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Transform Research and Development withSAP S/4HANA®

S/4HANA

Update 1610


White Paper Backgroundand Key Definitions

The information outlined below is helpful to understand the contents

of this value proposition white paper. It gives clear details on the objective

and scope of the paper. Key definitions are also provided for select sections

of the paper to provide further clarification.

DELIVERABLE OBJECTIVE

Provides information on the value in moving from an ERP on a traditional database to SAPS/4HANA® and cloud and line-of-business (LoB) solutions

KEYDEFINITIONS

Within the process and sub-process deep-dives, there is detailed content in table format articulating the following:

Pain Points

Major customer business and IT challenges

Current State With ERP On Traditional Database ERP capabilities that are available on a traditionaldatabase

SAP S/4HANACapabilitiesCapabilities shipped with the latest release of SAP S/4HANA

Cloud And LoB Extension EnhancementsAll other solutions that can be integrated with SAP S/4HANA and provide business value. For example, SAP S/4HANA and the SAP Integrated Business Planning solution, or SAP S/4HANA and the SAP Manufacturing Integration and Intelligence(SAP MII) application. These solutions are notembedded in SAP S/4HANA, but integration scenarios exist for these.

2017 – Planned Innovations*New functionalities planned for 2017 release of SAP S/4HANA or new integration possibilities planned with this release.

With the value proposition section, all quantified benefits are conservative, estimated improvement ranges tied to the top value drivers. They are based on early adopters or new developments and enhancements of SAP S/4HANA and LoBand cloud enhancements that can drive value. Keep in mind that these should be used as a guide. We recommend working together to assess your current maturity and the value of moving to SAP S/4HANA in order to develop a personalized business case.

*Detailed road map available on SAP.com

(customer login required)

This document and SAP’s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, included but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement.

Last Update

SAP S/4HANA 1610 release. All updates made to the deep-dive process sections as compared to the SAP S/4HANA 1511 white paper are italicized

Business Benefits

Key value drivers that are impacted with SAP S/4HANA shipment and cloud and LoB capabilities.

http://www.sap.com/roadmaps


Agenda

SAP S/4HANA Research and DevelopmentCapability and Value Proposition Overview 4

Enterprise Portfolio and Project Management Deep-Dive* 9

Integrated Product Development Deep-Dive* 12

Value Proposition 16

Customer References 17

*Any updates vis-a-vis SAP S/4HANA 1511 paper are italicized in the deep-dive sections


TRANSFORM YOUR RESEARCH AND DEVELOPMENT WITH SAP S/4HANA

SAP S/4HANA Research and Development Overview

A successful research and development (R&D) department brings new designs to life with speed and accuracy based on market, customer, and quality insights. R&D prepares the downstream departments to manufacture, sell, and service products with high quality and low cost while continuously iterating designs to create more profitable, desirable, and reliable products. Digital tools are needed for rapid design-prototype-test iterations to foster a “fail fast and fail cheap” approach. There is also pressing need to simplify the complexity in downstream processes such as manufacturing, service, and sales to execute a “lot size of one.” An intelligent, integrated, and visual product innovation platform is essential for efficient product development, faster time to market, and fundamentally better initiative success rates.

With SAP S/4HANA as the digital core, customers can iteratively and more collaboratively build a foundation of requirements-driven smart products that are brought to the market faster with full compliance and a wide range of configurations and variants. SAP S/4HANA Research and Developmentallows companies to gain live visibility into idea pipeline, portfolio prioritization, project actuals versus budget, new product design, development history, engineering changes, and finally phase-out.

VolvoImplementing a resource management process based on SAP HANA® allowed Volvo to gain insights into the demand and supply of development resources for current and new development projects across the entire organization.

“Implementing SAP® Portfolio and Project Management has greatly improved project and resource control for Volvo.”

Stéphane Perrin, Director of Product and Project Management Solutions, Volvo Group

Varian Medical SystemsVarian Medical systems, a leading

manufacturer of medical devices,

leverages the SAP Product Lifecycle

Management (SAP PLM) application to

plan, forecast, and execute its product

development projects. It achieves a high

degree of standardization and efficiency

to support a globally distributed product

development environment.

“The SAP 3D Visual Enterprise applications have reduced the time to create complex training materials from a week down to two days. It also provides a higher level of engagement and technical understanding for our product engineering groups. Overall, we are pleased with the business benefits of the SAP 3D Visual Enterprise applications.”

Snehashish Sarkar, Director, Enterprise Wide IT Engineering Applications, Varian Medical Systems

Ideation and Concept Development

Portfolio and Project Management

Product Development

ComplianceManagement

• Innovation campaigns running inside and outside the enterprise

• Repository for ideas and feedback for development-to-concept stage

• Respond quickly to customer inquiries and requirements

• Coordinate resources across a project’s lifecycle

• Use performance metrics to make informed decisions

• Support for product, service, and asset lifecycles

• Reuse existing components and recipes

• Do costing simulations• Manage change-

controlled structures and variants

• Hand over to manufacturing and service, with full design authoring tool integration

• Design products keeping material, global, regional, and industry compliance

• Prepare quality and safety sheets for downstream use


SAP S/4HANA RESEARCH AND DEVELOPMENT VALUE PROPOSITION SUMMARY

SAP S/4HANA enables companies to integrate, embed intelligence, and visualize the entire R&D process from idea, to product, to production, to service, and disposal. Connected and individualized products can be developed with full compliance and shorter time to market.


• Run design processes on live insights into customer

needs and market opportunities

• Perform multilevel “what if” analyses with predictive

insights to drive better design decisions

• Analyze live performance of the project portfolio with

predictive insights at any stage of the innovation process

• Simplify access to project information for stakeholders

and team members with the ability to drill down

• Define and analyze product costs and manage all

engineering changes effectively along the lifecycle

• Create a platform as the single digital backbone of

product master data for internal and external

collaborations across the enterprise

• Provide connected design capabilities, integrating

requirements, mechanics, electronics, software

components, and simulation, as well as synchronizing

all downstream product development needs

internally and externally

• Manage flexible, high-performing, and ease-of- use

configuration and classification for product

individualization

• Integrate and validate compliance requirements in the

development process and manage product declarations

as part of the product properties for all variants across

the product supply chain and lifecycle

• Plan and communicate resource demand to match

available resources in the long and short term

• Simplify decision making and processes across the

enterprise for manufacturing, service, and

marketing through intuitive visualization


RESEARCH AND DEVELOPMENT (R&D) CAPABILITIESOutlined below are the primary capabilities for research and development where value can be achieved through SAP

S/4HANA and SAP cloud and LoB solutions.

Enterprise Portfolio and Project Management

• Portfolio management

• Project management

• Commercial project management#

• Project financials control

• Project logistics control

• Idea management*

• Resource management

Integrated Product Development

• Product development

• Production bill of materials (BOM) management

• Product compliance

• Recipe development

• Handover to manufacturing

• Authoring tool integration*

• Product costing*

• Variant configuration

*Requires additional products integrating with SAP S/4HANA#Managing customer-specific ETO (Engineer-To-Order) projects typically in industrial machinery and components (IM&C), aerospace and defense (A&D), and automotive industries



SCENARIO: MANAGING RESEARCH AND DEVELOPMENT PROJECTS SAP S/4HANA provides reengineered and simplified business processes that can yield significant benefits, transforming the execution from multi-step, batch-driven processes with latency in terms of key performance indicators to real-time processes with actionable insights.

SAP Portfolio and Project Management for SAP S/4HANA

Project-related information is distributed across various ERP applications. Details are lost due to aggregation and replication.

An intuitive user experience on any device, providing a single, consolidated source of the truth for all project-related information at the lowest level of granularity.

Traditional ERP

SAP S/4HANA

Aggregation

Out of Sync!

Financial Accounting

Human Resources

Procurement

Product Lifecycle

Aggregation

Cross-Project Reporting

Project/Program Manager Uses Multiple Screens And Reports

No Details

One Single Point of Entry Real-time Cross-project Analysis

Direct Access To Granular Information

Financial Accounting

Human Resources

ProcurementProduct Lifecycle



Typical Pain Points Current State With ERP On Traditional Database

SAP S/4HANAEnhancements

2017 Planned Innovations

Business Benefits

Enterprise Portfolio and Project Management Deep-Dive

• Ability to collect ideasacross the enterprise.The impact analysis is

run by means of a batch process

• Visibility into complete project portfolio, profitability,

and investment structure. Planning, progress, roll-up,

analysis, andsimulation are done in batch runs

• Increased revenue from new products

• Increased likelihood of

new products meeting revenue margin targets

• Innovation campaigns run in the enterprise; Live expert

collaboration and voting for ideas. Discovery of promising

ideas and handover to a stage-gate-driven portfolio process

(SAP Innovation Management solution)

• Live tracking of financial project KPIs by leveragingSAP HANA® in-memory

technology

Cloud/LoB ExtensionEnhancements

(continued next page)

• Additional SAP HANA-based core data services views enable users to retrieve additional project-related information in real time and thus make adjustments in real time to achieve better performance of projects

• SAP S/4 HANA real-time project analytics for better product development decisions

• Role-based SAP Fiori® user interfaces (UIs) enable project managers and stakeholders to get started quickly and easily access accurate information about project progress and portfolio performance

• Inability to prioritize project portfolio and product development

decisions in alignment with corporate strategy

• Inability to collect and select relevant consumer-focused

ideas from across the enterprise




Cloud/LoB Extension Enhancements

BusinessBenefits

• Delayed projectmilestones and missingdelivery of required

gate deliverables; inability to identify deviations until too late

• Lack of transparencyinto project resourcedemands and allocation

leads to project delaysand low resourceutilization

• Slow access to projectand task details reducesproductivity of project

management resources

• Stage-gate-drivenR&D projects alongwith scheduling give

project managementoperations transparent and

accurate view of true project status

• Capacity planning,detailed projectrole planning, and

project staffing in a single application

• SAP Fiori UIs for project management roles like program and project manager, resource manager, and project team members with embedded analytics to enable insight to action

• Project progress monitored in SAP Fiori-based project Gantt chart with system-guided navigation to critical project tasks

• Real-time access toresource availability, skill sets, and organizational

assignment during project staffing process

• SAP Fiori job scheduling app for project version for financial control

• Accelerated access to project and task details through SAP HANA in-memory technology

• Cross-application, multi-resource staffing and scheduling availability

(SAP MultiresourceScheduling application)

• Bidirectional

synchronization of project information with external scheduling tool

(SAP Enterprise Project Connection application)


• Faster time to market

• Early identification of project deviations

• Increased portfolio and project management resource productivity

• Reduced R&D expense

• Better resource utilization

• Increased efficiency of

development teams



• SAP Fiori-based project status report to improve visibility into

project performance and monitoring of project milestones

• Seamless staffing and service procurement workflow with SAP SuccessFactors® and SAP Fieldglass® solutions, allowing for better utilization of project resources





Business Benefits

• Inability to reportproject costs andprocurement data

accurately increasesrisk of uncontrolleddeviations and waste

• Unsecured communication of project documents and product

sustainability data through unencrypted e-mails and other

communication channels

• Project financial and logistic information issometimes inaccurate

due to batch loadprocess; drill down not possible

• Secure projectdocument exchangewith partners,

suppliers, and customers

• Direct and accurate access to project financial and logistic information;

provides ability to drill down into details for project costs, resource

usage, and progress

• Easy access to project master data with new

SAP Fiori list reports and object pages

• Share and collaborate on project documents internally and externally

(with suppliers and customers) in a secure cloud environment

accessible anywhere, on any device (SAP Document Center solution)


• Early identification of

project deviations



• Work breakdown structure serves as basis for hierarchical

project accounting; actual project cost visibility by using

multiple applications

• Change the status of a work breakdown structure (WBS)

element through SAP Fiori apps; actual project cost visibility

by using one integrated application


• Inability to plan project costs and budgets efficiently and track

actual versus planned costs leads to budget overruns


• Simplified user interface to create and maintain project controlling structures and related accounting information

• Enhanced user interface for project structure and financial and logistics reporting (SAP Fiori UX)

• Integrated procurement processes with SAP Fieldglass solutions

• SAP Fiori-based project status report to improve visibility into project performance and monitoring of project milestones and actual costs






Business Benefits

Integrated Product Development Deep-Dive

• Inability to bringconsumer-drivenproduct offeringsto market in a timely mannerleads to low brand equity andstagnant growth

• Inability to use existingknowledge or leverageexternal partnershipsleads to inefficiency

• Inability to plan andmanage engineeringchange leads to highdownstream costs

• Inability to identifyreasons and/or reduce unsuccessful product initiatives

• Product-relateddocuments managedand linked to ERP

master data throughout the end-to-end process

• Context-sensitive

analytics

• Ability to releaseengineering changes

for a unique lot number and release date

• Increased revenuefrom new products

• Reduced engineering

change cost


• Higher gross margin

• Searchabledevelopment history to increase reuse or

decrease time and investment indevelopment efforts

that go nowhere

• Increased profitability from executing

engineering changeswith full knowledge of downstream costs

• Enhanced context-sensitive analytics provides instant transparency on live data

• Costs and otherdimensions calculated for new products in the early

stage of the product lifecycle to quickly identify cost drivers and

easily simulate and compare alternatives(SAP Product Lifecycle

Costing solution)

• Cloud-enableddocument

management and collaborationaccessible

anywhere on any device (SAPDocument Center)



• Project and design network services help all internal and external

team members leverage a single digital backbone of product data

(SAP HANA Cloud Platform)

• Unified change

management with sophisticated workflow across all aspects:

mechanical, electronic, and software engineering





Business Benefits

• Lack of complete,integrated view of cyber-physical

products (completeview including smart product

aspects)

• Tests and simulations are not leveraged in the

early design phases

• Loss of information along the end-to-end process makes it

challenging to enable seamlessmanufacturing and

service

• Mechanical andelectrical disciplines are

integrated in end-to-end designprocess

• Bill of material androuting management

• Visual handover to

manufacturingsupporting bill ofmaterials (BOM),

routing, and visualwork instructions

• Simplified decisionmaking and processes for

manufacturing,service, and marketing through

intuitive visualization (SAP 3D Visual Enterprise

applications)

• Single multidiscipline product definition across the enterprise reduces

development errors

• Enhanced CAD integration based on the SAP Engineering Control Center integration tool with market-leading authoring tools to support cross-discipline product definition

• Management of embedded software versions



• Reduced engineer change cost

• Reduced fines and recalls due to non-compliance


• Reduced manual rework in

manufacturing

• Reduced engineeringchange cost


• SAP Fiori app to maintain multiple BOMs in an intuitive, easy-to-personalize UI leveraging enhanced analytics capabilities

• Compatibility assurance between parts of the product, the product, and the ecosystem


• End-to-end 360-degree product view including requirements, mechanics,

electronics, software components, and simulation

• Project and design network services integrate into supplier and asset networks,

bridging the gap between engineering, manufacturing, and services


• Live multilevel BOM explosion

• Unified engineering and manufacturing BOM for cyber-physical products

(mechanical, electronic, or software)

• Requirement management

integration enables bi-direction information flow for a clear development direction





Cloud/LoB ExtensionEnhancements

Business Benefits

• Inaccurate recipes for R&D, plant, and site lead to a breakdown of

enterprise processes:procurement, production,services, and compliance

• Lack of access to allcompliance obligations for product segment,

material, and markets,and inability to keep up todate with ever-changing

requirements leads to high effort, delayed go to market, fines, recalls, and

loss of brand equity

• Inability to connectdirectly with suppliers

and customers to receive and provide product sustainability information

• Integration withthe SAP Recipe Management

application

• Ability to access rules available in the ERP

instance for selected markets and product categories

• Product safety andstewardship solutionsautomate compliance

determination andembed compliancemetrics in the R&D

environment

• Accurate recipes for R&D, plant, and site by using different

recipe types (with recipe development)

• SAP Fiori-based UI apps

for recipe developers

• Ability to create,view, and editmultiple recipes

simultaneously

• Some key reports for margin control, such

as finding percentage of pure substance in all recipes, can be

run live

• Simplified,streamlined, andautomated product

compliance processes and embeddedcompliance in the

R&D environment(SAP Product Stewardship Network

and SAP EHS Regulatory Documentation

OnDemand content service)


• Reduced scrap

• Increased gross margins

• Reduced compliancemanagement costs

• Reduced fines and recalls

due to non-compliance



• Target-driven, streamlined recipe development to optimize compliance process

• State-of-the-art formulation tool to guide product creation and data

maintenance

• Integration to cloud services for compliance checks and

declaration based on up-to-date data

New product compliance solution enabling real-time product compliance processes and analytics embedded into core business processes:

• Covering all product compliance processes, including product marketability and chemical compliance, safety data sheet and label management, and dangerous goods management

• Integrated into core end-to-end business processes

• State-of-the-art user experience

• Embedded content for simple content consumption

• Built on SAP HANA for superior analytics and performance






Business Benefits

• Handling configurationmodels is complex and costly

• Support ofconfigurations involving multidiscipline

definition for individualized products is challenging, labor-

intensive, and erroneous

• Variant configuration can be handled through the complete business

process (engineering, sales and distribution,planning, etc.)

• SAP HANA-optimized low-level configuration in

context of materialrequirements planning (MRP)

simplifies variant management

• Embedded analytics

for classification and configuration

• SAP Fiori UI for

classification

• Increased revenuefrom new products



• New high-performance configuration engine as the key enabler in engineering,

manufacturing, sales, and beyond to manage a “lot size one”

• Flexible SAP Fiori-based UI for configuration and classification

• Simulation environment for bill of materials (BOMs) using SAP Fiori UX

• Solution proposals through digital assistance with improved user guidance, such as more precise values restriction

• Tight integration of the configure-price quote process

• Real-time added-value insights from combining business data with classification and variant configuration data, provided by predefined scenarios based on CDS (Core Data Services) views



SAP S/4HANA Research andDevelopment Value Proposition

Strategy Enablement

Business Benefits

Risk Management

Employee Engagement

STRATEGY ENABLEMENT

RISK MANAGEMENT

BUSINESS BENEFITS

EMPLOYEE ENGAGEMENT

• 10–20% reduction in effort and touches to define and release individualized and market-specific product variants

• New business models possible, such as “as-a-service”

• 10–30% faster design process for smart product offerings

• 10–55% faster time to market with robustproduct data management processes

• 10–40% improvement in accuracy of engineering changes

• 10–50% faster responses to customer inquiries

• 20–80% reduction in reporting time for compliance visibility of BOM and recipe across the lifecycle

• More compliant products on the market and reduction in fines and recalls

• Initiative visibility – one source of the truth from R&D to production

• 10–20% increase in revenue from new products

• 2–5% reduction in direct material costs

• 20–30% reduction in R&D expenses

• Increased product profitability

• 10–20% reduction of manual rework in manufacturing because of incorrect or incompatible product configuration

• 15–20% more new products meeting revenue targets

• Development collaboration with internal and external partners

• Visual enablement across the enterprise, leading to improved decision making

• Improved accuracy of initiative book value and launch criteria

• Live planning, tracking, and monitoring of all deliverables and time-, cost-, and work-related aspects of projects

• Higher productivity and empowerment of R&D employeesthrough role-based SAP Fiori apps

• 70–80% faster management of project tasks

*Benefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA

and LoB and cloud capabilities. As each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value

proposition for your enterprise.

$


VOLVO

Highlights

Implementing a resource management process

based on SAP HANA allowed Volvo to gain

insights into the demand and supply of

development resources for current and new

development projects across the entire

organization.

The scope was one central portfolio and project

management solution for 13,000 users,

including 1,100 project and resource managers,

across 24 sites and various business units

around the world. Research and development

costs were reduced by 30% as well as

reductions in project lead times.

Industry

Automotive

www.volvo.com

VARIAN MEDICAL SYSTEMS

Highlights

Varian Medical systems, a leading manufacturer of

medical devices, leverages the SAP Product

Lifecycle Management (SAP PLM) application to

plan, forecast, and execute its product

development projects. It achieves a high degree of

standardization and efficiency to support a globally

distributed product development environment.

With SAP PLM, it replaced outdated 2D models with

3D models and visual work instructions that provide

a higher level of visual accuracy, understanding,

and user engagement for product and product

support engineers. Faster preparation (70%

faster, from one week to two days), delivery, and

consumption of detailed training material occurred

when moving from paper-based manuals to

interactive 3D deliverables.

Solution

SAP HANA and SAP 3D Visual Enterprise

Industry

High tech

www.varian.com

MERCEDES - AMG

Highlights

Mercedes-AMG needed real-time engine testing that leverages the Internet of Things (IoT). The company also wanted to identify engine quality improvement options using predictive analytics. It deployed the SAP Business Suite powered by SAP HANA to predict issues using SAP BusinessObjects™ Predictive Analysis and delivered test results to workers on tablets using the SAP BusinessObjects™ Business Intelligence platform for faster resolution.

• Dashboard to show engine failures and test results

in real time

• Higher testing capacity, helping reduce overall

capital expenditures

• Predictive analytics based on detailed sensor data,

enabling innovative scenario testing, optimized

development, and lower production costs

SolutionSAP Business Suite powered by SAP HANA SAP BusinessObjects Predictive Analysis SAP BusinessObjects Business Intelligence platform

Industry

Automotive

www.mercedesamg.com

Customers Are Achieving Value from SAP

Solution

SAP HANA and SAP Portfolio and Project Management

Click here for Volvo source reference

Click here for Varian Medical Systems source reference.Click here for Mercedes-AMG source reference.

http://www.volvo.com/

http://www.varian.com/

http://www.mercedesamg.com/

http://www.sap.com/documents/2015/02/3c431e46-1d7c-0010-82c7-eda71af511fa.html

http://www.sap.com/documents/2015/02/4027e445-4c7c-0010-82c7-eda71af511fa.html

http://www.sap.com/documents/2014/10/1cfa7b23-0a7c-0010-82c7-eda71af511fa.html


Your Path To SAP S/4HANA

Every enterprise is unique, with different starting points and end points. Whether you are starting as a net new implementation or digitizing an existing SAP landscape, SAP can help. We have been working with enterprises of all sizes and ¡n all industries. Based on the depth of this experience, SAP has a robust portfolio of services to help you define your road map to SAP S/4HANA.

Customer Engagement Methodology

No matter which path applies to your enterprise, SAP has a structured four-phased approach to ensure success – executive alignment, value discovery, validation and executive readiness, and value delivery.

For more details, please see the brochure Driving Value in a Digital Economy

Value Assurance Packages

Take advantage of SAP Value Assurance service packages for SAP S/4HANA to quickly and safely harness the power of next-generation software and in-memory processing.

For all value assurance packages and for the successful and seamless transition to SAP S/4HANA, please visit the link Transition to SAP S/4HANA.

SAP S/4HANA Road Map

With a three-year detailed road map, SAP gives customers the transparency to accelerate their transition to an SAP S/4HANA landscape – SAP S/4HANA Road Map.

Start Today With A Trial – SAP S/4HANA Trials

Additional R&D References

SAPinsider SAP S/4HANA Special Report

SAP S/4HANA blogs

Reimagine Business in the Digital Economy: Use Cases with SAP S/4HANANeed to Combine Hardware, Electronics and Software Data for Product Development

Infographics/slidesDevelop new products and services based on value-driven investment decisionsDesign Orchestration

VideosSAP Engineering Control Center: Connect Engineering to Your Enterprise

SAP S/4HANA demo videosSimplified Portfolio and Project Management with SAP S/4HANA

http://go.sap.com/documents/2016/05/f2d18a54-717c-0010-82c7-eda71af511fa.html

http://go.sap.com/services/transition-to-s4hana.html

https://support.sap.com/content/dam/website/roadmaps/en_us/cross-topics/SAP S_4HANA, on-premise edition Road Map.pdf

https://go.sap.com/cmp/oth/crm-s4hana/index.html

http://sapinsider.wispubs.com/Assets/Special-Reports/2016/April/SAP-S4HANA-special-report?redirect=true&site=alloy

http://www.sapserviceshub.com/i/587436-reimagine-business-in-the-digital-economy-use-cases-with-sap-s-4hana

http://www.sap.com/documents/2015/02/b6377507-197c-0010-82c7-eda71af511fa.html

http://www.sap.com/documents/2014/11/f2bc7e23-0a7c-0010-82c7-eda71af511fa.html

http://www.sap.com/documents/2014/11/06037f23-0a7c-0010-82c7-eda71af511fa.html

https://www.youtube.com/watch?v=XwPn2FUvrxw

https://www.youtube.com/watch?v=91Gv-gLHREg

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