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How TMS Technology Can Benefit a Supply Chain

While operating in a progressively complex logistics world, companies in this day and age need all the help they can get to help them work smarter, easier and more efficiently. Customers are becoming increasingly more demanding, and the need for more improved supply chain visibility continues to pose a challenge for companies. Technology like Transportation Management Systems (TMS) is now more important than ever. The TMS plays a crucial role in helping shippers overcome these challenges and thrive in the increasingly competitive logistics industry.

TMS for supply chain

Since more and more additions to TMS are continuously being tested for the future, it is important that your business isn’t left behind. Here are some reasons we believe investing in a TMS could be beneficial to your supply chain.

 What is TMS?

A transportation management system (TMS) is a subset of supply chain management (SCM) that deals with the planning, execution, and optimization of the physical movements of goods. In simpler terms, it’s a logistics platform that enables users to manage and optimize the daily operations of their transportation fleets.

The Value of TMS for Supply Chain Management

A TMS helps shippers move loads from point A to point B in the most cost-effective and rational ways possible. Hiccups – such as empty return trailers or half-loaded containers – can be avoided by using a TMS’ technology, which analyzes and identifies the best possible situations and sends that information to dispatchers automatically. Traditional tools such as phone calls, paper, and fax machines have become virtually obsolete.

Some additional advantages that a TMS provides include:

  • Improved supply chain analytics
  • Carrier selection based on transit times, shipping costs, etc.
  • Better warehouse efficiencies
  • Decreased data entry errors – less wasted time fixing mistakes
  • Combine it with a Warehouse Management System (WMS) to achieve more supply chain visibility
  • Reduced inventory and greater confidence with customer tracking
  • Enterprise Resource Planning (ERP) integration to minimize manual data input

Most users primarily rely on a TMS to lower their freight costs. However, there are many other benefits. For example, a TMS’ report and analytics program can identify if the lowest-cost carrier is really delivering on time – all the time. If not, the shipper could be wasting time, money and resources, which cancels out any chance of any savings on rates. So, less employee time spent on transportation management translates to more time spent on other issues.

A smart supply chain manager will do everything they can to make sure there are optimal visibility and communication among all pieces to this puzzle. A TMS allows you to increase margins while maintaining quality, providing a tool that coordinates and maximizes your chain output and efficiency.

 

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When To Replace Your TMS System

Deciding when you should replace your transportation management system (TMS) can be tricky. You don’t want to wait until the software begins to hold you back and affects the visibility of your supply chain. Many companies TMS’s enable some planning, optimization and routing tasks. Many new systems are delivering so much more than what is necessary to help make your job easier.

A transportation management system is designed to help with the planning, execution, and optimization of the physical movements of goods. It is a logistics platform that allows users to manage and optimize the daily operations of their supply chain. When deciding to switch to a new TMS system, it is important to consider these three factors:

How does your organization plan to grow?TMS system

If you have plans to continue to grow your business, changing to a more integrated TMS might be a good option for your company. You should think about your business and where you want it to go, and what technology you will need to help you get there.

 

How easy are integrations of TMS system?

If your TMS system is weak, it might be time to consider upgrading to a newer system. If you have to buy separate modules or use third-party tools and monitoring services, you’re paying extra costs that could be eliminated with a new system. Do your research before switching to a new platform to make sure that it is the best move for your business.

Do you struggle when constraints and factors change?

Does your company do well with conflict and adjust well to change? If the answer is no, then switching to a new TMS system might not be the best option for your business until it is necessary for your business success. If your optimization and route planning aren’t powerful enough to recalculate the best routes and options in real time, and can’t give you visibility into your best alternatives, it may be time to replace your TMS.

A TMS can help a company maximize achievable freight savings while adhering to pick up and delivery limitations. Using a TMS can improve customer service and eliminate your need for warehouse or distribution centers.

 

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Benefits of a Transportation Management System (TMS)

Many companies could easily improve their supply chains by utilizing a transportation management system (TMS). Some companies chose not to use a TMS, and other companies may just not have a good understanding of what exactly a TMS is. It is important to know exactly what a TMS is and how it can help your company save money and time.

What is a TMS? benefits of tms

A TMS is a tool that can help companies and supply chain professionals manage their freight and carriers. The TMS helps the user find the best mode and rate for any type of shipment to make sure that they are getting the best deal possible. The main features of a TMS include features like rating, booking, and tracking. One of the benefits of TMS is that it allows its users to automate order entry, create shipments, optimize shipments and routes, manage carriers, schedule pickups, and deliveries, manage the yard and communicate effectively with all supply chain stakeholders.

What are the benefits of TMS?

Time Savings

Instead of doing manual work or sending disjointed emails, shippers can instantly access the information they need through a single digital platform. The TMS let shippers compare rates side by side and make strategic choices regarding their shipment.

Improved Customer Service

A TMS helps a supply chain run smoothly and make the tracking information as transparent as possible. Shippers can inform their customers of shipment changes (late or missed deliveries) through the TMS to keep a positive relationship between the shipper and the customer.

Business Growth

Companies that use a TMS have a competitive advantage against competition and see many opportunities to grow their business.

Using a TMS is a great resource to help manage your supply chain. PLS offers a TMS known as PLS Pro to help shippers effectively manage and monitor their shipments and supply chain. For more information about PLS Pro, please click here.

The Features of an Effective Transportation Management System

Sometimes technology can be frustrating, but with the right product, it doesn’t have to be. An effective Transportation Management System (TMS) can relieve frustration out of your day if you’re a shipper, carrier, or 3PL.

A TMS combines the latest technology in an easy formula to make a one-stop-shop. It can offer the most value to a shipper and provide the unlimited strategic potential for all parties along the supply chain.

3PLs have recognized opportunities where they can create positive change within their business by introducing a TMS that provide a large range of functions. With greater visibility, shippers are given more detailed information for their viewing when they are organizing a shipment through their chosen 3PL. 3PLs also will see increased efficiency, streamlined business decisions, and satisfied customers.

effective transportation management system

Each system has its own features that differentiate it from others. Knowing what features work best for you will vary as well. Here is a list of just some of the features that an effective transportation management system can offer to your business:

Carrier Contact Management

  • Allows the ability to view and compare contracts and costs with ease through the use of digitalized contacts
  • Real-time tracking of terms and agreements
  • Contract alerts when it’s time for renewal

Reporting and Analytics

  • Offers scrubbed invoices that allow for thought-out business decisions on things like freight spend
  • Optimized historical shipment data for greater referencing
  • Displays distribution patterns
  • Review of industry trends
  • Insights into demand/order forecasts

Risk Management

  • Automates the auditing process
  • Generates reports as seen above to minimize potential risks
  • Allows the ability to build contingency plans ahead of time
  • Can be set with automatic alerts

Visibility

  • Ability to track and trace shipments from pickup to delivery
  • Status update notifications
  • Auto pick up
  • Integration with a carrier using EDI
  • Display of costs and additional charges allowing an easy opportunity to compare
  • Estimations on the cost of delivery

Business Monitoring

  • Review performance metrics
  • Review key performance indicators (KPIs)
    • On-time performance
    • Lane analysis
    • Volume trends
    • Cost per mile
    • Cost per Ton
    • Financial reporting

 

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Beginner’s Guide to PLS PRO, Transportation Management System

guide to transportation management systemTMS software is credited for saving companies money; those who manage transportation poorly spend $53 for every $1,000 of total spend on outbound transportation, while those utilizing a TMS only spend $6.35 per $1,000.

PLS created a SaaS-based software, PLS PRO, that is highly configurable, adaptable and dynamic. PLS PRO is an online transportation management tool that enables shippers to oversee, operate and adjust shipments using a centralized network – regardless of shipment size or customer requirement. PLS built PLS PRO to be a simple, effective way to monitor logistics processes.

Guide to Our Transportation Management System, PLS PRO

“Our TMS allows clients to spend less time managing freight movements and focus on their core business objectives,” says Greg Burns, PLS CEO, and President. PLS PRO can integrate and modify changes seamlessly and quickly. PLS PRO displays visibility across a client’s portfolio of shipments and functions through a centralized database, providing actionable intelligence on the data.

Case Study: A leading scaffolding, insulation and fireproofing company responsible for job site deliveries with multi-shipment orders incorporated PLS’ proprietary TMS, PLS PRO. As a result, the client saw an 11% cost reduction in core carrier program freight costs, a 5% cost reduction in overflow shipments, and eliminated monthly payments to a third party payment service provider. The client achieved their 98% on-time delivery goal while improving operational efficiency through online shipment requests and dock scheduling.

Read: Case Study, Manufacturer Reduces Freight Spend through Automation

Clients today want self-service technologies to empower decision-making. Burns says, “They do not want to go and talk to 100 trucking firms. They want a technology that allows them to quickly find the best trucking firm specific to their needs, with the best service performance.”

Capabilities

PLS PRO enables managers to control, design and fine-tune their transportation across various locations. With the PLS PRO TMS software, shipper-clients can choose the highest or lowest priced carrier, can limit options to its three most-preferred carriers, and choose a carrier based on location. The TMS’ dock scheduling and management module plan the dock for reloading, tracking, and tracing. The optimization engine monitors transported shipments, a truck’s capability to contain the shipment and optimization of routes. Users can analyze KPIs and keep specific metrics on the dashboard.

TMS technology supports a shipper’s desire to lower transportation rates – with the help of a TMS, shippers remove inefficiencies and focus on more efficient modes, lanes, and processes.Top 3PL Tech Logo.jpg

PLS Logistics Services was featured in Logistics Tech Outlook magazine in November 2016 as the company of the month, a top 3PL technology solutions provider, and a transportation and technology service provider that offers shippers dependable, cost-effective solutions. Click here to read the full article.

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4 Common Myths about TMS Software

Despite the common TMS myths, it lets companies understand their processes while reducing costs, and forecasting accurate demand.

Here are 4 popular misconceptions about TMS:

Software as a service (SaaS) transportation management system (TMS) solution doesn’t add value, is expensive, and doesn’t present ROI for years.

  • TMS sanctions effective and fast decision making. It has a customizable interface, streamlines operations, reduces carrier overhead charges, optimizes routes, and has track and trace features.
  • A TMS identifies supply chain pain points and logistics challenges that might have been disregarded.
  • The SaaS model of TMS software requires little to no IT or monetary investment, unlike traditional software. SaaS solutions don’t require costly upgrades. With a SaaS solution, the shipper’s organization pays for what is used.
  • Implementing a TMS creates immediate ROI because it takes away the manual processes. A TMS enables better processes, delivering better customer service at a lower cost. In a 2011 ARC Advisory group survey, 40% of respondents felt that TMS software offers a strong ROI and that if they were to give up their TMS and go back to manual processes, their total freight spend would increase.

For centralized TMS software, you can’t partner with a 3PL

  • When shippers use a 3PL in tandem with a TMS, shippers can greatly benefit. The 2016 Third-Party Logistics Study shows that 73% of shippers indicate they are increasing use of outsourced logistics services this year, which compares to a figure of 68% reported in 2015.
  • A 3PL provides different levels of partnership – some companies choose full-service solutions and some companies use 3PLs for tech support or spot moves.
  • Partnering with a 3PL lets shippers focus on their core competency while 3PL experts form accurate logistics practices and monitored freight moves.
  • The 2016 Third-Party Logistics Study reveals that 73% of shippers interact with their 3PL on a daily or hourly basis, while 80% of 3PLs responded similarly.

I can’t use my preferred carriers, automate rules or use all of the data generated

  • Carrier connectivity is a major benefit of using a TMS: shippers have access to a broad network of carriers, including their preferred carriers, and shippers have the opportunity to become a carrier’s choice through simplified communication and coordination. With such direct access to a carrier network, there tms mythsis substantial ROI, since you’ll be able to find capacity whenever you need freight moved.
  • Logistics Management Research shows that TMS users achieve an average cost savings of 7.5% when they use preferred carriers, better procurement negotiations, and put low-cost mode selections to work.
  • Automation is another benefit offered by TMS technology. With automation, you will avoid making costly errors. Automated rules enable a shipper to select applicable accessorial fees, auto-filled BOL information and access to your scheduling.
  • Only 20% of the data accumulated by structured sources is easily digestible. Taking TMS data and turning it into something actionable reveals profitable results. The information is a key benefit of a TMS and helps companies predict complex situations. Even using a small percentage of the data collected will give companies the opportunity to cut costs, compare lanes and rates, find ways to improve supply chain processes.

Real-time data and visibility are just buzz words

  • Real-time data and shipment visibility are real benefits of transportation management systems. To achieve visibility that provides real-time data, companies must blend all systems and pay attention to the transportation and production details.
  • Implementing real-time data and visibility let companies understand their processes better, while reducing costs, and forecasting accurate demand. The software allows shippers to frequently run reports, receive instant notifications of disruptions and analyze historical and present data on costs and performance.

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Shipper Strategy: Factors That Will Influence 2017 Transportation Management

By 2017, the US population is expected to rise to 332 million, a 70% increase from fifty years ago. Population growth in cities is placing a strain on existing transportation systems and creating demand for more transportation choices. Industries and consumers depend on the consistent, timely flow of goods and services. The mounting volume and availability of information and the rapid development and adoption of technologies is transforming all aspects of life – including transportation.

According to a recent Transport Topics article, economist Diane Swonk said that 2016 was probably the weakest year for US growth since the Great Recession ended. The economy is moving in the right direction, but slowly. Flatbed loads have inflated by 6.6% compared with the same time last year. Refrigerated truckloads have grown, only by 0.7%, after booming by 14.3% in 2015. 

What factors and trends will impact your transportation strategy next year?

  1. Regulations
    Government trucking regulations will have a serious impact on transportation rates, trucking capacity and overall economic productivity.
    The ELD Mandate will affect about 3 million drivers and is effective in December 2017. About half of the trucking industry has already installed ELDs, but if the remaining half doesn’t put in the device, they’ll be forced to exit the industry, resulting in a major loss of capacity. Even though ELDs have constructive implications, the mandate could create logistics headaches by taking away capacity and increasing rates.

Read : 2016-2017 Trucking Regulations Aggravate Economic Trends

  1. Globalization
    Transportation connects industries; it’s the key to globalization. Today, about 1/3 of world trade consists of shipments between branches of multinational companies. Technological advances have expanded the global marketplace, highlighting the need for a transportation system that is international in reach. Faster and cheaper transportation systems allow multinational corporations to build facilities across the globe while maintaining scheduled deliveries.
    According to the US Department of Commerce, in the last 25 years, US imports and exports grew from $726 billion to $2.6 trillion. The Bureau of Transportation Statistics reports that the transportation sector represents 11% of the overall US GDP and accounts for 1 in 7 jobs in the US economy.
  1. Smart Cities
    A smart city addresses urban issues like traffic congestion through technology-based solutions. Smart cities’ transportation data is derived from multiple devices that identify speed and traffic volume, then provide traffic analysis. With a smart city, there will be more intelligent transportation management solutions so carriers can be redirected to a less congested route, traffic flow will be optimized and responses to road-incidents will be improved. Research firm IDC predicts that by 2017, at least 20 of the world’s largest countries will create smart city policies to prioritize funding and document operational guidelines.

Read : A Fully Automated Transportation Industry is Closer than You Think

  1. Safety & Autonomy
    US self-driving truck sales are forecasted to reach 60,000 by 2035, estimates IHS Automotive. That would amount to 15% of sales for trucks in the big, Class 8 weight segment. Recently, Uber acquired self-driving lorry startup Otto, and it plans to put the company to work in the long-haul freight business in 2017. Otto’s technology allows existing trucks to be fitted with self-driving technology which can handle driving on US highways.
    Self-driving trucks are able to operate 24/7, permitting much faster delivery at much lower costs. There’s significant potential for autonomous trucks to increase safety and efficiency.
    In 2011, 32,367 people lost their lives and an estimated 2.22 million people were injured in motor vehicle crashes. In the US, almost 90% of all large truck crashes in 2012 were caused from driver error like fatigue, speeding or alcohol use. Automated vehicles will help infrastructure.jpgeliminate risk and could decrease the number of accidents involving commercial vehicles.
  1. Infrastructure & Environment
    Total GHG emissions in the US increased by 21% from 1990 to 2011, with over 60% of the total increase attributed to the transportation industry. Today, the US transportation network accounts for 30% of US greenhouse gas emissions. President Obama signed into law the FAST Act to fund surface transportation programs. The FAST Act injects $305 billion into the federal transportation budget from 2016-2020. The Nation’s road network includes more than 4 million miles of public roadways and approximately 605,000 bridges. In 2010, this network carried nearly 3 trillion vehicle miles of travel.
  1. Economic Competitiveness
    Economic and job growth continue to grow at a moderate pace. The transportation sector contributed approximately $1.466 trillion, or 9.7% to GDP in 2011. Nearly 54 million tons of freight worth more than $48 billion currently moves through the US transportation network each day. Freight tonnage is expected to increase by 45% by 2040, requiring additional capacity for highways, railroads, ports. Freight transportation is an integral part of our economy, with over 44 million jobs directly dependent on the industry. Failing to make strategic plans to improve could hurt the country’s growth: one study estimates that roadway congestion delays cost shippers approximately $10 billion each year.

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Source: FY 2014-2018 DOT Strategic Plan

3 Technology Applications to Advance Your Supply Chain

The fast e-commerce environment, which is increasing competition, and the initiative to use data to analyze trends and operational efficiency are contributing to the demand for hi-tech logistics solutions. Technology is the key driver of an organization’s supply chain efficiency and success. Shippers are familiar with transportation management software (TMS) systems that give them a competitive edge. New tools like mobile apps, cloud-based software, and big data provide shippers immediate, enhanced visibility that breaks silos and generates communication, collaboration and efficiency.

  • Mobile
  • SaaS
  • Big Data

Mobile 

Mobility is an obvious advantage. With mobile, different parts of the supply chain can communicate instantly. Wireless data transmission, voice controls, and robotic procedures are a huge progression in logistics. Handheld devices like smartphones and tablets have amplified the practicality of mobile tech options for supply chain operations.

According to the 2016 MHI Annual Industry Report, 36% of respondents said mobile technologies had the potential to either provide a competitive advantage or disrupt supply chains. Mobile devices provide close, concerted networks within supply chains that can’t be discounted.

SaaS

SaaS, or cloud-based software, provides advantages for companies because it has a low installation cost, fees based on usage, reduce IT expenses, and can scale use based on business needs. SaaS software is extremely accessible, bringing shippers and carriers together to create network collaboration. The most talked about advantage to SaaS applications is that it allows smaller companies to gain access to types of software that were previously beyond their means. Oracle’s CEO recently said he thinks 80% of all applications will be cloud-based by 2025.

Big Data

The budding applications of big data cannot go ignored; accurate demand forecasting, real-time and historic visibility and specific metrics of performance and cost data. As big data collects information from various sources, shippers can identify efficient patterns, disruptive trends and any inadequacies or added costs.

When a company examines data, from internal and external sources, it might learn that some DCs aren’t needed. Armed with this information, the company can develop a strategy to service popular DCs more frequently, and DCs that distribute less, less frequently. With more data, comes more operational transparency. Leveraging big data enables organizations to catch pain points or adeptness that might have otherwise gone unnoticed.

What’s Next

Businesses prepared to implement technologies are positioned to succeed in efficiency.

Increased shipment and data visibility, better cost control, stronger integration within and across businesses, improved planning, enhanced tracking and regulatory compliance are just a handful of advantages technology offers.

Other technologies are continuously being developed to meet the demands of the changing market. The online atmosphere has created new practices for shipping and distribution. Access to the internet has created a desire for immediate, accurate information. Social media is helping companies provide transparency into their network. Autonomous vehicles will significantly impact capacity and how the industry deals with the driver shortage. With technology, supply chains are able to innovate, improve and provide value to their customers.

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Source: C3 Solutions White Paper

How to Use a TMS to Manage Inbound Transportation

TMS for inboundInbound freight management is multifaceted and can eat up more than 40% of the average organization’s annual freight budget, according to Aberdeen Group. However, using a TMS for inbound shipments can help prevent unwanted costs.

Since inbound freight savings have a direct impact on an organization’s bottom line, shippers that make it a supply chain priority reap inventory efficiencies, cost containment, and enhanced productivity and service.

Companies expect to receive about 34,000 inbound shipments every month, so even decidedly successful inbound freight shippers are likely to encounter glitches.

35% of shippers claim that lack of visibility is one of the biggest challenges of inbound transportation, while 37% say determining hidden costs, and 25% say data analysis and decision support are the greatest challenges. Shippers experiencing challenges with inbound freight management might not be fully leveraging available optimization logic with a transportation management system (TMS).

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Why Companies Use TMS?

A TMS has capabilities that make life easier, it can manage by exception, easily track KPIs, optimize carriers with routes, and proactively notify you of disruptions or risk. A recent SupplyChain24/7 article explains the distinction of shippers who use a TMS when managing inbound transportation. A TMS’ biggest advantage is that it supports inbound transportation by providing shippers with visibility.

In today’s omni-channel world, control over inbound freight management requires detailed visibility on all accounts of the supply chain. Chris Cunnane with ARC Advisory Group said, “It’s really all about visibility into freight – understanding where it is and when it’s going to arrive so that you can plan effectively.

How Can You Benefit From TMS For Inbound Transport?

With good visibility, you don’t have trucks waiting around to unload with merchandise needed to fill pressing orders while other trucks with less time-sensitive inventory are unloading. The biggest thing a TMS can provide to improve inbound logistics is that visibility aspect.”

Visibility doesn’t exclusively rely on a TMS though, to gain full visibility, shippers must build relationships with suppliers, carriers and logistics providers. These partnerships enable shippers to get real-time insights and a chance to optimize best practices.

There is a major savings potential when using a TMS. To operate efficiently and effectively, companies need visibility into their entire supply chain process – including inbound freight.

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The 3 Most Popular Uses of TMS Technology

how to use TMSSupply chains are increasingly complex, and companies who leverage technology find competitive rates, enhanced operations, greater flexibility, and cost reductions.

Logistics providers continue to work in order to provide added value to their client’s supply chain processes. Successful 3PL relationships include committed and ongoing value through technology – with the use of historical and real-time reports to make data-driven decisions that enable lasting results.

How To Use TMS To Boost Efficiency?

The industry demands innovation and technology and requires cost-efficiency at the same time, and 3PLs are answering with cloud computing. Technology improvements are motivating demand for improving shippers’ transportation strategy. A TMS provides service gains, like on-time pickup and delivery and disruption notifications.

According to the 2016 results of Capgemini’s State of Logistics Outsourcing report, cloud technology is helping 3PLs and shippers reduce transportation costs, improve visibility, manage inventory and achieve regulatory compliance.

IT capabilities must be well-aligned between organizations. 93% of the 2016 Capgemini respondents agreed that IT capabilities are a necessary element of 3PL expertise and 59% agree that they were satisfied with 3PL IT capabilities.

“TMS users can expect robust execution, end-to-end visibility, dock door scheduling, yard management, inventory replenishment, and inventory strategies,” notes Rick Jordan of ICG Commerce.

Visibility

60% said they are using technology to increase visibility within orders, shipments and inventory.

Scheduling

48% are using the technology for scheduling within transportation management.

Planning

40% are using the technology for planning within transportation management.

3PLs are monitoring the marketplace and utilizing technology to choose the most profitable and efficient shipping lanes. Technology permits continuous route optimization along with dynamic incentivized scheduling, digital confirmations, and consolidated billing.

3PLs thinking about the future of the supply chain given disruptive innovations like drones, driverless vehicles, and smart cities are the ones that will remain key players in the industry.

Transportation management systems support a shipper’s pursuit of lower rates. The industry keeps focussing on innovation. Without a TMS, shippers might find it nearly impossible to consolidate transportation rates, performance and volumes across lanes. A TMS makes it possible to track data in one online portal. A TMS automates and consolidates freight invoices, so shippers don’t leave money on the table. 93% of shippers report their relationships with 3PLs have generally been successful.

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