Supply Chain Management in PepsiCo Pakistan

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a. Today Pepsi has widened at a sizable scale and has a profile of drink brands that includes carbonated soft drinks, juices and juiced beverages, humara link essentially pepsi co sey b nae hai kyunki riaz bottlers are its suppliers aswell as maunfacturesr and they give that via transportations to the vendors( stores hotel etc) then it goes to customers. . . . . . . . . . they may have warehouses storage sites creation sites. . . . . . . . . . . . . its located in gulbergso riaz bottler are everythihumara website link in essence pepsi co sey b nae hai kyunki riaz bottlers are its suppliers aswell as maunfacturesr plus they give that via transportations to the retailers( stores hotel etc) then it goes to customers. . . . . . . . . . they have got warehouses storage sites creation sites. . . . . . . . . . . . . its situated in gulberg

so riaz bottler are everything

Ready-to-drink teas and coffees, isotonic drinks, bottled water and enhanced normal water.

PepsiCo has popular beverages such as Hill Dew, Diet Pepsi, Tropicana Pure Prime, Aquafina, Tropicana Drink Drinks, Tropicana Twister, MIRINDA plus much more.

PepsiCola market segments Frapoccuino ready-to-drink espresso through a partnership with Starbucks.

PEPSI CO PRODUCT: the merchandise we live taking for the project of supply chain management is MIRINDA.

RIAZ BOTTLERS:

Riaz Bottlers (PVT) Limited (RBL) integrated in Pakistan as a private limited company in 1976. RBL is the franchise holder of Pepsi Cola International with seven brands. Like PEPSI, PEPSI MAX, 7UP, MIRINDA and Hill DEW etc. They have recently launched Aquafina and are in procedure for moving towards some other products.

RBL today is one of the best National Companies in Pakistan. At RBL, they assume that "Our lifetime and success is more than simply getting together with our business aims and we are proud of the success that the business has achieved. Alongside one another our people supply the skills, knowledge and competence to deliver the grade of service that our customers expect and upon which our reputation is dependent. "

RIAZ BOTTLERS AND OFFER CHAIN MANAGEMENT:

RBL's major functions are to demeanor a methodical creation and supply of the product without the tactical and tactical flaws. Supported by a robust competitive strategy and empowered by some effective resource string strategies, the group has been managing an effective supply chain through out the region. It has create a urbane creation and storage seed in Lahore with development products and huge development capacity.

RBL has different management departments coping with specialized Marketing, HR, IT and Supply Chain Processes. In this survey we conducted the procedure of the essential supply chain management functions of RBL for MIRINDA by Pepsi co.

COMPREHENSION OF MIRINDA Source CHAIN:

The goal of every supply string is to increase the entire value generated. The worthiness of a supply chain generates is the difference between what the final product will probably be worth to the client and the costs the supply string incurs in filling up the customer's need. (Chopra, Meindl 2006)

DECISION PHASES IN SUPPLY String OF MIRINDA

SUPPLY CHAIN DESIGN OF MIRINDA:

A proper decision regarding how to structure the supply string over next approaching years have been made and the short term aswell as the longterm decisions have been made by the company in regards to location and capacities of creation and warehousing facilities, the merchandise to be created or stored at various

locations, the modes of travel to be made, information systems and so on.

Their supply chain design is very expensive to alter on short notice and supports the company's tactical objectives. To be able to ensure a good source string strategy, Riaz Bottlers programs one or two years in advance. It has several agreements with manufacturers, and gets raw material on a convenient basis. The company also makes a decision where production vegetation should be positioned. RBL has production plants at Lahore. The development process is 80% computerized.

The company must provide and control move for the delivery of products as well as the agreement of third party services for the procurement of products. The transport department handles orders and the transfer department decides the vehicles for safe delivery. Materials planning and sourcing is carried out as well. Sources of supply of fresh material both local and foreign are determined and conditions and conditions are negotiated. Capacity planning is also done at this stage.

Sales forecasting and production planning depends after the capacity of the organization regarding

Production.

Storage: Raw and packaging.

Storage: Completed goods.

Riaz bottlers Lahore has a procurement budget of nearly Rs 10 billion. Approved suppliers cannot go beyond this budget. The provider is audited by the most cost efficient quality control section. Distributors are also decided by the business, remember past performances. The company has

increased its distribution capacity from one to ten filling lines during the last few years loaning it

a competitive border over Coca Cola.

FIGURE 1

SUPPLY CHAIN PLANNING OF MIRINDA:

After RBL establish the design with their supply chain they actually the look which enhances their surplus in source chain and that is their goal too. The planning launches and make sure they are set their constraints over some course of time in line with the demand of Mirinda. Pepsi co provides out sales forecasting for local demand as well as for export purposes to countries such as Afghanistan etc for Mirinda. The twelve-monthly sales goal is conveyed to the source chain division of RBL. Planning is carried out on a every month, weekly and daily basis for order planning allocation, warehousing, development scheduling inventory planning and marketing. at RBL.

images. jpg

FIGURE 2

SUPPLY CHAIN Procedure OF MIRINDA:

In RBL, the development, sales and offer string departments get united to decide the inventory on weekly basis. There's always less doubt about the demand. the operation process includes customer purchases in the perfect manner. In this RBL, allocate inventory or development to individual orders, set a night out (which is obviously in line with the will of customers plus they don't get disappointed) that an order is to be filled, generate a proper pick lists at a warehouse in gulberg, allocate to shipping and delivery, set delivery etc.

PROCESS VIEWS OF MIRINDA Source CHAIN

The procedures in a resource chain are divided into a series of cycles each performed at the interface

between two successive periods of a supply chain.

CYCLE VIEW OF SUPPLY CHAIN:

scm12

FIGURE 3

Supplier / manufacturers: The suppliers to Pepsi Co are franchise operative (RBL) as well as company operative (LAYS potato chips) system and are situated in eight locations of Pakistan. The metropolitan areas are Lahore, Islamabad, Karachi, Peshawar, Hyderabad, Sukkhar, Gujranwala and Faisalabad. PepsiCo has its Place, Factory, Workshop and Warehouse at the same put in place Lahore. the Address is : Expert Mangat Highway, Gulberg Lahore

Distributors: They are located throughout the country; every city has its distributors. The distribution done on immediate and indirect ways that would be mentioned in the circulation section of the record.

Retailers : stores outlets are all type of shopkeepers, department stores, hotels etc to whom the vendors supply the stock via travelling i. e. vehicles etc which provides distribution from indicate point in different allocative routes.

Customers: Its customers are all sort of aim for markets from sociable category A to C and range within all demographical and pyschographical variables.

PUSH AND Yank VIEW OF MIRINDA SUPPLY CHAIN:

The press process execution is commenced in expectation to a person order. MIRINDA has a seasonal demand. Just with time concept is essential in non-seasonal period rather than relevant in seasonal period. All functions that are part of the procurement cycle, developing cycle, replenishment pattern, and customer order routine are push processes.

MIRINDA Sales order and processing: The Shipping Manager gets sales order from Sales Team, distributors through cell phone, fax & email 1 day before dispatch. The sales are created to base distributors on advance payment against orders then shipping director plans according to the demand of distributors on daily basis.

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FIGURE 4

COMPETITIVE AND SUPPLY CHAIN STRATEGIES:

There are three major lasting advantages that provide PepsiCo a competitive advantage as they

operate in the global current market

Big, muscular brands.

Proven potential to innovate and create differentiated products.

Powerful go-to-market systems.

PepsiCo's ( Mirinda) overall mission is to increase the value of shareholder's investment. They do this through sales development, cost handles and sensible investment of resources. They consider their commercial success relies upon offering quality and value to their consumers and customers; providing products that are safe, wholesome, financially useful and environmentally sound; and providing a good go back to their buyers while sticking with the highest specifications of integrity.

A customer while purchasing a container of Mirinda will consider product quality, price and availability of the merchandise. Thus, Mirinda in Pakistan especially concentrates its competitive strategy concerning producing sufficient variety, reasonable prices, and the option of the product.

SUPPLY CHAIN STRATEGIES

STEP ONE: THE CLIENT AND SUPPLY String UNCERTAINTY.

Identifying customer needs :

RBL must understand the customer needs for every single targeted section and the doubt the supply string faces in satisfying these needs. As RBL handles beverages, that are a fast moving consumer good, it is aware of the requirements of consumers.

Mirinda is recognized as a glass or two which is rejuvenating during summer time, and used regularly during winter, with demand walking around festivals such as Eid and situations such as weddings. RBL suits both towns and rural areas. It recognizes the needs of both. As demand for beverages is seasonal, the amount of product needed for every lot is looked after with previous demand at heart. Consumers generally require a tiny response time, high service level, realistic price plus some variety (for example mirinda has apple flavour too now).

Demand uncertainty and implied demand doubt:

Demand for Mirinda varies by product. For instance there is a better demand for "Mirinda" as

compared to "Mirinda Apple, " which is kind of new. Hence, Mirinda has a low demand uncertainty as compared to "Mirinda Apple. " The merchandise "Mirinda" is nearing its maturity level in the PLC whereas "Mirinda Apple" is in the introductory level. Mirinda's implied demand uncertainty varies with the product type as well as the customer needs.

Due to reduced lead time (the client may purchase its competitor's product if Mirinda is not available at that time such as Fanta, Gourmet cola, Amrat cola ), dependence on increased variety and higher-level of service, implied demand doubt increases. That is true for places where unmet demand by Mirinda is met by Coca Cola Company, Gourmet Cola and other such rivals. Supply doubt is also damaged by services. Services have higher source uncertainty.

Uncertainty for the capability of the supply chain:

After deciding the demand uncertainty it takes a glance at the uncertainty caused by the supply string. "Mirinda" is not a new product and its own market is going towards maturation. The company doesn't have many troubles in delivering a product and has a fixed delivery timetable (on daily basis). "Mirinda" hence has a predictable supply and relatively uncertain demand depending on market conditions.

STEP TWO: UNDERSTANDING THE Source CHAIN Features:

The efficiency and responsiveness varies according to the consumer needs, implied demand

uncertainty, product type and market segments. In remote control areas Pepsi Co ( Mirinda) focuses on being somewhat reliable as other methods of travelling could turn the merchandise to be highly expensive. According to the company it generally does not deal with distributors who don't have 20 to 25 vehicles, therefore as the company has give attention to cost lowering, uses poor and inexpensive modes of vehicles, the demand is certain, and uses economies of size in production, the product Mirinda is more willing towards being relatively efficient.

In cities, the business concentrates its attention on being highly reactive as Mirinda has to meet short lead time, meet a higher service level, manage a big variety of products and respond to wide runs of volume demanded especially at the retail stage.

Highly efficient slightly efficient somewhat reactive highly responsive

In towns MIRINDA In cities

FIGURE 5

STEP 3: REACHING THE STRATEGIC FIT:

The Mirinda resource string assign different roles to its different phases, the company must determine either to transfer the responsiveness to the manufacture stage or even to the retailer stage as making one stage more reactive allows the other level to concentrate on being better. While talking about the Mirinda's supply capability it sometimes appears that Mirinda is commonly more reactive in the locations and a little less in towns.

Therefore, moving the responsiveness to the dealer and distributor, allowing them to face the higher implied demand uncertainty. This in exchange allows the manufacturer and dealer to be more efficient. At the same time, multiple drink types contribute to a broader product collection creating RBL to change its strategies appropriately; tailoring the supply chain to best meet the needs of every beverage demand.

SUPPLY CHAIN DRIVERS AND METRICS:

Bonding drivers with Product Life Circuit (PLC) Supply string strategy:

Mirinda mainly comes after a combined cost effective responsive supply chain strategy in lahore. The extensive supply of the item is being ensured throughout metropolis market with the aid of RBL vendors. Mirinda has been able to reach out to all or any market segments with no delays due to its business maturity and comparative business durability. It has the normal drinks sales volumes as compared to any other locations.

Although there can be an overwhelming steadiness in the product market yet there are some distant areas where there are conditions for a possible stock out because of the remoteness. For handling this risk Mirinda has financed different entire vendors in those areas to act in response immediately. Mirinda in Lahore and generally in most parts of Pakistan can be rightly placed into the group of an "ever growing older business. "

Responsiveness: In case there is Fast Moving Consumer Goods (FMCGs) that focus on a huge segment of market, responsiveness is a deciding factor for the organizational success. In a typical Pakistani market, quick response enables source chains to meet up with the customer requirements for evershorter business lead times, also to synchronize the supply to meet up with the peaks and troughs of demand. Mirinda's supply chain has been able to reinforce a larger reaction to the uncertain and unstable market patterns only since it has multisided handling facilities and corresponds to a organized creation network with both dedicated and multi-product facilities.

The major focus is to determine the processes that are to be integrated in the supply chain network with the corresponding suppliers, circulation centers and the associated carry links between them. The major concerns in the look are the source string responsiveness and profitability.

Framework for Structuring Individuals:

FIGURE 6

The framework is dependant on a motive to produce strategic fit between the competitive and supply

chain strategy. Mirinda Competitive strategy stands to provide a large variety of products very

quickly; together the supply string strategy stands to materialize the option of that

variety of products. Mirinda mainly practices a responsive supply string strategy.

Alignment of mirinda's business technique to a corresponding source string strategy is achieved through proper deployment of resource chain drivers. Mirinda must offer with different group of market segments

simultaneously. More often than not the approach needs to be reactive enough to develop substantially to have the ability to contend with uncertain demand, while in many areas demand is certain and very much predictable, so there it features an efficient supply string strategy.

THE Center DRIVER

ROLE, LOCATION AND CAPACITY :

In RBL the Mirinda is stored, constructed and fabricated at gulberg Lahore. . Mirinda has established a adaptable and a product-focused production facility to be able to answer effectively to the variability popular. The safe-keeping facilities are designed to be able to provide maximum possible capacity for the inventory. They have franchising having bottling procedures.

OVERALL TRADE OFF ( RESPONSIVE) : In order to ensure the responsive strategy execution, the role of facilities is of prime importance in the resource string of RBL The large amount of extra capacity allows the facility to be very versatile and to react to large surges in needs placed on it. In position with the reactive supply string strategy the facilities have been geographically located close to the market.

FIGURE 7

FIGURE 8

THE INVENTORY DRIVER

ROLE, LOCATION AND SEASONAL INVENTORY: RBL has established a comprehensive plan to ensure the sufficient inventory levels to maintain with the market demand effectively. The inventory type is seasonal. For this purpose the key inventory safe-keeping has been established within the main plant area maneet highway gulberg Lahore inside RBL. It gets the safe-keeping capacity of 200, 000 Sq Ft and the area is being implemented both horizontally and vertically.

The shipping department is in control for storage space and subsequent displacement of the merchandise orders. The

inventory capacity has been utilized and maintained in coordination with the production department and is dependant on the term production estimates.

OVERALL TRADE OFF (Reactive): Increasing inventory makes the resource more responsive to the customers. At RBL, managers bear a higher inventory cost to ensure maximum levels of inventory and reduce the development and vehicles costs.

inventory. jpg

FIGURE 9

THE Travelling DRIVER

DESIGN AND SELECTION OF Travelling MODE: PTN offers move to PEPSI CO( mirinda) by means of big large vehicles. Faster travelling of the products allows RBL to keep sufficient levels of stock on the racks. RBL's travelling network is the collection of routes, settings and locations along which the product can be delivered. With the help of distributors the product is being offered to the market.

There are multiple source and demand points within metropolis which cater to the market demand. RBL makes a decision and chooses different settings of travel having different characteristics with regards to the acceleration and size of shipment.

OVERALL TRADE OFF ( RESPONSIVE): The transport network has been made with a view to ensure responsiveness and raise the availability of the merchandise. For RBL using fast method of transport boosts responsiveness as well as the transport cost but decreases the inventory retaining cost. Transportation driver has a big effect on the responsiveness of the business enterprise.

THE INFORMATION DRIVER

COMPONENTS OF INFORMATION DECISIONS: Connects all the resource chain periods effectively allowing them to coordinate and optimize total supply string profitability. It is also crucial to the daily procedures of each level in the supply chain. The unit director utilizes the creation arranging system that is dependant on information on demand to create a schedule which allows RBL to produce the right amount of product. The warehouse in charge uses these details to create awareness of the warehouses inventory items. They don't really have any permitting solutions such as EDI, ERP and RFID

OVERALL TRASE OFF (RESPONSIVE): Information writing helps these firms improve its responsiveness within the market. It helps to effectively forecast demand and realize frequency of changes, measurements of the consequences of seasonal factors influencing the development, measurements of variances from the plan and the ratio of demand variability to order variability. Well-timed and accurate information

enables the syndication managers to fix potential stock out or oversupply problems.

FIGURE 10

THE Prices DRIVER

FIXED PRICING VERSUS MENU Rates: Mirinda helps to keep its rates strategy with the assessment of its competitors for example FANTA. And the demand is seasonal so during the season on period the prices is performed on the resolved basis i. e. summers. And during winters which is the off season period the pricing is performed on menu basis for example Rs 2 to Rs 5 ruppees off per 1. 5 litre bottle etc.

THE SOURCING DRIVER:

OUTSOURCED, Dealer SELECTION AND PROCUREMENT: Pepsico has outsourced decisions in its source chain as RBL can be an outsourced company for this. They think that it was best to outsource Mirinda and other drinks aswell because the expansion in total resource chain is significant with little additional risk. The responsive components are outsourced like the PTN aswell which gives transportation to Pepsico ( Mirinda). It offers variety of suppliers within Lahore and all districts of the country. Both procurement in immediate aswell as indirect ways are doneand they have a good coordination between its suppliers and buyers.

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FIGURE 11

DISTRIBUTION NETWORK OF MIRINDA

Direct distribution:

Delivery of post mix cylinders & handling of key accounts: The key accounts are

different wholesalers, restaurants and hotels like Pizza Hut, KFC, Metro which

serve as a place for key deal. These are known as nationwide key accounts and are very

important in conditions of competition.

Export Parties.

Indirect circulation:

Through Basic market distributors

Through Outstation distributors

Before delivering the product some certain guiding ideas are adopted for the assessment of

distributor's functionality by RBL.

Applicant will need to have 30 to 40 vehicles (depending on the area).

Applicant must have 40, 000 cases of empty bottles.

Applicant must deposit Rs. 5, 000, 000 as a security.

RBL uses light and heavy vehicles for safe delivery of goods to the vendors for timely

delivery. It employs the just with time concept which is applicable in Non-seasonal period and not

applicable in the seasonal period.

REVIEW AND REVISE Syndication:

This is usually done through overtaking key income areas. When the distributor does not achieve its

sales concentrate on, the syndication is taken again and an addition of new distributor is performed. Therefore

MIRINDA'S source is low source uncertainty. Some of its source source features are

Less breakdowns

High quality

Flexible source capacity

Mature creation process

FACTORES INFLUENCING Syndication NETWORK DESIGN:

At the best level, performance of an distribution network should be assessed along two

dimensions

1. Customer needs that are met

2. Cost of achieving customer needs

While customer service involves many components we will consider those steps that are inspired by the structure of the distribution network for Mirinda.

Response Time: For Mirinda is little as the direct customers for it are the merchants and then

the consumers. So with over 30 to 40 delivery vehicles in Lahore, it is readily available to every

retailer within 30 minutes or an hour utmost. Lahore has 12 warehouses from where in fact the supply to the marketplace is performed through pickup trucks provided by PTN.

Product Variety: They have got made their place in the market with their unique product line which range from Mirinda to Mirinda Apple with relaxing taste and great quality.

Customers Desire: customer desire more for mirinda instead of apple mirinda. Just lately, the sales for 250 ml containers has increased and 1. 5 litre bottle decreased but they are trying to increase it as it gives the business higher revenue.

Availability: The product is actually available in stock whenever an order occurs. Whenever the distributors feel that after one launching there may be a stock out they place an order to RBL beforehand just to keep carefully the floor with enough stock in hand. The Vendors have 3 days and nights stock as back up with them in order of any malfunctioning of the seed or other such exterior factors.

Customer Experience For Mirinda is definitely positive as they receive the product with ease and on time. The retailers will be the direct customers as they place an order to the distributors. There's never been a scarcity or a delay for mirinda in Metro or Pizza Hut which are the key makes up about the business.

Order Visibility They aren't really an electronic phenomenon where you can trail your order

through computer. It is more of person-to-person contact and one can certainly track down their

orders through the chosen personnel in each sector of Lahore or to the sake all over Pakistan.

Returnability: Pepsi Co ( mirinda) is definitely very strong in a way that unsatisfactory items can be

returned and modified on the spot. This is true for both the consumers and the suppliers. They have got laid down a system through which they can effectively manage this need. The suppliers are informed to take down the

comments and the address or phone numbers from the individual who is going back the bottle. It seems at first a customer always would like the highest level of performance along each one of these dimensions, used however this is not always the case.

DESIGN OPTION FOR Circulation NETWORK::

Distributor Safe-keeping with Carrier Delivery:

In Pepsi Co ( mirinda) inventory is not presented by the manufacturers at the factories but is held by vendors/

retailers in intermediate warehouses and package carriers are used to transport the products from

the intermediate location to the final customer. This requires distributor storage area to keep high

levels of inventory because distributor/shop aggregates demand doubt to a lower level

than the manufacturer.

Transportation costs for Pepsi are somewhat lower because an economic mode of transportation (e. g. truckload) can be employed for inbound shipments to the warehouse, which is closer to the customer. Service cost is high because of a lack of aggregation and often conclude with higher processing costs. The info structure needed is not that complex.

The circulation warehouse serves as a buffer between company and customer. Real time awareness between customers and warehouse is needed whereas as awareness between customer and maker is not needed. Response time is also reduced.

Customer convenience is high and order visibility with manufacturer storage becomes easier. Distributor

storage is perfect for medium to fast moving goods and it can also handle higher-level of

variety than retail stores

FIGURE 7

VALUE OF DISTRIBUTION SYSTEM:

There are quite simply two the different parts of distribution

Storage

Distribution

The storage space facilities of RBL were created in order to improve the timely availability of the product. For this purpose the distributors are fully equipped with facilities that are had a need to ensure intensive supply of the merchandise. The storage area facilities are made to contain the maximum possible inventory items which are needed at any given time. RBL has generated several self storage nearer to the market in order to boost

availability.

Transportation conducts inventory movement from point to point in supply chain of RBL. It incorporates a combo of methods and routes at different levels. Transportation selections have a huge effect on the responsiveness strategy of the business enterprise. RBL has several contracts with several vendors with multiple transportation facility that ensure the maximum possible transportation of inventory within a brief period of energy. The distribution does not work between specific resource string components but it performs a basic function of

integration between all supply string components.

The "Pepsi Co" syndication system linked the complete supply chain for any product categories. The distribution centers and its own information network play a key role in that respect. The major thing is to carefully observe sales of items and offer short replenishment circuit times. The vendors offer stored deliveries too many retail

outlets in the twin locations. Different products are being provided quickly on pre-orders. The syndication system is versatile enough to alter delivery agenda depending on customer demand.

The Place Distributor Professionals maintain a connection with the retailers to be able to book and

place the requests. Whenever a store places an order it is immediately sent to the supplier

through the distribution supervisor. Now RBL receives orders from all circulation centers and the shipment department gives the orders. On the circulation centre, products from the manufacturer are supplied into different trucks and each pickup truck makes deliveries to multiple retail stores. The number of stores depends

upon the sales level. The machine works on trust and does not require the delivery person to be

present when store employees check out the delivery. This reduces the delivery time at each store.

Each vehicle has a capacity of 1572 cans. The syndication department is direct connection with the manufacturers and continues upgrading inventory levels. They retain in stock extra three times stock to overcome external uncertainty. The distribution team is in charge of all all of the the merchandise in their stock portfolio. PepsiCo's overall circulation network spreads throughout Pakistan connecting the remotest of places and providing great customer support.

Globalization has increased your competition that the business for its products like mirinda is constantly coming up with new projects, campaigns and distribution.

RECOMMENDATIONS:

RBL does not have proper enabling solutions such as EDI, ERP, RFID and EDD. they must be having that for the better performance of its source string activities. These engagements would

Identify specific opportunities to improve operational performance and keep your charges down within your making, assembly, supply chain, and customer care processes

Define specific process changes and the auto-id technology required to streamline each process step

Address the business, manufacturing, logistics, it, and financial implications of RFID -- including starting items and scale-up plans

When integrated with enterprise source planning (ERP) system, demand planning applications can help:

Compare computed forecasts to actual results over time for trend analysis.

Focus on "hot areas" to get ready for what's coming into high demand.

Share forecast information safely via the net through role-based portals.

Reduce working costs.

Streamline development.

The final result: lower inventory costs, fewer stock outages, faster time to advertise, and more comfortable customers.

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