Category: Casestudy

Supply chain mapping

Leveraging Supply Chain Mapping Solution to Identify Key Logistics Savings and Reduce Transportation Costs by 15% for a Chemical Manufacturer

Chemical Manufacturing Industry Overview

Low feedstock costs and extensive investment capital have generated a series of new chemical projects in the US. While this growth is a boon for the chemical manufacturing industry, companies need to address existing transportation issues. New logistical challenges could impact the movement of new chemicals and prohibit the industry from realizing the full benefits of increased production. It could result in excess inventories, capital expenditures, and operating costs. Addressing these challenges will require the cooperation of all stakeholders, chemical manufacturers, and shippers for companies.

Business Challenges Faced

The client, a bulk chemical manufacturer wanted to find a new route to improve their transportation efficiency. It was spending over $50 million annually to transport tons of products across the US and Canada. However, there was no effective strategy and the client lacked the ability to optimize routes. They relied heavily on disparate data sources to map out their distribution plan. The database available lacked master data of suppliers and information about financial relationships and partnerships. They required much better visibility into their transportation processes to brings costs under control and improve the shipping strategy to save a significant sum of money.

Performing supply chain mapping study is crucial for companies to optimize routes and reduce transportation costs. Request a proposal to access our supply chain mapping solutions for FREE now!    

 

Our Research Approach

The supply chain mapping experts at SpendEdge conducted a comprehensive assessment that included interviews, current-state workshops, and a logistics management process evaluation. They identified the existing pain points, assessed the current state of the supply chain against leading practices, and calculated potential savings of a transformation. Also, they submitted a business case to the company’s managers to assist the client in its preparations for negotiations with vendors.

The supply chain mapping solution provided enabled the client to balance supply and demand and improve route selection based on lowest transportation cost. The insights offered helped in redesigning future processes covering end-to-end solution. Processes allowed the client to create monthly plans and perform in-month ‘what-if analysis’.  With new planning processes, shipping routes were optimized within normal planning cycle and on ad-hoc basis for any unprecedented risks.

Wondering how you can develop an effective supply chain mapping template and gain insights into suppliers’ strategies?

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Engagement Outcome

Today the company has identified six logistics savings opportunity levers and has reduced its transportation costs by 15 percent, thereby saving millions of dollars annually. The supply chain mapping study has empowered the client to achieve the company’s operational targets, identify key logistics savings opportunity levers, and improve supply chain planning capabilities beyond transportation.

Conducting supply chain mapping and visualization requires companies to improve transportation planning. Subscribe now to enjoy free access to our web-based platform for better insights. 

Importance of Supply Chain Mapping

  • Supply chain mapping improves visibility by showing buyers exactly who and where their suppliers are based.
  • It reduces the risk of suffering damage to companies’ finances, reputations and legal standing.
  • Investing in a supply chain mapping solution demonstrates to other companies that a company is committed to corporate social responsibility.
  • Provides suppliers’ location and enables companies to make better-informed choices.

To know how you can improve the supply chain mapping process, request more information from our analysts.

cost analysis

SpendEdge’s Supplier Cost Analysis Solution Helped a Construction Equipment Manufacturer to Identify $7 Million in Savings

US Construction Equipment Industry Overview 

The construction equipment industry in the US produces equipment for residential, nonresidential, highway and other infrastructure construction. Demand for industry products is based on the levels of private construction spend and infrastructure projects. However, the US construction equipment industry is highly globalized and susceptible to changes in global economic conditions. In recent years, the industry has been challenged by the appreciating US dollar and exchange-rate dynamics.

Business Challenges Faced

The client, a subsidiary unit of a large construction equipment manufacturer had a distinctive business model than other units. Large equipment subsidiaries of the parent company sold high revenue products with minimal competition, allowing them to bear higher overheads. However, the client sold high volumes of smaller and low priced machines with the lean competition.

During China’s slump and government’s trade war, the client came under high pressure from the parent company to reduce the cost of goods sold (COGS). Since purchased parts constituted most of the client’s COGS, it realized the need to reduce the direct material spend. However, it required delivering a greater amount of value to suppliers without asking for price reductions or hampering supplier relationships.

Want to know how performing supplier cost analysis can help you make informed purchasing decisions? Request a free proposal and we will get back to you with customized supplier cost analysis solutions. 

 

Our Research Approach

To address the specific needs of the client, the supplier cost analysis team at SpendEdge adopted a three-phased approach. The first step involved economic costing in which a top-down analysis of supplier prices was carried out by the experts based on the financial statement from suppliers and their industry comparable. Historical trend modeling was performed in the next step to examine the changes in costing inputs such as raw material, energy, overtime vs. historical supplier pricing. Finally, the best cost modeling techniques were identified based on the supplier’s unique products.  

With the supplier cost analysis solution, the client created three independent assessments and provided a verified, triangulated cost that can be trusted by suppliers as a solid data point. They gained a detailed understanding of the various components and identified potential suppliers to procure products and services at the right prices.

Wondering how supplier cost analysis in procurement can help you procure products at the right price levels?

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Engagement Outcome 

The comprehensive supplier cost analysis helped the client to analyze over 50 suppliers accounting for $200 million of OEM spend. This helped the client to identify $7 million of extra profit apart from identifying several other cost savings opportunities. Within a short span of time, the client became one of the most profitable divisions in the parent company.

Conducting supplier cost analysis is crucial for companies to better negotiate with suppliers. Subscribe now to access accurate supplier cost analysis insights from our procurement experts. 

How to Perform Supplier Cost Analysis? 

  • Develop a supplier cost analysis template that can cover direct and indirect costs along with the inflation/expansion costs.
  • Calculate benefits such as reduced taxes/fees and increased output. 
  • Collect the discrete cost and benefit numbers to determine the net result on cash flow over time.

To know how you can successfully perform supplier cost analysis, request for more information from our analysts.

steel industry

Reducing Inventory Costs by 40% by Accurately Predicting Demand for a Company in the European Steel Industry

European Steel Industry Outlook

The European steel industry has long held a strategic place in the economy, fostering innovation, employment, and growth. However, the uncertainty surrounding the EU steel market in terms of demand and supply fundamental due to slowing global economic momentum has led to the weakening of the EU economy. Companies are compelled to formulate best procurement practices and supply chain strategies to confront these challenges and return to pre-crisis production levels. 

Business Challenges Faced

The client, one of the largest firms in the European steel industry was facing significant losses due to overproduction and slump in demand. They wanted to focus on asset utilization to minimize their losses. However, this required revamping their supply chains in a manner that could reduce operating costs. Also, it required synchronization of procurement, logistics, and production schedules with dynamic demand forecasts. The client, therefore, approached SpendEdge to gain a comprehensive overview of the changing market scenarios in Europe and streamline their disparate enterprise functions to enhance business agility.

Inability to gain market insights can result in overproduction and financial losses for companies. Request a free proposal to access our tailor-made solutions and European steel industry statistics. 

Our Research Approach 

To cater to the specific needs of the client, the supply chain experts at SpendEdge carried out a detailed European steel industry analysis. They generated actionable insights around crucial aspects of the supply chain to help the client identify process-related bottlenecks, reduce purchasing and supplier management costs, and optimize the procurement process.

The solution offered covered the issues that were driving the costs such as the price of raw materials, cost structure of suppliers, and the global economic outlook. It also delivered insights into the spot market and contract market apart from price variation in each market. This enabled the client to optimize their steel spend and optimize allocation. Also, the report provided helped the client to re-allocate processing to low-cost producers in the value chain and evaluate options of buying from different plants from the same supplier and different suppliers. This assisted the client to devise effective strategies and increase competition in the European steel market.

Want to know how our customized European steel industry analysis helped the client to identify cost-driving factors and optimize their steel spend?

Get in touch with our experts now!  

Engagement Outcome

SpendEdge’s accurate demand forecasts empowered the client to optimize functions such as forecast-to-stock, order-to-cash, procure-to-pay, prepare effective production schedules, and optimize inventory levels to significantly lower operating costs. This helped the client to reduce inventory costs by 40% and maximize output with integrated sales production, and procurement. The report offered also enabled the client to take real-time decisions and adapt quickly to the changing European steel industry.

Predicting demand accurately is crucial for companies in the European steel industry to improve the procurement process. Request free access to our web-based procurement platform to keep up with the latest market insights. 

Top Trends Impacting the European Steel Industry

steel industryTo know in detail about the factors impacting the European steel industry growth, request more information for our experts.  

Supply Chain Planning

Implementing Supply Chain Planning Solutions to Improve the Forecasting Accuracy by 20% and Reduce the Number of Warehouses for a Food Company in the UK

Food Industry Overview

The food industry is the UK’s largest manufacturing sector. It employs over 400,000 people and plays a prominent role in the economy. However, the market remains uncertain for companies. Brexit could have significant implications for the growth of the sector, thereby negatively impacting the supply chain. Although the government’s position has been belatedly accepted, some transitionary arrangements will be needed by companies to prevent complete chaos.    

Business Challenges Faced

Our client, one of the leading food companies in the UK found that their production costs were inflating end-to-end supply chain expenditure despite managing distribution operations well. When the leadership analyzed production cost issues, they found that the distribution network was least responsible for the issue. As a result, the client looked at how they can improve their supply chain planning to minimize some of the production costs. With SpendEdge’s supply chain planning solutions they wanted to

  • Reorganize the supply chain.
  • Take advantage of synergies and economies of scale.
  • Improve the approach to demand forecasting.

Having a robust supply chain planning process is crucial for companies to manage distribution operations efficiently in the wake of Brexit. Request a proposal to access our supply chain planning for FREE now!

Our Research Approach

To effectively address the client’s requirements, the experts at SpendEdge developed an effective supply chain planning strategy. They began by creating a demand plan that could take past sales and future customer forecasts. They connected siloed supply chain planning process to sales, operations, and financial planning process. This helped the client to align their short-term operational planning with their wider business planning processes and gain real-time updates into inventory forecasts and supply.

Deploying real-time supply chain planning solutions, enabled the client to create new scenarios and use their resources wisely to optimize profitability. This improved end-to-end visibility across the supply chain and empowered the client to assess changing consumer sentiments. Furthermore, leveraging supply chain solution allowed them to plan with more accuracy and reduce the risk of stock-outs or having too much inventory.

Wondering how you can gain real-time updates to improve inventory forecasts and reduce the risk of stock-outs? Reach out to our experts and reap the benefits of supply chain planning solutions.

Reach out to our experts for supply chain planning solutions benefits

Wondering how you can gain real-time updates to improve inventory forecasts and reduce the risk of stock-outs?

Engagement Outcome

SpendEdge’s supply chain planning solution helped the client to improve the forecasting accuracy by 20% and reduce the number of warehouses in the UK from 35 to 15. Moreover, the solution offered reduced the finished goods spoilage by 25%

Improving the supply chain planning process requires detailed insights into the market landscape. Subscribe now to enjoy free access to our web-based platform for better insights. 

Enjoy free access to our web-based procurement platform for better insights

Improving the supply chain planning process requires detailed insights into the market landscape

Steps to Improve Supply Chain Planning

  • Introduce new ERP systems with Supply Chain Management (SCM) functionality.
  • Have a standardized ERP system to increase efficiency while saving time and money.
  • Increase internal SCM transparency to reduce unexplained inventory and financial losses.
  • Gain accurate and timely data and information to improve decision-making process.

To know more about supply chain planning steps, request for more information from our analysts.

electronic components

SpendEdge Helped an Electronic Components Company to Reduce the Lead Time From 20 Weeks to 12 Weeks

Electronic Components Industry Overview

The electronic components industry in the UK is undergoing a major set of challenges, ahead of global economic malaise and geopolitical issues. Procurement departments are finding it difficult to address problems such as inaccurate forecasts, sourcing constraints, supplier consolidation, pricing fluctuations, inventory management problems. Optimizing supply chain amid such challenges coupled with supply shortages and overages are further increasing complexities. This is compelling companies to collaborate with firms such as SpendEdge to gain insights to address supply chain risks, supply shortages, pricing complexities, and supplier issues.

Business Challenges Faced 

The client, one of the leading companies in the electronic components industry in the UK very well realized the importance of an efficient and flexible supply chain to improve their operations. However, their ongoing efforts to optimize the efficiency of their supply chain were causing supply disruptions and proving to be expensive. The process was getting time-consuming and resource-intensive than expected due to which certain suppliers were planning to discontinue their services. Apart from this, component shortages, excess supply, risks related to the terms of their contracts with suppliers were major risks impacting the market position of the client. 

Inability to build an agile supply chain can impact the ROI and market position of companies in the electronic components industry. Request a free proposal to access our tailor-made solutions.

Our Research Approach

To help the client better prepare for shortages and improve supply chain operations, the experts at SpendEdge carried out a detailed electronic components industry analysis. They created an accurate forecast based on the sales data and developed a supply chain strategy that focused on lead times. The insights offered enabled the client to differentiate order lead times from replenishment lead times and minimize unnecessary buffers in the supply chain.  

Moreover, the solution offered focused on building strong relationships with suppliers. They identified suppliers who could provide a greater percentage of their output to the client in the allocation method. Also, they provided the solution that empowered the client to move away from single-sourced parts and rapidly select alternative qualified suppliers that could keep their products on schedule.

Want to know how our customized electronic components industry analysis helped the client to identify potential suppliers and reduce buffers in the supply chain?

Get in touch with our experts now!  

Engagement Outcome

SpendEdge’s detailed electronic components industry report helped the client to create a global pricing agreement with component suppliers and ensure the supply of electronic components at lower prices. Also, the insights offered helped the client to build a supply chain process that could plan for long delays of components. The solution offered further reduced the lead time from 20 weeks to 12 weeks on some basic parts.

Gaining accurate market insights and engaging with potential suppliers is crucial for companies in the electronic components industry to address supply chain issues. Request a free demo to access our web-based procurement platform and gain detailed insights. 

Procurement Best Practices in the Electronic Components Industry 

  • Aim for a preferred supplier agreement at full annual volumes with SLAs to ensure consistent supply.
  • Gather all the necessary information such as supplier and manufacturer names, part numbers, descriptions, pricing, and historic annual volumes.
  • Determine desired stock levels against blanket orders and release schedules.

To know in detail about the ways to procure components and address supply shortages in the electronic components industry, request more information for our experts.  

market intelligence

Assessing Competitors’ Category Strategies and Risks with the Aid of Category Market Intelligence Solution

SpendEdge, a leading provider of category market intelligence solutions, has announced the completion of their latest newsletter on assessing competitors’ category strategies and risks with the aid of category market intelligence solution. The article offers detailed insights into the benefits of category market intelligence solution reaped by our clients. The article also highlights how our category market intelligence services helped companies to boost sales, assess market dynamics, analyze competitors’ category strategies, and manage frequently sourced categories.

Boosting Sales by 150% for an Online Fashion Retail Company

Rising global competition makes it difficult for companies operating in the retail industry to position their products and compete with the leading online retail channels. A developing online fashion retail company was facing predicaments in assessing global market dynamics and drivers that were impacting market trends. They wanted to analyze the retail market and assess competitors’ category strategies to compete with top-level companies in the industry.
The category market intelligence report offered helped the client to obtain detailed insights into the latest trends and developments that were going to define the global market. This helped them gain an overview of competitor companies in the international market, obtain accurate buyer insights, and analyze risks. An exclusive range of fashion products was also created by the client targeting the online consumers’ niche that resulted in a 150% hike.

Managing Frequently Sourced Categories by Devising Category Market Intelligence Strategies

Enhancing category expertise and intelligence across all critical areas of the supply network has always been a tumultuous task for companies. One of our clients, a leading transportation services provider wanted to leverage our category market intelligence solutions to build world-class procurement solutions. They wanted to gain granular supplier-specific information to manage frequently sourced categories.

Our category market intelligence experts developed an internal intelligence unit for managing the regularly sourced categories. This involved making the right investments in the category intelligence tools that focused exclusively on a specific supply market. The solution offered helped the client to obtain comprehensive insights into the different categories within the supply network and improve procurement efficiency.

Capitalizing on the Potential Market Opportunities and Identifying Risks 

With the growth of the portable air conditioner market, companies are compelled to invest in specialized equipment and cutting-edge technologies. They are required to set prices competitively to avoid losing customers to other peers. The client, a prominent portable air conditioner company with business units spread across the globe decided to leverage our services to gain insights into the market landscape in terms of market drivers, dynamics, and niches. They wanted to capitalize on the opportunities to gain better visibility into their supply chain activities.

During the course of this engagement, our category market intelligence experts followed a blended approach comprising of interviews and discussions with leading stakeholders in the HVAC industry. They analyzed competitor’s category strategies and assessed the potential risks to comprehend suppliers and the cost structure. This helped the client to gain better insights into the buyers, the potential risks, and product portfolios.

Recent Posts

pricing model

Reducing Spend Overages and Facilitating Additional $150K in Savings for a Middle Market Corporation by Performing Pricing Model Analysis

IT Industry Overview

Mid-market leaders’ confidence in delivering next-generation IT systems seems to be dwindling now. Firms that earlier had the budget to meet the priorities for growth, security and reducing operational costs, are not so positive about their business’s financial outlook. They feel overlooked by partners, investors, and the government. Minimizing budgets, recruitment and security has become more challenging for mid-market companies and compelling them to re-order their priorities to remain competitive. The pressure to deliver new collaboration, reduce risks and costs is forcing them to perform pricing model analysis, achieve savings, and improve transparency for different processes.

Business Challenges Faced

The client, a middle-market corporation in the UK offering IT products and services wanted to perform a benchmarking and pricing model analysis of multi-functional devices (MFD). They wanted to analyze equipment leases and service agreements in order to achieve savings and create transparency. However, the client lacked an effective equipment policy that could keep pace with the rapid growth of the organization. As a result, the client had to lease MFDs from various vendors. The absence of a consolidated asset list, lack of transparency and control around billing, lack of unclear lease terms were proving major roadblocks in their growth. This compelled the client to engage with SpendEdge and address escalating costs in this area.

Inability to perform asset pricing model analysis and address escalating costs can prove to be a major barrier for the growth of middle-market corporations. Request a free proposal to access our complete portfolio of pricing model analysis solutions.

Our Research Approach 

SpendEdge’s experts performed pricing model analysis and analyzed the Service Level Agreement to help the client to delineate service response commitment. They assessed equipment, performed usage analysis and identified potential cost savings. This helped the client to conduct RFP with multiple vendors, measure key metrics, compare bid results and KPIs. With a pricing model analysis solution, the client was better able to negotiate the final pricing plan and contract with the incumbent vendor.

Moreover, the insights gained from the pricing model analysis helped the client to consolidate all equipment leases with a single company, align all leases to end on the same date, and separate and aggregate service agreements within a period of 30-days. Separation of service from lease charges and one price for all MFDs with consolidated invoices enabled the client to pay for actual usage and reduce excess spend substantially. It allowed the consolidation of supplies and helped them streamline equipment types.

Performing pricing model analysis is imperative for companies to consolidate supplies and reduce excess spend.

Get in touch with our experts for customized solutions. 

Engagement Outcome

SpendEdge’s pricing model analysis helped the client to reduce costs by over 40% for long term contracts. The insights offered also helped the client to eliminate contractual obligations regarding auto-renewal obligations, renewal fees, and spend overages resulting in an additional $150K in savings.

Wondering how you can conduct effective benchmarking and pricing analysis? Subscribe to SpendEdge’s platform and gain exclusive access to our reports for conducting pricing model analysis.   

Benefits of Conducting Pricing Model Analysis

Some of the most common benefits of performing pricing model analysis are mentioned below:

  • Enables the comparison of the total cost of acquisition with competing bids.
  • It helps your business gain better control over the competition and achieve significant cost benefits.
  • Allows the comparison of past quotations for the same product or service to determine the viability of the current quotation.

Performing pricing model analysis is vital for companies to compare bids and eliminate contractual obligations. Request for more information to develop a pricing model template and gain accurate insights.

telecom industry

Identifying over $23 Million in Reduced Spend Opportunities for a US Telecom Company

“The SpendEdge team helped us gain quick insights into leading suppliers, spend management strategies, and negotiation strategies. Our team always wanted such accurate insights to manage the procurement process.”

Business Challenges Faced 

The client, one of the fastest-growing companies in the US telecom industry, doubled in size over a span of three years. This resulted in the dispersion of almost $500 million across the company. The expanded procurement structure lacked clear standardized policies and procedures, standard tools, and consistent responsibilities. With the continued growth, it became increasingly difficult for the client to manage the coinciding spend. Challenges facing the client included:  

  • Poor spend visibility with no specific pricing insights.
  • Inability to leverage spending power across different business units.
  • Difficulties in managing contract across the processes and payment patterns
  • Decreasing supplier satisfaction due to inefficient processes and payment patterns.
  • Inefficiency to gain the most value from purchases.
  • Delays in processing purchase orders and obtaining approvals.

(more…)

medical device industry

Helping a Canadian Medical Device Company to Achieve Cost Savings of $15 Million

Canadian Medical Device industry Overview 

Canada is one of the largest economies of the world and has a huge potential for companies in the medical device industry. The market is sophisticated and mature, with a strong demand for high-quality medical technologies. However, the medical device industry is facing predicaments due to fierce competition from US companies in the Canadian market. They lack the necessary market insights required to gauge new market opportunities and address problems associated with cost structures, pricing issues, regulatory requirements and suppliers.

Business Challenges Faced 

The client, one of the largest companies in the Canadian medical device industry manufacturing over 100 products was facing numerous challenges on different fronts such as market competition and procurement of products and services. This included purchase price fails, approval of new generation devices, and opportunity for sales of new devices. Therefore, they decided to collaborate with SpendEdge to determine appropriate supply markets and maximize cost savings without compromising on quality patient care. Also, they wanted detailed insights into the product attributes that had the strongest implication on the costs, to track down escalating cost factors and improve strategic sourcing decisions.

Inability to perform medical device industry analysis and gauge new market opportunities can impact the company’s share in the medical device industry market size. Request a free proposal and our experts will get back to you asap. 

Our Research Approach 

Leveraging their scales and depth of experience, the procurement experts at SpendEdge carried out a detailed medical device industry analysis and offered a customized supply market intelligence solution. This helped the client to gain real-time insights, right from evaluating and determining appropriate supply markets to conducting in-depth analysis and profiling suppliers. They obtained data on supply market capabilities, understood how the competition is developing – to bolster holistic external market awareness.

Furthermore, to address purchase price fails and meet compliance requirements for new generation devices, they identified regulatory requirements and sourcing best practices to comply with regulatory requirements. They also identified disparate labeling systems that the company needed to centralize to ensure compliance and address label inaccuracies. While working, our experts also collaborated with their procurement manager to help them understand the cost structure and analyze the financial health of suppliers in the medical device industry.

Want to know how our specific insights helped the client to address challenges and identify cost savings opportunities?

Get in touch with our experts now! 

Engagement Outcome

SpendEdge’s customized medical device industry helped the client to gain market insights and develop a robust sourcing and procurement strategy. This helped the client to identify the opportunity for sales of new devices despite the market competition. With real-time price tracking and accurate forecasting of raw materials, our solution enabled the client to achieve cost savings of $15 million.

Developing a robust sourcing and procurement strategy requires companies to obtain in-depth sourcing and procurement insights. Request a free demo to access our web-based procurement platform and gain detailed insights. 

Medical Device Industry Trends to Watch Out for in 2020

medical device industry

Analyzing the latest trends in the medical device industry is vital for companies to address the rising market competition. Request for more information to obtain medical device procurement insights.

market intelligence

SpendEdge’s Procurement Market Intelligence Services Helped an Insurance Company to Select One of the Top Locations for Contact Center Employment in Europe

Insurance Industry Overview 

Constrained growth in the European insurance market has compelled insurance providers to be flexible and agile in adapting their operating models. They need to outsource business processes to maximize their full market potential and minimize spend. Companies must recognize the potential of sourcing options along the overall insurance value chain. This case study is a classic example of how we helped one of the leading insurance companies to explore new contact center locations and understand potential labor market through our procurement market intelligence services.

Business Challenges Faced

The client one of the leading insurance companies was facing predicaments in lowering the costs of the claims call center. They were looking to outsource a combination of customer relations, fraud/disputes, and collections phone calls to two different domestic locations to keep up with customer demand. However, this required the client a thorough understanding of potential labor markets in Europe that could support the project of their size.  The client, therefore, decided to collaborate with SpendEdge to leverage their expertise in offering procurement market intelligence services. The primary objective of the insurance company was to understand the differences in cost between different geographies within Europe.

Key objectives the client aimed to achieve from the procurement market intelligence engagement were:

  • Explore new call center locations with a couple of key suppliers and identify and evaluate possible locations.
  • Better understand call center saturation and labor markets in each potential location.
  • Identify risks related to fraud and theft in each location.

(more…)

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