Production planning and control are critical components of any manufacturing organization.

It helps
organizations with the regular and timely delivery of their goods. Furthermore, it
allows manufacturing businesses to increase their plant’s efficiency and reduce production costs
Numerous software and tools for production scheduling and planning are available on the market,
including Visual Planning, Max Scheduler, and MRP easy, which assist manufacturing organizations in
planning, scheduling, and controlling their production.
According to KBV Research, the manufacturing operations management software market is anticipated
to reach $14.6 billion by 2025 globally, expanding at a market growth of 10.2 percent CAGR during the
forecast period.
So, what exactly is production planning and control?
Production planning is an administrative process within a manufacturing business. It ensures that
sufficient raw materials, personnel, and other necessary items are procured and prepared to produce
finished products according to the specified schedule.
Scheduling, dispatch, inspection, quality control, inventory management, supply chain management,
and equipment management require production planning. Production control makes sure that the
production team meets the required production targets, maximizes resource utilization, manages quality,
and saves money.

“Manufacturing is more than just putting parts together. It’s coming up with ideas, testing
principles and perfecting the engineering, as well as final assembly.”– James Dyson

In oversize factories, production planning and control are frequently managed by a production planning
department, which comprises production controllers and a production control manager. More significant
operations are commonly monitored and controlled from a central location, such as a control room,
operations room, or operations control center.

Why Should You Consider Production Planning?

An efficient production process that meets the needs of both customers and the organization can only be

achieved through careful planning in the early stages of production. In addition, it streamlines both

customer-dependent and customer-independent processes, such as on-time delivery and production

cycle time.

A well-designed delivery and production plan minimizes lead time, the period between placing an order
and its completion and delivery. The definition of lead time varies slightly according to the company

and the type of production planning required. For example, in supply chain management, lead time

refers to the time required for parts to be shipped from a supplier.

Steps in Production Planning and Control

Routing

The first stage of production planning determines the path that raw materials will take from
their source to the finished product. You will use this section to determine the equipment,
resources, materials, and sequencing used.

Scheduling

It is necessary to determine when operations will occur during the second stage of production
planning. In this case, the objectives may be to increase throughput, reduce lead time, or
increase profits, among other things. Numerous strategies can be employed to create the most
efficient schedule.
Dispatching
The third and final production control stage begins when the manufacturing process is initiated.
When the scheduling plan is implemented, materials and work orders are released, and work is
flowing down the production line, the production line is considered to be running smoothly.

Follow-Up
The fourth stage of manufacturing control ascertains whether the process has any bottlenecks
or inefficiencies. You can use this stage to compare the predicted run hours and quantities with
the actual values reported to see if any improvements can be made to the processes.
Production Planning Example
Though production planning is classified into several categories, including flow, mass
production, process, job, and batch, we will look at a batch production planning example here.
Manufacturing products in batches is known as "batch production planning." This method
allows for close monitoring at each stage of the process, and quick correction since an error
discovered in one batch can be corrected in the next batch. However, batch manufacturing can
lead to bottlenecks or delays if some equipment can handle more than others, so it's critical to
consider capacity at every stage.
Example
Consider the following example of batch production planning:
Jackson's Baked Goods is in the process of developing a production plan for their new
cinnamon bread. To begin with, the head baker determines the batch production time required
by the recipe
He then adjusts the bakery's weekly ingredient orders to include the necessary supplies and
schedules the weekly cinnamon bread bake during staff downtime.
Finally, he creates a list of standards for the bakery staff to check at each production stage,
allowing them to quickly identify any substandard materials or other batch errors without
wasting processing time on subpar cinnamon bread.

Final Words

Running a smooth and problem-free manufacturing operation relies heavily on a precise

production planner. Many large manufacturing companies already have a strong focus on
streamlining their processes and making the most of every manufacturing operation, but small
manufacturing companies still have work to do in this area. As a result, plan, schedule, and
control a production that will enable you to run your business in order to meet its objectives

What is the difference between planning and scheduling in production?

Production planning and scheduling are remarkably similar. But, it is critical to note that
planning determines what operations need to be done and scheduling determines when and
who will do the operations.

What is a production plan?

A product or service's production planning is the process of creating a guide for the design and
manufacture of a given product or service. Production planning aims to help organizations
make their manufacturing processes as productive as possible.
Manufacturing Planning and Control (MPC) system

A production (or manufacturing) planning and control (MPC) system is concerned with
planning and controlling all aspects of manufacturing, including materials, scheduling
machines and people, and coordinating suppliers and customers. An effective MPC system is
critical to the success of any company. An MPC system’s design is not a one-off undertaking;
it should be adaptive to respond to changes in the competitive arena, customer requirements,
strategy, supply chain and other possible problems (Vollmann )

There are 5 levels in the manufacturing planning and control (MPC) system:
 – Strategic business plan,
– Production plan (sales and
operations plan),
– Master production schedule,
– Materiel requirements plan,
– Purchasing and production
activity control.

Each level varies in purpose,

time span and level of detail.
Since each level is for different
time span and purposes, each
differs in the following:

– Purpose of the plan,

– Planning horizon: the time
span from now to some time in
future for which plan is
created,
– Level of detail: the detail
about products require for the
plan,
– Planning cycle: the frequency
with which the plan is reviewed.

At each level, 3 questions must be answered:

– What are the priorities: how much of what is to be produced and when?
– What is the available capacity: what resources do we have?
– How can differences between priorities and capacity be resolved?

Strategic Business Plan (SBP)

The strategic business plan is a statement of the major goals and objectives the company
expects to achieve over the next 2 to 10 years or more. It is a statement of the broad direction
and show the kind of business the firm wants to do in the future.

The development of the SBP is the responsibility of senior management. Each department
produces its own plans to achieve the objectives set by the SBP. These plan will be coordinated
with one another and with the SBP. The level of detail is not high. It is concerned with general
market and production requirements (total market for major product groups) and not sales of
individual items.
Strategic business plans are usually reviewed every six months to 1 year.

Production Plan (PP)

Given the objectives set by SBP, production management is concerned with the following:

– The quantities of each product group that must be produced in each period;
– The desired inventory levels;
– The resources of equipment, labor, and material needed in each period;
– The availability of the resources needed.
The level of detail is not high. The production plan will show major product groups or families.
Production planners must devise a plan to satisfy market demand within the resources available
to the company. For effective planning, there must be a balance between priority and capacity.
Along with the market and financial plans, the PP is concerned with implementing the strategic
business plan. The planning horizon is usually 6 to 18 months and is reviewed each month or
quarter.

The Master Production Schedule (MPS)

The master production schedule is a plan for the production of individual end items. It breaks
down the PP to show, for each period, the quantity of each end item to be made. Inputs to the
MPS are PP, the forecast for individual end items, sales orders, inventories and existing
capacity.
The level of detail is higher. The MPS is developed for individual end items.
The planning horizon usually extends from 3 to 18 months but depends on the purchasing and
manufacturing lead times . Usually the plans are
reviewed and changed weekly or monthly.

Material Requirements Planning (MRP)

The material requirements planning is a plan for the production and purchase of the
components used in making the items in the MPS. It shows the quantities needed and when
manufacturing intends to make or use them.
The level of detail is high. The MRP establishes when the components and parts are needed to
make each end item.
The planning horizon is at least as long as the combined purchase and manufacturing lead
times. It usually extends from 3 to 18 months.

Purchasing and Production Activity Control (PAC)

Purchasing and production activity control use the MRP to decide the purchase or manufacture
of specific items. Purchasing and PAC represent the implementation and control phase of MPC
system. Purchasing is responsible for establishing and controlling the flow of raw materials
into the factory. PAC is responsible for planning and controlling the flow of work through the
factory.
The planning horizon is very short, from a day to a month. The level of detail is high since it is
concerned with individual components, workstations and orders. Plans are reviewed and
revised daily.

Capacity management
At each level in the MPC system, the priority plan must be tested against the available
resources and capacity of the manufacturing system. If the capacity cannot be made available
when needed, then the plans must be changed. There can be no valid, workable PP unless this
is done.
Over several years, machinery, equipment and plants can be added to or taken away from
manufacturing. However, in the time spans involved from PP to PAC, these kind of changes
cannot be made. Some changes, such as changing the number of shifts, working overtime,
subcontracting the work, can be accomplished in these time spans.

Continue at: http://www.apicsforum.com/wiki/manufacturing_planning_and_control_%28mpc

%29_system
The text above is owned by the site above referred.

Production planning and control are critical components of any manufacturing organization. It
helps organizations with the regular and timely delivery of their goods. Furthermore, it
allows manufacturing businesses to increase their plant’s efficiency and reduce production
costs.

Numerous software and tools for production scheduling and planning are available on the
market, including Visual Planning, MaxScheduler, and MRPeasy, which assist manufacturing
organizations in planning, scheduling, and controlling their production.

According to KBV Research, the manufacturing operations management software market is

anticipated to reach $14.6 billion by 2025 globally, expanding at a market growth of 10.2
percent CAGR during the forecast period.
So, what exactly is production planning and control?

Production planning is an administrative process within a manufacturing business. It ensures

that sufficient raw materials, personnel, and other necessary items are procured and prepared to
produce finished products according to the specified schedule.

Scheduling, dispatch, inspection, quality control, inventory management, supply chain

management, and equipment management require production planning. Production control
makes sure that the production team meets the required production targets, maximizes resource
utilization, manages quality, and saves money.

“Manufacturing is more than just putting parts together. It’s coming up with ideas, testing
principles and perfecting the engineering, as well as final assembly.”

– James Dyson

In oversize factories, production planning and control are frequently managed by a production
planning department, which comprises production controllers and a production control
manager. More significant operations are commonly monitored and controlled from a central
location, such as a control room, operations room, or operations control center.

Why Should You Consider Production Planning?

An efficient production process that meets the needs of both customers and the organization
can only be achieved through careful planning in the early stages of production. In addition, it
streamlines both customer-dependent and customer-independent processes, such as on-time
delivery and production cycle time.

A well-designed production plan minimizes lead time, the period between placing an order and
its completion and delivery. The definition of lead time varies slightly according to the
company and the type of production planning required. For example, in supply chain
management, lead time refers to the time required for parts to be shipped from a supplier.
Steps in Production Planning and Control

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Routing
The first stage of production planning determines the path that raw materials will take from
their source to the finished product. You will use this section to determine the equipment,
resources, materials, and sequencing used.

Scheduling

It is necessary to determine when operations will occur during the second stage of production
planning. In this case, the objectives may be to increase throughput, reduce lead time, or
increase profits, among other things. Numerous strategies can be employed to create the most
efficient schedule.

Dispatching
The third and final production control stage begins when the manufacturing process is initiated.
When the scheduling plan is implemented, materials and work orders are released, and work is
flowing down the production line, the production line is considered to be running smoothly.

Follow-Up
The fourth stage of manufacturing control ascertains whether the process has any bottlenecks
or inefficiencies. You can use this stage to compare the predicted run hours and quantities with
the actual values reported to see if any improvements can be made to the processes.

Production Planning Example

Though production planning is classified into several categories, including flow, mass
production, process, job, and batch, we will look at a batch production planning example here.
Manufacturing products in batches is known as "batch production planning." This method
allows for close monitoring at each stage of the process, and quick correction since an error
discovered in one batch can be corrected in the next batch. However, batch manufacturing can
lead to bottlenecks or delays if some equipment can handle more than others, so it's critical to
consider capacity at every stage.

Example
Consider the following example of batch production planning:
Jackson's Baked Goods is in the process of developing a production plan for their new
cinnamon bread. To begin with, the head baker determines the batch production time required
by the recipe.

He then adjusts the bakery's weekly ingredient orders to include the necessary supplies and
schedules the weekly cinnamon bread bake during staff downtime.

Finally, he creates a list of standards for the bakery staff to check at each production stage,
allowing them to quickly identify any substandard materials or other batch errors without
wasting processing time on subpar cinnamon bread.

Final Words
Running a smooth and problem-free manufacturing operation relies heavily on a precise
production planner. Many large manufacturing companies already have a strong focus on
streamlining their processes and making the most of every manufacturing operation, but small
manufacturing companies still have work to do in this area. As a result, plan, schedule, and
control a production that will enable you to run your business in order to meet its objectives.

What is the difference between planning and scheduling in production?

Production planning and scheduling are remarkably similar. But, it is critical to note that
planning determines what operations need to be done and scheduling determines when and
who will do the operations.

What is a production plan?

A product or service's production planning is the process of creating a guide for the design and
manufacture of a given product or service. Production planning aims to help organizations
make their manufacturing processes as productive as possible.

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Your Guide to Production planning and control in manufacturing

Effective production planning and control are essential ingredients for any form of
manufacturing. Whether making one-off items in a jobbing shop or mass-producing consumer
goods, poor planning and control leads to unplanned stoppages that disrupt delivery dates.

A production planning and control definition has two elements:

 Production planning

 Production control

Production planning includes:

 Determining demand

 Establishing production capacity and how to meet demand

 Identifying raw material requirements

 Preparing a workable production plan

Production control includes:

 Monitoring production

 Measuring performance

 Initiating corrective action as required

This definition deliberately includes activities that belong to other disciplines such as sales and
marketing, as well as raw material procurement. The reason is that effective production
planning and control doesn't happen in a vacuum, but is part of an integrated approach that
considers all production planning and control responsibilities; it's not just a part of the business.

Key Production Planning and Control Activities

Determining demand
One of the first steps in production planning and control is determining demand. Usually
performed by sales and marketing, demand planning is crucial in that it determines the required
production capacity and raw material requirements. While erroneous demand forecasts
undermine profitability, it's surprising how many executives still rely on gut feel when deciding
future demand. Perhaps it’s because they don't have the right tools to analyze sales information
and arrive at data-driven decisions.

Establish available production capacity and determine how to meet demand

The next step is to consider the available production capacity, especially in terms of:

 Absolute production capacity

 Demand volume

 Timing of the demand

This information helps determine whether there's sufficient capacity to meet demand. The ideal
is to match capacity to demand, which is relatively simple if demand is steady. Unfortunately,
this is rarely the case, with peak demand occurring during well-defined periods such as over
Christmas or such as planting and reaping times in the case of agricultural equipment
manufacturers. In most instances, management needs to consider demand shaping to optimize
supply and demand.

Determine raw material stock requirements

Once the overall production plan is settled, it's time to consider raw materials procurement. The
starting point is the bill of materials (BOM). It's the procurement department's responsibility to
procure items required for each build so items arrive in time to meet production requirements.
This is sometimes a balancing act, as some items are unique or may have long lead times,
whereas others are off-the-shelf items.

Run MRP and prepare a workable plan

Most large organizations use Materials Resource Planning (MRP) to determine production
sequences and detailed material requirements to satisfy the build. MRP solutions also have the
ability to determine the complex sequence of operations to produce each item; this is also
known as routing.

Besides MRP, other production planning tools for improving production efficiency exist such
as Kanban, Just in Time (JIT), Optimized Production Technology (OPT) and Flexible
Manufacturing Systems (FMS). Each has its strengths and specific objectives. Some, such as
Kanban, are largely manual systems, while others use sophisticated algorithms to manage
production scheduling.

Balancing Supply and Demand

While the overall concept of production planning and control is simple, in reality it's a
fiendishly complex and difficult-to-control process. Late delivery of critical components can
stop production lines, as can quality control issues, unplanned downtime and labor shortages.

Production management needs support, as they often have to make decisions on the run with
little time to consider alternatives. Unfortunately, conventional planning tools are relatively
inflexible and, as they generally update overnight, can't provide immediate answers. This
means many managers turn to spreadsheets to determine the best solution, a process that can be
cumbersome and prone to errors. Often, the only practical answer appears to be costly
measures such as unplanned overtime to meet production schedules.

A New Alternative: Production Planning and Control Optimization

While these measures may work, their impact on operating costs is significant. What if
production managers could quickly consider alternative scenarios and discover optimal
solutions that reduce overall costs as well as answer other production planning and control
questions?

As fanciful as this may seem, this is exactly what many large organizations are doing through
leveraging prescriptive analytics to find data-driven answers to production challenges. For
example, Unilever achieved radical savings in capacity planning and production allocation
through using prescriptive analytics for modeling their production lines.

How Does Optimization Modeling Work?

An optimization model uses mathematical techniques such as linear, mixed integer, nonlinear
and constraint-based programming to determine the best answer to a complex scenario. Using a
modeling language or platform, it's possible to prepare a digital model to accurately reflect how
your production line and business functions. Solver software then allows you to evaluate
different scenarios and determine the optimal values for objective functions such as profit,
operating cost or ROI.
Where Can This Be Applied in Production Planning and Control?
Because the model accurately reflects the organization, it's possible to run different scenarios to
determine which of several alternative actions offer the best result. Here are three production
planning and control examples.

Determining the best way to optimize production while minimizing costs

Optimization modeling allows managers to move away from error-prone spreadsheets and
discover the real secrets to boosting production planning. This includes the ability to run
scenarios to find the best way to optimize production while minimizing operating costs.

To understand the supply chain and determine appropriate stock levels

Optimization modeling allows you to dynamically determine optimal stock levels for any
situation, freeing you from the tyranny of static solutions based on the day's stock as well as the
limitations of ABC stock analysis. It helps you optimize supply chain management and answer
important supply chain management questions.

Integrate supply, demand, production and financial planning

By modeling the entire organization, it's possible to integrate and optimize supply and demand
planning simultaneously. This holistic view of the organization opens up numerous
possibilities that would never be apparent when functions operate in silos. In this way, changes
in demand are reflected in supply production requirements so that changes made by one
functional manager are immediately apparent throughout.
Production Planning and Control: Meaning, Examples And Need

In large manufacturing operations, production planning and control are vital to maintaining the
highest levels of product quality. The production planning process is the act of developing a
plan for guiding products or services through all the stages of their lifecycle.

Production planning and control is a management system that plans how and when a product
should be produced or a service provided over time so that it meets customer demand while
making the business profits.
Let’s inspect the production planning and control meaning further.
 1. Production Planning And Control Meaning
2. Need Of Production Planning And Control
3. Steps For Successful Production Planning
4. Production Planning Approaches
5. Production Planning And Control Example

Production Planning And Control Meaning

The production planning and control meaning is a broad one that encompasses plans for the
production of all kinds of products or services.
Here’s a simple production planning and control example: A factory produces handbags. The
management plans the production of a number of bags based on demand forecasts for each
design seasonally. Using the right material and resources, such as leather for each item, the
bags are made in the factory. Then these are dispatched to the customer and other retailers.
That entire cycle is made possible by production planning and control.
The need of production planning and control is easy to understand if we examine its key
objectives:
 Inventory, Supply Chain Issues And On-Time Product Delivery All Hinge On A
Closely Calibrated Production Schedule
 Properly Managed Production And Inventory Helps Meet Demand While
Maximizing Profits
 A Smooth Production Process Guarantees Customer Satisfaction By Making
Possible The Best Quality In A Timely Manner
Having clarified the production control and design meaning, let’s look at some use cases.
Need of production planning and control
Within an organization, there are several functions that have a need of production planning and
control. Here are a few:
1. Decision Making
Production planning aids in decision-making. when we understand current demands
and trends, it helps management decide what new products or services are needed.
this data in turn informs the product design, marketing and delivery.
2. Production Levels
By Planning Every Stage Of The Production Process, Managers Will Know How
Much Stock They’ll Need. Keeping Enough Stock On Hand To Fulfill Demand, But
Not So Much That It Becomes Expensive To Store, Is A Key Part Of Production
Planning And Control. While Product Shortfalls Can Spell Disaster For A Brand,
Surplus Can Lead To Expensive Damage And Waste.
3. Resource Management
A Production Plan Accounts For Direct Materials, Semi-Finished Goods, Finished
Goods And Work-In-Process Inventory. Production Planning And Control Can
Analyse How Much Of Each Is Required Per Month As Well As If The Quantity
Suffices For Meeting Demand.
 4. Cost Elements
Production cost elements are all the factors that go into making a product. these
include labour, materials, equipment, facilities costs and energy costs. there’s also a
cost associated with the disruption of production due to acquiring raw materials,
equipment problems and setting up temporary storage capacity.
5. Cost Of Operations
Not Only Are The Costs Of All The Inputs Considered, But Production Planners
Also Have To Weigh These Against Factors Such As Revenue, Sale Price And
Break-Even Point. Production Planning Is All About Optimizing Costs And
Increasing Profits.
6. Order Fulfilment
Only with careful planning through the entire cycle can a business ensure its orders
are shipped in time. managing inventory and shipping schedules are a crucial part of
this planning. if shipments are backed up, warehouses can grow overcrowded and
this is an expensive problem to solve. similarly, delays in delivery can cause a poor
customer experience.
Unless we plan every part of the production process in advance, it’s impossible to deliver on
time. Production planning is thus a core part of running a successful enterprise.
Steps For Successful Production Planning
The need of production planning and control is to provide a schedule for businesses to follow
to ensure all elements required for production work together. Production planning and
control can be set up as a series of steps:
1. Routing
routing answers the questions of how much of a product will be made. what are the
inputs that will be needed to ensure success? it’s concerned with the path that all
components and elements take during the entire production process. if a part is
needed, should it be made or sourced? what’s the bill of materials that will be
needed for its manufacture? what’s the design? what are the product tolerances? the
details will depend on what’s being made and the mode of manufacture/product
creation.
2. Scheduling
once the core plan is in place, it’s on to the how. scheduling is when the order of the
steps for the work to be completed is decided. the work and workloads are part of
this stage of production planning and control. it’ll also determine when in the year
to build up inventory in anticipation of increased demand for products or services.
deadlines are put in place here, too.
3. Dispatching
in most production planning and control examples, this is where the actual work
gets done. the production process is underway, the systems are monitored and
records are kept of production and how the equipment is being utilized.
 4. Follow-up
this is where the process of production is evaluated. were there problems in the
production process? were there any bottlenecks that need to be addressed? these will
then determine if any changes need to be made in the routing, scheduling, or
dispatching stages.
The more accurate and tight the schedule, the less the waste and the more the profits.
Production Planning Approaches
There are two dominant approaches to production planning: control-oriented and optimization-
oriented. The first attempts to control the variables in the production system, while the second
attempts to maximize output. Depending on the needs of the organization, they can engineer
the processes to suit their needs. Here is how different sectors approach the production
planning and control meaning:
1. In Manufacturing
Production Planning And Control is a very effective tool in a manufacturing
operation. it helps understand the production process better and how an organization
can get more out of every stage. one critical aspect of production management is that
it helps avoid overproduction that can lead to waste and also guards against poor
quality output. through effective production planning, manufacturers can minimize
wastage, improve the accuracy of their service and enhance customer satisfaction.
2. in service
production planning can also apply to services. the product isn’t physical, but a
service too has to be delivered in a time-bound way with a fixed roster of inputs. for
instance, a call center that deals with both inbound and outbound calls can use
production planning to optimize its workflows so it can effectively serve its
customers. it can optimize the use of its office space, human resources, data, server
space and more.
though its use may be wider and more common in the manufacturing sector, a production plan
can help in service industries too.
production planning and control example
here are some production planning and control examples:
1. a fast-moving consumer goods major uses production planning and
control models in its supply chain to help in deciding what product or service is
needed in which region based on historic data. when they met with unprecedented
demand for packaged, ready-to-eat foods during the covid-19 pandemic, they found
themselves unprepared. by quickly revising the production plan, they could respond
in the following quarter in this production planning and control example
2. a large consumer electronics brand had a target of increasing sales of videos,
gadgets, and other electronic devices. the managers had some concerns about
whether they could meet the demand if the sales teams delivered. when they looked
closely at existing and upcoming inventory, it was clear they might run out of stock
by the end of the year. production planning and control were amended to reflect
the enhanced needs
 3. a printing firm was planning to expand its business. its production planning and
control system needed predictions of the amount of paper, ink, labels, envelopes,
and other supplies needed. the sales manager estimated sales would increase by 40
percent on an annual basis. production planners then planned how much to produce
or buy for each month during that period. when it was clear paper shortages would
not end soon, the organization raised its prices
Production planning and control systems are often calibrated to generate predictions. It
analyzes actual data from history or rate of change information to make predictions for future
events. This can help management make informed decisions.
Understanding the production planning and control meaning is one of the first steps to creating
an efficient workplace. Learning from production planning and control example and the theory
will help professional progress.
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Organization learning pathway is here for you. How you work in a team, how you lead and
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as Scope-Quality-Time-Cost and how to execute with agility, are essential to mastering
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