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Presented by:
Pradeep Mehta
41054
Div-A
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Introduction
Indian companies have started lookingIndian companies have started looking
beyond traditional sources for raw materialbeyond traditional sources for raw material
and manpowerand manpower
The result: a new supply chainThe result: a new supply chain
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Do you Know ?
Last year,Tata Motors bought components worthLast year,Tata Motors bought components worth
Rs 1000 crore (7.74 per cent of total raw materialsRs 1000 crore (7.74 per cent of total raw materials
consumed) from abroadconsumed) from abroad While the company sources steel from countriesWhile the company sources steel from countries
such as Russia, China, Japan & South Korea, itsuch as Russia, China, Japan & South Korea, it
procures auto components from Malaysia, China,procures auto components from Malaysia, China,
South Africa and ThailandSouth Africa and Thailand
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Emami sources peptides (used in fairnessEmami sources peptides (used in fairness
products) from the US and lipopearls (usedproducts) from the US and lipopearls (used
in skin products) from Spain. It also sourcesin skin products) from Spain. It also sourcesraw material from South Korea, Singaporeraw material from South Korea, Singapore
and Chinaand China
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Tata Steel, Ispat and JSW Steel are eyeingTata Steel, Ispat and JSW Steel are eyeing
the rich coal deposits of South Africa,the rich coal deposits of South Africa,
Nigeria and Mozambique for securing hardNigeria and Mozambique for securing hardcoking coal to run their plants in Indiacoking coal to run their plants in India
Tata Steel already sources its cokeTata Steel already sources its coke
requirements from Australia as Indian cokerequirements from Australia as Indian cokehas a very high ash contenthas a very high ash content
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Contents
IntroductionIntroduction
What is Sourcing-Types of SourcingWhat is Sourcing-Types of Sourcing
Global Supply Chain-ObjectivesGlobal Supply Chain-Objectives Factors affecting choice of global supplierFactors affecting choice of global supplier
Advantages of Global SCMAdvantages of Global SCM
Why Indian cos. Are going GlobalWhy Indian cos. Are going Global Challenges in Building a Global SCMChallenges in Building a Global SCM
Tools in SourcingTools in Sourcing
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Definitions
SourcingSourcing refers to a number of procurementrefers to a number of procurement
practices , aimed at finding, evaluating andpractices , aimed at finding, evaluating and
engaging suppliers of goods and servicesengaging suppliers of goods and services
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Definitions
Global sourcingGlobal sourcing is a procurement strategyis a procurement strategy
aimed at exploiting global efficiencies inaimed at exploiting global efficiencies in
production.production. While a global sourcing process is usuallyWhile a global sourcing process is usually
initiated as a mechanism of exploitinginitiated as a mechanism of exploiting
cross-geographic arbitrages,it is now across-geographic arbitrages,it is now astandard step in the global expansion ofstandard step in the global expansion of
firms.firms.
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Definitions
Low-cost country sourcingLow-cost country sourcing: a procurement: a procurement
strategy for acquiring materials fromstrategy for acquiring materials from
countries with lower labour and productioncountries with lower labour and productioncosts in order to cut operating expensescosts in order to cut operating expenses
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Strategic sourcingStrategic sourcing is a procurementis a procurement
process that continuously improves and re-process that continuously improves and re-
evaluates the purchasing activities of aevaluates the purchasing activities of acompanycompany
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Steps in Strategic Sourcing
Assessment of a company's current spendAssessment of a company's current spend
Assessment of the supply marketAssessment of the supply market
Development of a sourcing strategyDevelopment of a sourcing strategy
Identification of suitable suppliersIdentification of suitable suppliers
Negotiation with suppliersNegotiation with suppliers Implementation of new supply structureImplementation of new supply structure
Track results and restart assessmentTrack results and restart assessment
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What is a Supply Chain ?
The facilities, functions, and activitiesThe facilities, functions, and activities
involved in producing and delivering ainvolved in producing and delivering a
product or service, from suppliers toproduct or service, from suppliers to
customerscustomers
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Dynamics of Material Flow
Supplier Plant Warehouse Logistics Retailer
http://images.google.co.in/imgres?imgurl=www.beammacktrucks.com/truck.jpg&imgrefurl=http://www.beammacktrucks.com/&h=222&w=278&prev=/images%3Fq%3Dtruck%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8http://images.google.co.in/imgres?imgurl=www.beammacktrucks.com/truck.jpg&imgrefurl=http://www.beammacktrucks.com/&h=222&w=278&prev=/images%3Fq%3Dtruck%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8http://images.google.co.in/imgres?imgurl=www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/supplier-photo-1.jpg&imgrefurl=http://www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/&h=225&w=295&prev=/images%3Fq%3Dsupplier%26start%3D40%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/supplier-photo-1.jpg&imgrefurl=http://www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/&h=225&w=295&prev=/images%3Fq%3Dsupplier%26start%3D40%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/supplier-photo-1.jpg&imgrefurl=http://www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/&h=225&w=295&prev=/images%3Fq%3Dsupplier%26start%3D40%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/supplier-photo-1.jpg&imgrefurl=http://www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/&h=225&w=295&prev=/images%3Fq%3Dsupplier%26start%3D40%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=dmoz.org/img/moz/factory.gif&imgrefurl=http://dmoz.org/Business/&h=150&w=200&prev=/images%3Fq%3Dfactory%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=dmoz.org/img/moz/factory.gif&imgrefurl=http://dmoz.org/Business/&h=150&w=200&prev=/images%3Fq%3Dfactory%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=dmoz.org/img/moz/factory.gif&imgrefurl=http://dmoz.org/Business/&h=150&w=200&prev=/images%3Fq%3Dfactory%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.objectwarehouse.com/images/splash/warehouse.gif&imgrefurl=http://www.objectwarehouse.com/&h=141&w=163&prev=/images%3Fq%3Dwarehouse%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.objectwarehouse.com/images/splash/warehouse.gif&imgrefurl=http://www.objectwarehouse.com/&h=141&w=163&prev=/images%3Fq%3Dwarehouse%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DN8/14/2019 Local Demand,Global Supply
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Dynamics of Order Flow
Supplier Plant Warehouse Logistics Retailer
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Supply Chain Planning Processes
Demand PlanningMaterial Requirement Planning
Demand Forecasting
Supplier Plant Warehouse Logistics Retailer
Production
Plan
Component
Requirement
Order Management
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Supply Chain Planning Decisions
OPERATIONAL
TACTICAL
STRATEGIC
Procurement DistributionManufacturing Logistics
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What is a Global Supply Chain ?
The global supply chain is made up of theThe global supply chain is made up of the
interrelated organizations, resources, andinterrelated organizations, resources, and
processes that create and deliver productsprocesses that create and deliver productsand services to end consumersand services to end consumers
In the instance of global supply, the chain isIn the instance of global supply, the chain is
extended to many different countriesextended to many different countriesaround the worldaround the world
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Suppliers
(International)1.2 Million PC/Yr.
Glasgow U.K.
Warehouse
Port
PC Assembly
Plant
13 Transshipment
Points (TPs) in Europe
Country-wide
Distribution
Centers (DCs)
Retailers
Example of a Typical Supply Chain: IBM Europe PC Supply Chain
http://images.google.co.in/imgres?imgurl=www.objectwarehouse.com/images/splash/warehouse.gif&imgrefurl=http://www.objectwarehouse.com/&h=141&w=163&prev=/images%3Fq%3Dwarehouse%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.beammacktrucks.com/truck.jpg&imgrefurl=http://www.beammacktrucks.com/&h=222&w=278&prev=/images%3Fq%3Dtruck%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8http://images.google.co.in/imgres?imgurl=www.beammacktrucks.com/truck.jpg&imgrefurl=http://www.beammacktrucks.com/&h=222&w=278&prev=/images%3Fq%3Dtruck%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8http://images.google.co.in/imgres?imgurl=www.beammacktrucks.com/truck.jpg&imgrefurl=http://www.beammacktrucks.com/&h=222&w=278&prev=/images%3Fq%3Dtruck%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8http://images.google.co.in/imgres?imgurl=www.objectwarehouse.com/images/splash/warehouse.gif&imgrefurl=http://www.objectwarehouse.com/&h=141&w=163&prev=/images%3Fq%3Dwarehouse%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.objectwarehouse.com/images/splash/warehouse.gif&imgrefurl=http://www.objectwarehouse.com/&h=141&w=163&prev=/images%3Fq%3Dwarehouse%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.moc.noaa.gov/al/photos/ship.jpg&imgrefurl=http://www.moc.noaa.gov/al/photos/photos2.htm&h=427&w=640&prev=/images%3Fq%3Dship%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8http://images.google.co.in/imgres?imgurl=www.moc.noaa.gov/al/photos/ship.jpg&imgrefurl=http://www.moc.noaa.gov/al/photos/photos2.htm&h=427&w=640&prev=/images%3Fq%3Dship%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8http://images.google.co.in/imgres?imgurl=www.objectwarehouse.com/images/splash/warehouse.gif&imgrefurl=http://www.objectwarehouse.com/&h=141&w=163&prev=/images%3Fq%3Dwarehouse%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.objectwarehouse.com/images/splash/warehouse.gif&imgrefurl=http://www.objectwarehouse.com/&h=141&w=163&prev=/images%3Fq%3Dwarehouse%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.objectwarehouse.com/images/splash/warehouse.gif&imgrefurl=http://www.objectwarehouse.com/&h=141&w=163&prev=/images%3Fq%3Dwarehouse%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.objectwarehouse.com/images/splash/warehouse.gif&imgrefurl=http://www.objectwarehouse.com/&h=141&w=163&prev=/images%3Fq%3Dwarehouse%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.moc.noaa.gov/al/photos/ship.jpg&imgrefurl=http://www.moc.noaa.gov/al/photos/photos2.htm&h=427&w=640&prev=/images%3Fq%3Dship%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8http://images.google.co.in/imgres?imgurl=www.lot-co.mksat.net/img/pic/dbsp_main.jpg&imgrefurl=http://www.lot-co.mksat.net/dbsp.html&h=198&w=298&prev=/images%3Fq%3Dsea%2Bport%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8http://images.google.co.in/imgres?imgurl=www.beammacktrucks.com/truck.jpg&imgrefurl=http://www.beammacktrucks.com/&h=222&w=278&prev=/images%3Fq%3Dtruck%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8http://images.google.co.in/imgres?imgurl=www.atp.nist.gov/eao/sp950-1/autobody01.jpg&imgrefurl=http://www.atp.nist.gov/eao/sp950-1/abc.htm&h=360&w=360&prev=/images%3Fq%3Dassembly%2Bplant%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/supplier-photo-1.jpg&imgrefurl=http://www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/&h=225&w=295&prev=/images%3Fq%3Dsupplier%26start%3D40%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/supplier-photo-1.jpg&imgrefurl=http://www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/&h=225&w=295&prev=/images%3Fq%3Dsupplier%26start%3D40%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/supplier-photo-1.jpg&imgrefurl=http://www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/&h=225&w=295&prev=/images%3Fq%3Dsupplier%26start%3D40%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DNhttp://images.google.co.in/imgres?imgurl=www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/supplier-photo-1.jpg&imgrefurl=http://www.cubic.com/cds/_Ops-Mfg%2520Web%2520Page/ops_mfg/home_pg/photos/&h=225&w=295&prev=/images%3Fq%3Dsupplier%26start%3D40%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DN8/14/2019 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Objectives of Global Supply
chain Optimize pre and post-production inventoryOptimize pre and post-production inventory
levelslevels
Obtain greater efficiency from labourObtain greater efficiency from labour Obtain greater efficiency from equipmentObtain greater efficiency from equipment
and spaceand space
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Objectives of Global Supply
chain Flexible planning and control mechanismsFlexible planning and control mechanisms
Prompt and reliable delivery of high-qualityPrompt and reliable delivery of high-quality
products and services at the least costproducts and services at the least cost To effectively meet rising customerTo effectively meet rising customer
expectationsexpectations
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Factors affecting choice of global
suppliers QualityQuality
CostCost
Geographical proximityGeographical proximity
DiversityDiversity
Internet & Technological changesInternet & Technological changes
Proliferation of trade agreementsProliferation of trade agreements
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Advantages of Global SCM
Help companies compete all over the worldHelp companies compete all over the world
Expand business operationsExpand business operations
Competitive advantageCompetitive advantage
Offer new services and applications to meetOffer new services and applications to meet
global customers needsglobal customers needs
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Why Indian companies are now
looking to source globally ?
Indias Balance of PaymentsIndias Balance of Payments
Export revenuesExport revenues
Rupee appreciating against dollarRupee appreciating against dollar
Global AcquisitionsGlobal Acquisitions
Building global manufacturing footprintBuilding global manufacturing footprint
uncover new and interesting supplieruncover new and interesting supplier
leadsleads
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Why Indian companies are now
looking to source globally ?
Pricing-pressure from low-cost competitorsPricing-pressure from low-cost competitors
The Cost factorThe Cost factorEg. Nitco TilesEg. Nitco Tiles
Government PoliciesGovernment Policies
Licensing, Quotas and ProhibitionsLicensing, Quotas and Prohibitions
Reduction in import dutiesReduction in import duties
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Challenges in building a Global
SCM Finding the Right SupplierFinding the Right Supplier Committing large volumes to new suppliersCommitting large volumes to new suppliers Integration of domestic and Global SCMIntegration of domestic and Global SCM Retaining the interest of global suppliersRetaining the interest of global suppliers Changing Product RequirementsChanging Product Requirements
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E-sourcing
Locating suppliers can be a humongous jobLocating suppliers can be a humongous job
Companies discover substantial savingsCompanies discover substantial savings
using technology to source raw materialsusing technology to source raw materials
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E-sourcing
Over the last four years, Indian companies likeOver the last four years, Indian companies like
Tata Motors, Dabur, Crompton Greaves and theTata Motors, Dabur, Crompton Greaves and the
Dalmia Group have used B2B applications toDalmia Group have used B2B applications tosource goods worth Rs 40,000 crore ($8.88source goods worth Rs 40,000 crore ($8.88
billion)billion)
Ariba, a Sunnyvale, California-based spendAriba, a Sunnyvale, California-based spend
management company, accounted for Rs 30,000management company, accounted for Rs 30,000crore ($6.66 billion) or 75 per cent of the totalcrore ($6.66 billion) or 75 per cent of the total
spend. Total savings are estimated at $1.20 billionspend. Total savings are estimated at $1.20 billion
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About Ariba
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Software Packages
i2 Six: A comprehensive solution suite for spend/production/ revenue/ logistics/ fulfillment optimization
Solution suites for network design & optimization/manufacturing planning & scheduling/ global logisticsmanagement/ service & parts management
JD EDWARD:The advanced planning softwareto synchronize demand & planning/ networkOptimization/ production & distribution planning
http://www.peoplesoft.com/corp/en/public_index.jsphttp://www.i2.com/index.cfm8/14/2019 Local Demand,Global Supply
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Software Packages
ARIBA Spend Management: It helpscompanies driving down enterprise wide spend
mySAP SCM: A complete supply chainplanning solution
iBann: A complete solution suite from demandcollaboration to order management
http://www.ascet.com/documents.asp?d_ID=1988http://www.sap.com/index.asphttp://www.ibm.com/8/14/2019 Local Demand,Global Supply
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Results
Companies that
utilized best-in-
class SCM solutions
have
Reduced inventory levels by 10-15%
Reduced markdown & scrap by 10-15%
Improved delivery reliability by 95-95%
Used resources10-20% more efficiently
Reduced transportation cost by 10-15%
Reduced cycle time by 10-20%
Reduced outages to 0-5%
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Thank You !!!Thank You !!!
