BBAH 434 – INFORMATION SYSTEM AND E-BUSINESS

CIA III

TITLE – DESIGN AND IMPLEMENTATION OF ERP IN THE

JEWELLERY MANUFACTURING INDUSTRY

SUBMITTED TO – Dr Praveen Babu P

SUBMITTED ON – 26 March 2024

SCHOOL OF BUSINESS AND MANAGEMENT

CHRIST(DEEMED-TO-BE) UNIVERSITY

SUBMITTED BY –

Pratham Goyal (2223329)

Rana Pratap Simha (2223331)

Rohan Kalra (2223332)

Saaket Kumar (2223333)

Sanchit Maitra (2223334)

Shah Hussain (2223335)

Shubham Kumar (2223337)

Table of Contents
Introduction................................................................................................................................1

First-Generation ERP Systems...................................................................................................2

Differences and Similarities between ERP, SAP and MIS.........................................................3

Differences.............................................................................................................................3

Similarities.............................................................................................................................5

Reality Check – Implementing a Single-system ERP................................................................6

Structural Model of the ERP System.........................................................................................7

Existing ERP Model...............................................................................................................7

Proposed ERP Model.............................................................................................................8

Factors Considered for Designing the ERP Model..................................................................10

Internal Factors.....................................................................................................................10

External Factors:..................................................................................................................11

Design Factors:.....................................................................................................................12

Integration of Business Functions............................................................................................12

Feedback – Malabar Gold and Diamonds................................................................................15

Conclusion................................................................................................................................16

Annexures................................................................................................................................17
Introduction
In today's competitive business landscape, efficiency and informed decision-making are
paramount. Enter Enterprise Resource Planning (ERP) systems, the digital workhorses that
streamline operations and empower organizations to thrive.

What is an ERP System?

An ERP system is a comprehensive software suite that integrates various core business
functions into a single platform. Imagine a central nervous system for your company,
connecting departments like accounting, inventory, production, sales, and human resources.
This seamless integration eliminates data silos, fosters collaboration, and provides a real-time
view of your entire operation.

Key Benefits of ERP Systems:

Enhanced Efficiency: Streamlined workflows, automated tasks, and improved

communication lead to significant efficiency gains across the organization.

Data-Driven Decisions: Real-time access to accurate data empowers informed decision-

making at all levels.

Enhanced Collaboration: Departments can work together seamlessly, fostering better

communication and collaboration.

Who Uses ERP Systems?

ERP systems are valuable tools for businesses of all sizes and across various industries. From
manufacturing giants to retail chains, wholesalers to healthcare providers, ERP systems
empower organizations to improve efficiency, gain a competitive edge, and achieve their
strategic goals.

Through this assignment we delve deep into how an ERP system works and create a model
ERP system for the jewellery manufacturing system while also taking inputs from Malabar
Gold and Diamonds to gain feedback and modify our system accordingly.

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First-Generation ERP Systems

While the case study provided is about ERP implementation at Rolls-Royce, which is a
manufacturing company, the overview of old generation/1st generation ERP systems and
their components can be applied to the jewellery industry as well.
The old generation or 1st generation ERP systems in the jewellery industry were designed to
streamline and integrate various business processes, such as procurement, production,
inventory management, sales, and finance. These systems aimed to replace disparate legacy
systems and provide a centralized repository for data management.
Functioning of Old Generation ERP Systems in the Jewellery Industry:
1. Data Centralization: ERP systems consolidated data from various departments, such as
design, manufacturing, sales, and finance, into a single centralized database. This
allowed for better data sharing and eliminated redundant data entry.
2. Process Integration: ERP systems integrated business processes like raw material
procurement, production planning, inventory management, order processing, and
financial accounting. This enabled a seamless flow of information across departments.
3. Standardization: ERP systems enforced standardized processes and best practices
across the jewellery organization, ensuring consistency in operations and compliance
with industry regulations.
4. Real-time Reporting: ERP systems enabled real-time reporting and analytics,
providing decision-makers with up-to-date information on production, sales, and
inventory levels for better decision-making.
Components of Old Generation ERP Systems in the Jewellery Industry:

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 1. Core Modules: The core modules of old generation ERP systems in the jewellery
industry typically included procurement, production planning, inventory management,
sales and distribution, finance, and accounting.
2. Database Management System: ERP systems relied on a robust database management
system (DBMS) to store and manage organizational data centrally, including product
designs, customer orders, and financial records.
3. User Interface: ERP systems provided a user interface, often client-server based, for
users from different departments (e.g., design, production, sales) to interact with the
system and perform various tasks.
4. Reporting and Analytics: ERP systems included reporting and analytics tools for
generating standard reports on production, sales, and financial performance, as well as
performing basic data analysis.
5. Integration Middleware: ERP systems used integration middleware to connect with
legacy systems and facilitate data exchange between different applications, such as
computer-aided design (CAD) software and point-of-sale (POS) systems.
While old generation ERP systems brought significant improvements to the jewellery
industry by integrating processes and providing centralized data management, they had
limitations in terms of flexibility, scalability, and advanced analytics capabilities. Newer
generations of ERP systems addressed these limitations by incorporating advanced
technologies, such as cloud computing, mobile applications, and advanced analytics, to better
meet the evolving needs of the jewellery industry.

Differences and Similarities between ERP, SAP and MIS

Differences

Parameters ERP SAP MIS

Definition Integrated software ERP software Management
solution used to developed by SAP Information System
manage business SE, providing (MIS) is a
processes and comprehensive computerized
automate back-office solutions for database of financial
functions across business information
various departments. management. organized and
programmed in such

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 a way that it
produces regular
reports on operations
for every level of
management.
Scope Covers a wide range Offers a Primarily focused on
of business functions comprehensive suite providing
including finance, of integrated information to
human resources, modules covering all support managerial
manufacturing, aspects of business decision-making
supply chain, etc. operations. across departments.
Vendor Offered by various Developed and Developed by
vendors including maintained by SAP various vendors or
SAP, Oracle, SE, a German can be custom-built
Microsoft, etc. multinational by organizations
software based on their
corporation. specific
requirements.
Customization Offers extensive Can be customized
Can be highly
customization to some extent but
customizable to fit
the specific needs options through typically lacks the
and processes of an
SAP's proprietary extensive
organization.
programming customization
language, ABAP options found in
(Advanced Business ERP systems.
Application
Programming).
Implementation Implementation Implementation Implementation is
often involves requires specialized typically quicker and
significant time and SAP consultants and less resource-
resources due to can be complex and intensive compared
complexity and time-consuming. to ERP systems, as
customization. MIS systems focus

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 more on reporting
and analysis rather
than operational
integration.
Cost Costs can vary SAP systems are Costs can be lower
widely depending on known for their high compared to ERP
factors such as initial costs, systems, but can still
vendor, including licensing, vary depending on
customization, and implementation, and factors such as
licensing fees. ongoing customization and
maintenance. integration
requirements.

Similarities

Similarities between ERP and SAP:

1. Integration: Both ERP and SAP systems are designed to integrate various business
processes and functions into a unified system. They streamline operations by consolidating
data and processes across departments like finance, human resources, procurement, and
production.

2. Data Management: ERP systems, including SAP, emphasize efficient data management by
centralizing data storage and ensuring data consistency across the organization. This allows
for better decision-making based on accurate and up-to-date information.

3. Standardization: ERP systems, including SAP, often enforce standardized processes and
procedures across the organization. This promotes consistency and efficiency in operations by
eliminating redundant or disparate systems.

4. Scalability: Both ERP and SAP systems are scalable, meaning they can adapt to the
changing needs and growth of an organization. They provide flexibility to add or modify
functionalities as the business expands or evolves.

5. Business Insights: ERP systems, particularly SAP, offer robust reporting and analytics
capabilities that enable organizations to gain insights into their operations. These systems

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generate various reports, dashboards, and key performance indicators (KPIs) to facilitate
informed decision-making.

Similarities between ERP and MIS:

1. Organizational Integration: Both ERP systems and MIS aim to integrate various aspects of
an organization's operations, such as finance, inventory management, sales, and human
resources, into a cohesive system.

2. Data Centralization: ERP systems and MIS often centralize data from different
departments or functional areas, allowing for better coordination and access to information
across the organization.

3. Decision Support: Both ERP and MIS systems provide decision support through reporting,
analysis, and visualization tools. They help managers make informed decisions by presenting
relevant data in a meaningful format.

4. Process Automation: ERP systems and MIS systems automate routine tasks and processes,
reducing manual effort and improving efficiency. This automation can streamline workflows
across the organization.

5. Performance Monitoring: ERP systems and MIS systems enable organizations to monitor
performance metrics and key indicators related to various aspects of their operations. This
monitoring helps identify areas for improvement and measure progress towards
organizational goals.

Reality Check – Implementing a Single-system ERP

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Implementing a single ERP system for the jewellery manufacturing industry presents both
opportunities and challenges. It's important to conduct a reality check to assess the feasibility
and implications of such an endeavor:

Opportunities:

Integration and Streamlining: A single ERP system can integrate various business functions,
including inventory management, production planning, supply chain management, financial
management, and CRM. This integration streamlines processes, eliminates data silos, and
enhances collaboration across departments.

Data Consistency: With a single ERP system, data consistency and accuracy are improved.
All stakeholders access the same data in real-time, reducing errors and improving decision-
making capabilities.

Efficiency Gains: By standardizing processes and automating routine tasks, efficiency gains
can be achieved. This leads to reduced lead times, improved resource utilization, and overall
cost savings.

Scalability: A robust ERP system is scalable, allowing jewellery manufacturers to adapt to

changing business needs and accommodate growth without significant disruptions.

Challenges:

Complexity of Implementation: Implementing a single ERP system is a complex undertaking,

requiring significant time, resources, and expertise. Customization may be necessary to align
the system with unique industry requirements, adding to the complexity.

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Resistance to Change: Employees may resist the adoption of a new ERP system due to fear of
job displacement, unfamiliarity with technology, or concerns about disruptions to daily
workflows. Effective change management strategies are essential to address these concerns
and ensure smooth transition.

Legacy Systems and Data Migration: Jewellery manufacturers may have existing legacy
systems and databases that need to be integrated or migrated to the new ERP system. Data
migration can be challenging, as it requires careful planning, validation, and testing to ensure
data integrity and consistency.

Cost Considerations: Implementing a single ERP system involves significant upfront costs,
including software licensing fees, implementation costs, training expenses, and ongoing
maintenance fees. Jewellery manufacturers must carefully evaluate the return on investment
(ROI) and weigh the costs against the expected benefits.

Industry Specificity: The jewellery manufacturing industry has unique characteristics and
requirements that may not be fully addressed by off-the-shelf ERP solutions. Customization
may be necessary to accommodate industry-specific processes, such as gemstone grading,
jewellery design, and karigar management.

Structural Model of the ERP System

Existing ERP Model

The structural model of the Jewellery Industry consists of various interconnected modules
that facilitate the management of different business processes. This ERP system is designed
to integrate key functions such as inventory management, sales and distribution, finance and
accounting, and customer relationship management.

The ERP system operates on a centralized database, ensuring that all departments have access
to accurate and real-time information. This promotes collaboration and coordination among
different teams, streamlining operations, and increasing efficiency.

Inventory management module: This module enables effective tracking and management of
inventory across various stores. It provides real-time information on stock levels, demand,
and product availability, allowing for optimal inventory planning and forecasting.

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Sales and distribution module: This module helps manage the sales process, including order
processing, invoicing, and delivery tracking. It improves order accuracy, reduces order
fulfilment time, and enhances customer satisfaction.

Finance and accounting module: This module handles financial transactions, manages
accounts receivable and payable, generates financial reports, and supports budgeting and
forecasting activities. It ensures accurate financial data, enables timely financial analysis, and
aids in decision-making.

Customer relationship management module: This module tracks customer interactions,

manages customer data, and facilitates targeted marketing and customer service. It helps
build strong relationships with customers, improves customer satisfaction, and supports
loyalty programs.

Proposed ERP Model

In today's competitive market, efficient management of resources, streamlined production

processes, and effective inventory control are crucial for the success of any manufacturing
industry, including jewellery manufacturing. Enterprise Resource Planning (ERP) systems
play a pivotal role in integrating various business functions, providing real-time data insights,
and optimizing operations. This report outlines the comprehensive ERP model tailored for the
jewellery manufacturing industry, covering key aspects such as inventory management,

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production planning, supply chain management, financial management, quality management,
business intelligence, karigar management, and customer relationship management (CRM).

1. Inventory Management: In jewellery manufacturing, tracking raw materials (gems,

metals, etc.), work-in-progress items (partially completed jewellery), and finished goods
inventory is essential. The ERP system employs barcode or RFID technology to track
inventory movements accurately. It utilizes demand forecasting algorithms to ensure optimal
stock levels, preventing shortages or overages. Furthermore, it facilitates inventory
reconciliation, batch tracking, and expiry date management to minimize wastage and ensure
product quality.

2. Production Planning and Control: The ERP system facilitates efficient production
planning by creating production schedules, allocating resources (machinery, labor), and
optimizing workflow to meet demand while minimizing costs and lead times. It considers
factors such as material availability, production capacity, and order priorities to create
feasible production plans. Real-time monitoring of production processes allows for timely
adjustments, ensuring adherence to schedules and quality standards.

3. Supply Chain Management: Integration of suppliers into the ERP system streamlines
procurement processes, manages supplier relationships, and ensures the timely delivery of
raw materials. It facilitates automated purchase order generation based on inventory levels
and demand forecasts, enabling just-in-time inventory management. Supplier performance
metrics help in vendor evaluation and continuous improvement initiatives.

4. Financial Management: The ERP system handles accounting processes, including

accounts payable, accounts receivable, general ledger, and financial reporting. It automates
invoice processing, payment approvals, and reconciliation, enhancing efficiency and
accuracy. Real-time financial insights enable better decision-making and compliance with
regulatory requirements.

5. Quality Management: Implementing quality control measures is paramount in jewellery

manufacturing to ensure the production of high-quality items that meet customer expectations
and regulatory requirements. The ERP system integrates quality checkpoints throughout the
production process, conducting inspections, and enforcing corrective actions when deviations
occur. It also maintains comprehensive quality records for traceability and audit purposes.

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6. Business Intelligence and Reporting: The ERP system analyzes data collected from
various modules to generate insights, monitor key performance indicators (KPIs), and support
decision-making. Customizable dashboards and reports provide stakeholders with real-time
visibility into business performance, enabling proactive management and continuous
improvement initiatives.

7. Karigar (Artisan) Management: The ERP system enables the registration of karigars
with details such as specialization, location, and contact information. It facilitates task
assignment and work progress tracking for individual pieces or bulk orders, ensuring efficient
utilization of skilled labour. Integrated payroll functionality automates wage calculation and
payment disbursement based on work completed, enhancing transparency and fairness.

8. Customer Relationship Management (CRM) - Basic: The ERP system captures

customer details and purchase history, facilitating personalized marketing campaigns and
targeted promotions. It manages communication channels (phone, SMS) for order
confirmations, delivery updates, and customer feedback collection. While offering basic
CRM functionalities, the system focuses on improving customer satisfaction and retention
through timely responsiveness and service excellence.

The ERP model tailored for the jewellery manufacturing industry addresses key operational
challenges and enhances competitiveness through efficient inventory management,
production planning, supply chain management, financial management, quality management,
business intelligence, karigar management, and basic CRM functionalities. By leveraging
technology to integrate and optimize business processes, jewellery manufacturers can achieve
operational excellence, enhance customer satisfaction, and drive sustainable growth in today's
dynamic market landscape.

Factors Considered for Designing the ERP Model

Internal Factors

Business Processes: Understanding the intricacies of jewellery manufacturing business

processes is crucial. This involves mapping out the entire production cycle, including
inventory management, production planning, quality control, and sales processes. Deep
knowledge of internal workflows ensures that the ERP system is tailored to meet specific
industry requirements.

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Organizational Structure: Consideration of the organization's hierarchy, departments, and
reporting structures is essential. The ERP system should accommodate different user roles
and access levels, ensuring that each employee has access to the relevant information and
functionalities required for their job roles.

Data Integration: Integration with existing internal systems and databases is vital to ensure
seamless data flow across departments. This includes integration with accounting software,
CRM systems, and any other legacy systems used within the organization. Compatibility with
existing hardware infrastructure should also be considered.

Change Management: Implementing a new ERP system often requires significant changes in
processes and workflows. Adequate change management strategies should be in place to
address resistance to change and facilitate smooth transition and adoption by employees.
Training programs and user support mechanisms should be provided to ensure that employees
are proficient in using the new system.

External Factors:

Regulatory Compliance: Compliance with industry regulations and standards, such as those
related to product quality, safety, and environmental sustainability, must be ensured. The ERP
system should support compliance efforts by providing robust documentation, audit trails,
and reporting functionalities.

Market Dynamics: The jewellery manufacturing industry is subject to evolving market trends,
customer preferences, and competitive pressures. The ERP system should be flexible and
scalable to adapt to changing market conditions and accommodate future growth and
expansion initiatives.

Supplier Integration: Integration with external suppliers and vendors is essential for seamless
procurement processes. The ERP system should support electronic data interchange (EDI)
and other communication protocols to facilitate real-time collaboration with suppliers,
ensuring timely delivery of raw materials and components.

Customer Expectations: Meeting customer expectations for product quality, customization

options, and timely delivery is paramount. The ERP system should enable efficient order
processing, production planning, and inventory management to ensure that customer orders
are fulfilled accurately and on time.

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Design Factors:

Scalability: The ERP system should be designed to accommodate future growth and
expansion. This includes scalability in terms of user capacity, transaction volumes, and data
storage capacity. Modular design principles should be adopted to facilitate incremental
upgrades and enhancements as business needs evolve.

Flexibility: The ERP system should be flexible enough to accommodate customization and
configuration based on specific business requirements. This includes configurable workflows,
user interfaces, and reporting capabilities that can be tailored to suit the unique needs of the
jewellery manufacturing industry.

Data Security: Data security is paramount, especially when dealing with sensitive customer
information and proprietary business data. The ERP system should incorporate robust
security measures, including encryption, access controls, and data backup mechanisms, to
safeguard against unauthorized access, data breaches, and cyber threats.

User Experience (UX): A user-friendly interface and intuitive design are essential for
ensuring user adoption and productivity. The ERP system should prioritize usability and
accessibility, with features such as role-based dashboards, search functionalities, and
contextual help tools to enhance the overall user experience.

Integration of Business Functions

1. Inventory Management:

Internal Stakeholders: Warehouse Managers, Procurement Team, Production Managers

Roles and Responsibilities:

- Warehouse Managers oversee inventory levels, ensuring accurate tracking of raw materials,
work-in-progress items, and finished goods.

- Procurement Team utilizes demand forecasting algorithms to optimize stock levels and
manage supplier relationships.

- Production Managers rely on real-time inventory data to schedule production and minimize
material shortages or overages.

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2. Production Planning and Control:

Internal Stakeholders: Production Managers, Operations Team, Quality Control Team

Roles and Responsibilities:

- Production Managers create production schedules, allocate resources, and monitor

workflow to meet demand while maintaining quality standards.

- Operations Team ensures smooth execution of production plans, coordinating with suppliers
and resolving production bottlenecks.

- Quality Control Team conducts inspections and enforces corrective actions to uphold
product quality throughout the production process.

3. Supply Chain Management:

Internal Stakeholders: Procurement Team, Logistics Team, Supplier Relations Team

Roles and Responsibilities:

- Procurement Team automates purchase order generation based on inventory levels and
demand forecasts, ensuring timely procurement of raw materials.

- Logistics Team manages transportation and distribution, coordinating with suppliers to

optimize delivery schedules and minimize lead times.

- Supplier Relations Team evaluates supplier performance and implements continuous

improvement initiatives to enhance supply chain efficiency.

4. Financial Management:

Internal Stakeholders: Finance Managers, Accounts Team, Compliance Officers

Roles and Responsibilities:

- Finance Managers oversee accounting processes, including accounts payable, accounts

receivable, and financial reporting.

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- Accounts Team utilizes the ERP system to automate invoice processing, payment approvals,
and reconciliation, ensuring accuracy and compliance.

- Compliance Officers rely on real-time financial insights to ensure regulatory compliance

and support decision-making.

5. Quality Management:

Internal Stakeholders: Quality Control Team, Production Managers, Compliance Officers

Roles and Responsibilities:

- Quality Control Team integrates quality checkpoints throughout the production process,
conducting inspections and enforcing corrective actions as needed.

- Production Managers collaborate with the Quality Control Team to maintain product quality
standards and meet regulatory requirements.

- Compliance Officers ensure adherence to quality management protocols and maintain

comprehensive quality records for audit purposes.

6. Business Intelligence and Reporting:

Internal Stakeholders: Management Team, Business Analysts, Marketing Team

Roles and Responsibilities:

- Management Team utilizes customizable dashboards and reports to monitor key

performance indicators and make data-driven decisions.

- Business Analysts analyze data collected from various modules to generate insights and
identify areas for improvement.

- Marketing Team leverages customer data and purchase history to personalize marketing
campaigns and improve customer retention.

7. Karigar (Artisan) Management:

Internal Stakeholders: HR Managers, Production Supervisors, Payroll Administrators

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Roles and Responsibilities:

- HR Managers oversee the registration of karigars and manage their details such as
specialization and contact information.

- Production Supervisors assign tasks to karigars and track work progress for individual
pieces or bulk orders.

- Payroll Administrators utilize integrated payroll functionality to calculate wages and

disburse payments based on work completed by karigars

8. Customer Relationship Management (CRM):

Internal Stakeholders: Sales Team, Customer Service Representatives, Marketing Team

Roles and Responsibilities:

- Sales Team utilizes customer details and purchase history stored in the ERP system to
provide personalized sales recommendations and follow-up on leads.

- Customer Service Representatives manage communication channels for order

confirmations, delivery updates, and feedback collection, ensuring timely responsiveness and
service excellence.

- Marketing Team utilizes CRM functionalities to segment customers and tailor marketing
campaigns to enhance customer satisfaction and retention.

Feedback – Malabar Gold and Diamonds

The proposed ERP system for jewellery manufacturing was appreciated for its comprehensive
features, acknowledging the critical need for seamless operations across departments in our
large-scale manufacturing setting. Key aspects such as inventory management, production
planning, and supply chain management align well with the company’s requirements.

Efficient production planning capabilities are recognized as imperative for meeting customer
demands while minimizing costs and lead times. They commended the system's real-time
monitoring and encourage the integration of predictive analytics to enhance resource
utilization and adaptability to last-minute order changes. Similarly, streamlining procurement
processes and ensuring transparency in the supply chain are vital, with suggestions made for

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incorporating blockchain technology to strengthen traceability, especially in sourcing ethical
materials.

In financial management, automation of processes such as invoice processing is

acknowledged for its efficiency, while recommendations for advanced financial analytics
highlight the importance of deeper insights into profitability and cash flow management.
Quality management, business intelligence, artisan management, and customer relationship
management functionalities are noted for their alignment with the company’s objectives, with
suggestions for enhancements focusing on continuous improvement and delivering superior
customer experiences.

Conclusion
While the benefits of ERP are undeniable, successful implementation requires careful
planning, change management, and ongoing user training. Businesses must view ERP as an
investment in their future, not just a software purchase. By aligning implementation with
strategic goals and fostering user adoption, organizations can unlock the full potential of ERP
and achieve significant business transformation.

Annexures

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