others Typing, editing, reviewing, printing, binding, so on. 3per page 100 pages*
Total

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References

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