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Sunday 9 October 2011

Bms- Logisitcs CRR set 3

GLOSSARY of terms for concept clearance
Chapter: 1
1.    Logistics
Logistics is the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory( and the related information flows) through the organization and its marketing channels in such a way that current and future profitability are maximized through the cost-effective  fulfillment of orders
2.    Logistic Management
Logistics Management as defined by the Council of Logistics Management (CLM): “Definition -Logistics Management is that part of Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.
3.    Benefit of logistic management
Logistics management can provide a multitude of ways to increase efficiency and productivity and hence contribute significantly to reduced unit costs
4.    Logistic management boundaries and relationships
Logistics Management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfilment, logistics network design, inventory management, supply/demand planning, and management of third party logistics services providers.
5.    Logistics origin & recent trends
Word, ’Logistics’ is derived from French word ‘loger’, which means art of war pertaining to movement and supply of armies. Basically a military concept, it is now commonly applied to marketing management. The development of interest in logistics after industrial revolution and World War II contributed to the growth in scope of logistical activities.

6.    The following  areas are the major scope of  logistics:
o     Demand forecasting
o     Distribution communication   
o     Inventory Control
o     Material Handling
o     Order Processing
o     Part & Service Support
o     Plant and Warehouse side selection 
o     Procurement
o     Packaging
o     Salvage & scrap disposal
o     Traffic & transportation
o     Warehousing & Storage
o     Time & Place Utility
o     Efficient Movement to Customer Return goods handling
o     Customers Service

7.    Business Logistics
One of the Subdivision of Logistics and is as under:-
         Procuring, moving and storing of R/M and transporting, warehousing and distribution of F/G
          Facilitation of relevant manufacturing and marketing
          Making finished goods available to the customers in the market
         Procuring, moving and storing of agricultural products
          Providing competitive edge in commodities market
8.    Supply chain concept
Supply chain -- A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.  Inventory days of supply, delivery performance, and order cycle times, capacity use, etc. Using this information to identify causal relationships to suggest actions in line with the business goals.

9.    Definitions of Logistics
            According to Council of logistics management: “Logistics is the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from point of origin to point of consumption for the purpose of conforming the customer requirement”. 
10. Functions of Logistics
Logistic functions - To varying degrees, the logistics function also includes sourcing and procurement, production planning and scheduling, packaging and assembly, and customer service. It is involved in all levels of planning and execution – strategic, operational and tactical. Logistics Management is an integrating function, which coordinates and optimizes all logistics activities, as well as integrates logistics activities with other functions including marketing, sales manufacturing, finance and information technology.”
11.  Global Strategy: A strategy that focuses on improving worldwide performance through the sales and marketing of common goods and services with minimum product variation by country.  Its competitive advantage grows through selecting the best locations for operations in other countries.
Chapter :2

12. Integrated Logistics
A comprehensive, system-wide view of the entire supply chain as a single process, from raw materials supply through finished goods distribution. All functions that make up the supply chain are managed as a single entity, rather than managing individual functions separately.The process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants; optimizing the goods or service –producing network to fulfill customer  requests; and utilizing the network to fulfill customer requests in a timely way.
13. Logistics Interfaces with other functions of the firm
a.    Logistics & Marketing
b.    Logistics & Operations
c.     Logistics & Finance
14. Integrating the firm
Logistics activities as an integrated system.
A.    Cost trade-off opportunities
B.    Recognizing the revenue impact of logistics (i.e., the cost of lost sales)





LM & SCM compare

15. Integrated logistics evolution
Ø  Integrated logistics is a result of evolution
Ø  Factors responsible for the evolution
ü  Consumer awareness 1960s
ü  Introduction of computer 1960s
ü  Global recession of 1970s & 1980s
ü  JIT manufacturing 1980s
Ø  Integrated logistics evolved from the status of “economy’s dark continent” in early 1960s to a crucial management function of today
Ø  Evolution is a result of following significant developments
ü  Internal integration
ü  Single plan concept
ü  Integration with other management functions
Integration of Logistics [infrastructures] of Services and Products - Infrastructure for logistics of product & infrastructure for logistics of service
16. Logistical Integration
Integrated Logistics: A comprehensive, system-wide view of the entire supply chain as a single process, from raw materials supply through finished goods distribution. All functions that make up the supply chain are managed as a single entity, rather than managing individual functions separately.The process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants; optimizing the goods or service –producing network to fulfill customer  requests; and utilizing the network to fulfill customer requests in a timely way.
17. Integrated logistic system
18. Logistical competence
Ø  Capability (required standards) for performing logistical functions
ü  Internal integration
ü  Integration with logistical management: Coordinating information and inventory flows in logistical network
19. Logistical competency
                                       i.   It is a strategy to provide a superior service at a total cost below industry average
                                     ii.   Its aim is to view how logistics can be exploited as a core competency so that it fits into a firm’s overall strategic positioning
                                    iii.   Performing integrated logistics

Definition: Logistical Competency is the relative assessment of a firm’s capability to provide competitively superior customer service at the lowest possible total cost
20. Inbound Logistics: The movement of materials from suppliers and vendors into production processes or storage facilities.
21. Outbound Logistics: The process related to the movement and storage of products from the end of the production line to the end user.
22. Third-Party Logistics (3PL): Outsourcing all or much of a company’s logistics operations to a specialized company.
23. Fourth-Party Logistics (4PL): Differs from third party logistics in the following ways; 1)4PL organization is often a separate entity established as a joint venture or long-term contract between a primary client and one or more partners; 2)4PL organization acts as a single interface between the client and multiple logistics service providers; 3) All aspects (ideally) of the client’s supply chain are managed by the 4PL organization; and, 4) It is possible for a major third-party logistics provider to form a 4PL organization within its existing structure

24. Strategic concept of logistics
Important strategic objectives of logistics functions
1.    Lower costs
2.    Increase product quality By eliminating defective products from both supply chain & manufacturing process
25. Logistic in the value chain
Value Chain: A series of activities, which combined, define a business process; the series of activities from manufacturers to the retail stores that define the industry supply chain.
26. Value Chain Analysis: A method to identify all the elements in the linkage of activities a firm relies on to secure the necessary materials and services, starting from their point of origin, to manufacture, and to distribute their products and services to an end user.
27. Customer service
Customer Service is another area of interface between marketing & logistics
28. Necessity of Logistics
·         Raise in transportation cost. 
·         Production efficiency is reaching a peak 
·         Fundamental change in inventory philosophy
·         Product line proliferated
·         Computer technology
·         Increased use or computers
·         Increased public concern of products Growth of several new, large retail chains or mass merchandise with large demands & very sophisticated logistics services, by pass traditional channel & distribution. 
·         Reduction in economic regulation 
·         Growing power of retailers
·         Globalization
29. The mission of Logistics
Mission of logistics is to achieve desired levels of service and quality at lowest possible cost. Mission of logistics is providing a means by which customer satisfaction is achieved
30. Supply chain integration
A supply chain is a network and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished goods, and the distribution of these finished goods to the customers. Supply chains exist in both manufacturing and service organizations, although the complexity of the chain may differ greatly from firm to firm and industry to industry.
31. Supply Chain Management (SCM) as defined by the Council of Logistics Management (CLM): “Definition -Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies. Boundaries and Relationships -Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the Logistics Management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, and finance and information technology.”

32. Council of Logistics Management (CLM): The CLM is a not-for-profit professional business organization consisting of individuals throughout the world who have interests and/or responsibilities in logistics and the related functions that make up the logistics profession. Its purpose is to enhance the development of the logistics profession through logistics professionals by providing them with educational opportunities and relevant information through a variety of programs, services, and activities.
33. Distribution: Outbound logistics, from the end of the production line to the end user. 1) The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. These activities encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management. It includes all activities related to physical distribution, as well as the return of goods to the manufacturer. In many cases, this movement is made through one or more levels of field warehouses. Synonym: Physical Distribution. 2) The systematic division of a whole into discrete parts having distinctive characteristics.

34. Push Distribution:  The process of building product and pushing it into the distribution channel without receiving any information regarding requirements.
35.   Pull or Pull-through distribution: Supply-chain action initiated by the customer. Traditionally, the supply chain was pushed; manufacturers produced goods and "pushed" them through the supply chain, and the customer had no control. In a pull environment, a customer's purchase sends replenishment information back through the supply chain from retailer to distributor to manufacturer, so goods are "pulled" through the supply chain.
36. Push Distribution:  The process of building product and pushing it into the distribution channel without receiving any information regarding requirements.
37.   Purchase Order (PO): The purchaser’s authorization used to formalize a purchase transaction with a supplier. The physical form or electronic transaction a buyer uses when placing order for merchandise.
38. Goods Received Note (GRN): Documentation raised by the recipient of materials or products.
39. Batch Number: A sequence number associated with a specific batch or production run of products and used for tracking purposes. Synonym: Lot Number.
40. Export: 1) In logistics, the movement of products from one country to another.
41. Facilities: The physical plant, distribution centers, service centers, and related equipment.
42. Fair-share Quantity Logic: In inventory management, the process of equitably allocating available stock among field distribution centers. Fair-share quantity logic is normally used when stock available from a central inventory location is less than the cumulative requirements of the field stocking locations.  The use of fair-share quantity logic involves procedures that “push” stock out to the field, instead of allowing the field to “pull” in what is needed. The objective is to maximize customer service from the limited available inventory.
43. Finished Goods Inventory (FG or FGI): Products completely manufactured, packaged, stored, and ready for distribution.
44. Raw Materials (RM): Crude or processed material that can be converted by manufacturing, processing, or combination into a new and useful product.
45.   Work-in-Process (WIP): Parts and subassemblies in the process of becoming completed finished goods. Work in process generally includes all of the material, labour and overhead charged against a production order which has not been absorbed back into inventory through receipt of completed products.
46. Fixed Costs: Costs, which do not fluctuate with business volume in the short run.  Fixed costs include items such as depreciation on buildings and fixtures.
47. Indirect Cost: A resource or activity cost that cannot be directly traced to a final cost object since no direct or repeatable cause-and-effect relationship exists. An indirect cost uses an assignment or allocation to transfer cost.
48. Fixed Overhead: Traditionally, all manufacturing costs, other than direct labour and direct materials, that continue even if products are not produced. Although fixed overhead is necessary to produce the product, it cannot be directly traced to the final product.
49. Flexibility: Ability to respond quickly and efficiently to changing customer and consumer demands.
50.   Item: Any unique manufactured or purchased part, material, intermediate, subassembly, or product.
51.   Float: The time required for documents, payments, etc. to get from one trading partner to another.
52.   Floor-Ready Merchandise (FRM): Goods shipped by suppliers to retailers with all necessary tags, prices, security devices, etc. already attached, so goods can be cross docked rapidly through retail DCs, or received directly at stores.
53.   Four P’s: A set of marketing tools to direct the business offering to the customer. The four P’s are product, price, place, and promotion.
54.   Future order: An order entered for shipment at some future date. This may be related to new products which are not currently available for shipment, or scheduling of future needs by the customer.
55.   Handling Costs: The cost involved in moving, transferring, preparing, and otherwise handling inventory.
56.   Landed Cost: Cost of product plus relevant logistics costs such as transportation, warehousing, handling, etc. Also called Total Landed Cost or Net Landed Costs
57.   Lead Time: The total time that elapses between an order's placement and its receipt. It includes the time required for order transmittal, order processing, order preparation, and transit.
58.   Leverage: Taking something small and exploding it. Can be financial or technological.
59.   Life Cycle Cost: In cost accounting, a product’s life cycle is the period that starts with the initial product conceptualization and ends with the withdrawal of the product from the marketplace and final disposition. A product life cycle is characterized by certain defined stages, including research, development, introduction, maturity, decline, and abandonment. Life cycle cost is the accumulated costs incurred by a product during these stages.
60.   Market Demand: In marketing, the total demand that would exist within a defined customer group in a given geographical area during a particular time period given a known marketing program.
61.   Market Segment: A group of potential customers sharing some measurable characteristics based on demographics, psychographics, lifestyle, geography, benefits, etc.
62.   International Standards Organization (ISO): An organization within the United Nations to which all national and other standard setting bodies (should) defer.
63.   Internet: A computer term which refers to an interconnected group of computer networks from all parts of the world, i.e. a network of networks. Accessed via a modem and an on-line service provider, it contains many information resources and acts as a giant electronic message routing system.
64.   Materials Handling: The physical handling of products and materials between procurement and shipping.
65.   Materials Management: Inbound logistics from suppliers through the production process. The movement and management of materials and products from procurement through production.
66.   Materials Requirements Planning (MRP): A decision-making methodology used to determine the timing and quantities of materials to purchase.
67.   Order Cycle: The time and process involved from the placement of an order to the receipt of the shipment.
68.   Order Management: The planning, directing, monitoring, and controlling of the processes related to customer orders, manufacturing orders, and purchase orders.  Regarding customer orders, order management includes order promising, order entry, order pick, pack and ship, billing, and reconciliation of the customer account. Regarding manufacturing orders, order management includes order release, routing, manufacture, monitoring, and receipt into stores or finished goods inventories. Regarding purchasing orders, order management includes order placement, monitoring, receiving, acceptance, and payment of supplier.
69.   Order Processing: Activities associated with filling customer orders.
70.   Outbound Consolidation: Consolidation of a number of small shipments for various customers into a larger load. The large load is then shipped to a location near the customers where it is broken down and then the small shipments are distributed to the customers. This can reduce overall shipping charges where many small packet or parcel shipments are handled each day.
71.   Resources: Economic elements applied or used in the performance of activities or to directly support cost objects. They include people, materials, supplies, equipment, technologies and facilities.
72.   Safety Stock: The inventory a company holds above normal needs as a buffer against delays in receipt of supply or changes in customer demand.
73.   Subcontracting: Sending production work outside to another manufacturer. This can involve specialized operations such as plating metals, or complete functional operations.
74.   Sunk Cost: 1) The unrecovered balance of an investment.  It is a cost, already paid, that is not relevant to the decision concerning the future that is being made. Capital already invested that for some reason cannot be retrieved. 2) A past cost that has no relevance with respect to future receipts and disbursements of a facility undergoing an economic study. This concept implies that since a past outlay is the same regardless of the alternative selected, it should not influence the choice between alternatives.
75.   Supply Chain Design: The determination of how to structure a supply chain. Design decisions include the selection of partners, the location and capacity of warehouse and production facilities, the products, the modes of transportation, and supporting information systems.
76.   Supply Chain Execution (SCE): The ability to move the product out the warehouse door. This is a critical capacity and one that only brick-and-mortar firms bring to the B2B table. Dot-coms have the technology, but that's only part of the equation. The need for SCE is what is driving the Dot-coms to offer equity partnerships to the wholesale distributors.
77.   Supply Chain Integration (SCI): Likely to become a key competitive advantage of selected e-marketplaces. Similar concept to the Back-End Integration, but with greater emphasis on the moving of goods and services.
78.   Supply Chain Network Design Systems: The systems employed in optimizing the relationships among the various elements of the supply chain-manufacturing plants, distribution centers, points-of-sale, as well as raw materials, relationships among product families, and other factors-to synchronize supply chains at a strategic level.
79.   Supply-Chain Finance Costs: Costs associated with paying invoices, auditing physical counts, performing inventory accounting, and collecting accounts receivable. Does NOT include customer invoicing/ accounting costs (see Order Management Costs).
80.   Supply Chain Strategy Planning: The process of process of analyzing, evaluating, defining supply chain strategies, including network design, manufacturing and transportation strategy and inventory policy.
81.   Supply Planning: The process of identifying, prioritizing, and aggregating, as a whole with constituent parts, all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level, horizon and interval.
82.   Supply Planning Systems: The process of identifying, prioritizing, and aggregating, as a whole with constituent parts, all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level, horizon and interval.
83.   Supply Warehouse: A warehouse that stores raw materials. Goods from different suppliers are picked, sorted, staged, or sequenced at the warehouse to assemble plant orders.
84.   Support Costs: Costs of activities not directly associated with producing or delivering products or services. Examples are the costs of information systems, process engineering and purchasing

85.   Outsource: To utilize a third-party provider to perform services previously performed in-house.  Examples include manufacturing of products and call center/customer support.
86.   Process Manufacturing: Production that adds value by mixing, separating, forming, and/or performing chemical reactions. It may be done in a batch, continuous, or mixed batch/continuous mode.
87.   Production Capacity: Measure of how much production volume may be experienced over a set period of time.
88.   Promotion: The act of selling a product at a reduced price, or a buy one -get one free offer, for the purpose of increasing sales.
89.   Quality: Conformance to requirements or fitness for use. Quality can be defined through five principal approaches: (1) Transcendent quality is an ideal, a condition of excellence. (2) Product-based quality is based on a product attribute.  (3) User-based qua lity is fitness for use. 
90.   (4) Manufacturing-based quality is conformance to requirements.  (5) Value-based quality is the degree of excellence at an acceptable price. Also, quality has two major components: (a) quality of conformance—quality is defined by the absence of defects, and (b) quality of design—quality is measured by the degree of customer satisfaction with a product’s characteristics and features.


91.   In-transit Inventory: Material moving between two or more locations, usually separated geographically; for example, finished goods being shipped from a plant to a distribution center. In-transit inventory is an easily overlooked component of total supply chain availability.
92.   Inventory Carrying Cost :One of the elements comprising a company's total supply-chain management costs. These costs consist of the following:
93.   Opportunity Cost: The opportunity cost of holding inventory. This should be based on your company's own cost of capital standards using the following formula. Calculation: Cost of Capital x Average Net Value of Inventory
94.   Total Cost Analysis: A decision-making approach that considers minimization of total costs and recognizes the interrelationship among system variables such as transportation, warehousing, inventory, and customer service.
95.   Value Chain Analysis: A method to identify all the elements in the linkage of activities a firm relies on to secure the necessary materials and services, starting from their point of origin, to manufacture, and to distribute their products and services to an end user.
96.   Vendor: The manufacturer or distributor of an item or product line.
97.   Warehouse Management System (WMS): The systems used in effectively managing warehouse business processes and direct warehouse activities, including receiving, putaway, picking, shipping, and inventory cycle counts. Also includes support of radio-frequency communications, allowing real-time data transfer between the system and warehouse personnel.  They also maximize space and minimize material handling by automating putaway processes.


98. Emerging integrated logistic concepts

§  Service response logistics(SRL)
§  Quick response logistics(QRL): ): A strategy widely adopted by general merchandise and soft lines retailers and manufacturers to reduce retail out-of-stocks, forced markdowns and operating expenses. These goals are accomplished through shipping accuracy and reduced response time. QR is a partnership strategy in which suppliers and retailers work together to respond more rapidly to the consumer by sharing point-of-sale scan data, enabling both to forecast replenishment needs.
§  Response logistic recovery(RLR)
§  Efficient consumer response(ECR): A demand driven replenishment system designed to link all parties in the logistics channel to create a massive flow-through distribution network. Replenishment is based upon consumer demand and point of sale information.
§  Reverse logistics(RL): A specialized segment of logistics focusing on the movement and management of products and resources after the sale and after delivery to the customer.  Includes product returns for repair and/or credit.



Chapter :3

1.    Integrated logistical cycles
2.    Demand Management
3.    Importance of 3c’s and logistics
4.    Customer Relationship Management (CRM): This refers to information systems that help sales and marketing functions, as opposed to the ERP (Enterprise Resource Planning), which is for back-end integration.
5.    Measurement of Customer service
6.    Dynamic logical customer servive requirements
7.    Manufacturing support
8.    Production planning and control
Production Planning and Scheduling: The systems that enable creation of detailed optimized plans and schedules taking into account the resource, material, and dependency constraints to meet the deadlines.

9.    Supply Management
Chapter :4

10. Information management
11. Quality information
12. Importance and objectives of logistic informations systems
13. Information Architecture
14. Logistic information system technologies
Chapter :5

15. Inventory management
16. Inventory terminology
17. Functions of Inventory
18. Risks of Holding Inventory
19. Costs of Carrying inventory
20. Approaches to Inventory Management
21. Reactive Approach
22. Planning Approach
23. Inventory Classification
24. ABC Analysis
25. Critical Value Analysis
Chapter :6
26. Transportation Management
27. Principles of Transportation Management
28. Transportation Terms
29. Basic Modes of transportation
30. Transportation Management Decisions
31. Transportation rate structures
32. Transportation Management
33. Principles of Transportation Management
34. Transportation Terms
35. Basic Modes of transportation
36. Transportation Management Decisions
37. Transportation rate structures
Chapter :7

38. Material handling
39. Material handling system dimensions
40. Objectives of Material handling
41. Material handling principles
42. Automated storage and retrieval systems
43. Packaging
44. Functions of Packaging
45. Packaging material
46. Material handling equipments
47. Logistics planning
48. Logistics organisations
49. Performance measurement
50. Internal performance measures
51. External performance measures
52. Costing
53. Activity based costing





General Logistic terminology
54. Accounts payable (A/P): The value of goods and services acquired for which payment has not yet been made.

55. Accounts receivable (A/R): The value of goods shipped or services rendered to a customer on whom payment has not yet been received. Usually includes an allowance for bad debts.
56. B2B: Business to Business
57. B2C: Business to Consumer
58. Benchmarking: The process of comparing performance against the practices of other leading companies for the purpose of improving performance. Companies also benchmark internally by tracking and comparing current performance with past performance.
59. Landed Cost: Cost of product plus relevant logistics costs such as transportation, warehousing, handling, etc. Also called Total Landed Cost or Net Landed Costs
60. Lead Logistics Partner (LLP): An organization that organizes other 3rd party logistics partners for outsourcing of logistics functions.
61. Logistics Channel: The network of supply chain participants engaged in storage, handling, transfer, transportation, and communications functions that contribute to the efficient flow of goods.
62. Third Party Logistics Provider: A firm which provides multiple logistics services for use by customers. Preferably, these services are integrated, or "bundled" together by the provider. These firms facilitate the movement of parts and materials from suppliers to manufacturers, and finished products from manufacturers to distributors and retailers. Among the services which they provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding.
63. Third-Party Warehousing: The outsourcing of the warehousing function by the seller of the goods.
64. Throughput: A measure of warehousing output volume (weight, number of units). Also, the total amount of units received plus the total amount of units shipped, divided by two.

65. Channel Partners: Members of a supply chain (i.e. suppliers, manufacturers, distributors, retailers, etc.) who work in conjunction with one another to manufacture, distribute, and sell a specific product.

66. Channels of Distribution: Any series of firms or individuals that participates in the flow of goods and services from the raw material supplier and producer to the final user or consumer. 

67. Days of Supply: Measure of quantity of inventory-on-hand, in relation to number of days for which usage which will be covered. For example, if a component is consumed in manufacturing at the rate of 100 per day, and there are 1,585 units available on-hand, this represents 15.85 days supply.
68. Demand Chain: Another name for the supply chain, with emphasis on customer or end-user demand pulling materials and product through the chain.
69. Demand Chain Management: Same as supply chain management, but with emphasis on consumer pull vs. supplier push.

70.

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