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Policy and Legal

Timmons Highlights Manufacturing Priorities in Mexico

NAM President and CEO Jay Timmons traveled to Mexico City this week to participate in U.S.–Mexico–Canada business delegation meetings at the North American Leaders’ Summit.

The background: The trilateral summit brought together U.S. President Joe Biden, Mexican President Andrés Manuel López Obrador and Canadian Prime Minister Justin Trudeau to advance North American solutions to current challenges facing the region.

  • The leaders’ meetings focused on issues including competitiveness, climate, immigration, development, the environment, health and diversity and inclusion.

The goal: The NAM was focused on conveying the critical importance of full implementation of the United States–Mexico–Canada Agreement to support North American competitiveness, investment and supply chain resiliency. Timmons emphasized the need for an investment climate that is grounded in core principles like transparency and the rule of law.

Strengthening alliances: During a conversation with Prime Minister Trudeau, Timmons praised Canada’s partnership in launching USMCA consultations on Mexico’s energy policies and urged continued cooperation.

  • “We firmly believe that the USMCA should be a model for how our three nations can capitalize on our close regional economic ties,” said Timmons during a meeting with the prime minister. “That means we have to make sure our governments are upholding their commitments under the agreement.”

Demanding accountability: In a meeting with U.S., Mexican and Canadian economic ministers, Timmons lauded free trade and pressed the nations to live up to the promises made under international agreements.

  • “The USMCA can only reach its full potential if we all respect the agreements that have been made to bind our countries together,” said Timmons.

Laying out challenges: During the meeting, Timmons urged our North American partners to address a series of issues that have caused concern for manufacturers in the United States. He cited a number of challenges related to Mexico that spurred a lengthy exchange with new Mexican Economy Minister Raquel Buenrostro. These issues included:

  • Mexican energy and power policies that have favored the interests of Mexican state-owned entities over U.S. companies;
  • Labeling requirements for food and nonalcoholic beverages;
  • Lack of competition in Mexico’s telecommunications market;
  • Measures that would require overly costly and complicated electronic waybills (the “Carta Porte” issue);
  • Mexico’s delayed approvals of biopharmaceuticals and other products; and
  • Mexico’s bans on the sale of certain goods including chemicals and genetically modified corn.

Timmons also highlighted a number of differences with Canada in recent years, including on the regulation of plastics, patent reviews and dairy market access.

The big picture: During the trip, Timmons underscored the importance of capitalism and free markets, both in North America and more broadly, according to POLITICO (subscription).

  • “The world is changing right now,” said Timmons. “We have democracies versus autocracies, we have freedom versus repression, we have capitalism versus a command economy. And I think our challenge is to really emphasize the power of free markets to lift everyone up and show how it creates opportunities and enhances the quality of life.”
Business Operations

How Digital Manufacturing Creates Business Opportunities

It’s time to think way outside the proverbial box, according to the Manufacturing Leadership Council, the NAM’s digital transformation arm. In fact, as we get closer to 2030, manufacturers are creating entirely new boxes—including new digital business models, products and services, revenue streams, ways to serve customers and opportunities to increase competitiveness.

Collaborative innovation: By 2030, metaverse technologies will provide rich virtual environments for the collaborative development of new ideas. These shared virtual spaces will enable contributors from multiple remote locations to collaborate in real time.

  • These collaborations may include manufacturers, partners, academic institutions and research institutes.
  • New concepts can be tested in a virtual world before moving to physical prototyping or production.

Outcome-based products and services: As digital platforms mature and products become increasingly smart and connected, the decade ahead may see a boom in more outcome-based services. This is where the customer doesn’t buy a physical product, but instead signs up to pay for the guaranteed outcomes that product or system delivers.

  • This shift will require manufacturers to establish new infrastructure rich in predictive analytics, remote communications and consumption monitoring.
  • It also requires a mindset change for traditional manufacturing, from a focus on units and costs to product lifecycles, performance levels and usage.

Blockchain networks: By 2030, blockchain could be leveraged for most world trade, helping to provide the secure traceability and provenance needed to prevent physical product counterfeiting, grey markets in medicines and even the adulteration of the global food supply chain.

  • A blockchain is an electronically distributed ledger accessible to multiple users. Blockchains record, process and verify every transaction, making them safe, trusted, permanent and transparent.
  • Blockchain technologies promise to be a viable solution to manufacturers’ need to automate, secure and accelerate the processing of key transactions across industrial ecosystems.

E-manufacturing marketplaces: Digitally empowered production-line adaptability, such as the kind that emerged during the pandemic, will provide a foundation for companies to offer spare production capacity to other companies in different sectors.

  • This maximizes the return on a company’s production-line investments and can generate new revenue streams for the future.
  • Combined with e-commerce, e-manufacturing will enable designers, engineers and/or smaller companies to more easily connect with a large pool of qualified producers to deliver and scale a final product.

Manufacturing in 2030 Project: New Boxes is just one of the industry trends and themes identified by the Manufacturing in 2030 Project, a future-focused initiative of the MLC. For more details on megatrends, industry trends and key themes for Manufacturing in 2030, download the MLC’s new white paper “The Next Phase of Digital Evolution.”

Workforce

What Foundations and Corporate Donors Are Looking For

Many manufacturers pour their time and money into bolstering local programs for young people, hoping to shape the next generation of manufacturing workers. But how do they determine which organizations to work with, and how should those organizations attract their attention?

At the Manufacturing Institute’s inaugural Workforce Summit, held in Cincinnati back in October, panelists from WestRock Company and Arconic Foundation shared tips for those seeking to build partnerships with potential donors.

Top of mind: Education and workforce development, environment sustainability and social equity are all funding priorities, according to the panelists. Foundations and corporate donors are interested in programs that benefit local communities and reflect their organizations’ values.

  • Mandy Burnette, director of corporate giving at WestRock, emphasized that the company looks for organizations that are capable of building a long-term relationship. As she put it, “We don’t give. We don’t donate. We invest in strategic partners.”

The perfect partner: Burnette and Arconic Foundation President and Treasurer Ryan Kish discussed what they look for when making funding decisions.

  • A track record of success. Can the program be replicated successfully elsewhere? If so, that’s a huge plus, according to Kish. “A great example of this is FAME,” he added, referring to the workforce development program founded by Toyota and now operated by the MI. “You don’t need to convince me that FAME works. … If I have an opportunity to replicate FAME in one of our communities, I’m going to jump on that.”
  • Impact: Kish said that he was drawn to the MI’s 35 x 30 campaign because he recognized that it was impactful. “It not only aligns with our funding priorities, but it’s going to affect a huge number of women and increase [the number of] women in the workplace. That’s what we’re after.”

Taking that first step: Both Burnette and Kish agreed that organizations should talk to their local connections, who will be able to steer them to the right decision-maker in a company or foundation.

  • “If you’re reaching out, have a tight story,” Kish said. “Have your project activities, your budget, your timeline and impact story well-defined when you come to a local contact so that it grabs their attention and gets them engaged with you.”

Think long term: Beyond just focusing on attracting talent for jobs of today, foundations and companies are looking increasingly to support initiatives that build talent pipelines for the future.

  • “All we’re doing right now [as an industry] is fighting over the same scarce talent,” Kish said. “Take the opportunity to make an investment in early STEM education to build the pipeline, so you’re not dealing with the same problem in 5 and 10 years.”

 The last word: The best way to start thinking through partnerships? “Know your end result and then back into it. That’s what we did with our strategy. We knew what we were trying to accomplish and achieve, and then we backed into it and thought about the partners that could help us get to the results that we wanted,” Burnette said.

Business Operations

Top Manufacturing Tech Trends of 2022

Now that 2023 is here, we’re looking back on 2022’s top tech trends in manufacturing. The NAM’s digital transformation arm, the Manufacturing Leadership Council, and its innovation management division, the Innovation Research Interchange, gave us an overview.

AI everywhere: From automatically responding to shifts in production demand to anticipating breakdowns in the supply chain, artificial intelligence showed up more than ever before throughout manufacturing operations.

  • More than two-thirds of manufacturers are either using AI now or will be doing so within two years, according to MLC research.
  • Current use cases include predicting needed maintenance for equipment, forecasting product demand and monitoring performance metrics such as productivity and efficiency. Future use cases could include fully autonomous factories that run continuously with minimal human intervention.

Training on demand: Training for technicians and frontline operators used to mean time in a classroom with a live instructor. In 2022, more manufacturers turned to virtual, on-demand learning tools that allowed workers the freedom to learn at their own pace.

  • This ran the gamut from video content libraries to immersive augmented reality/virtual reality experiences that guide and correct trainees.
  • In 2023 and beyond, this type of learning experience will be essential to attracting and retaining younger workers who are familiar with digital learning and want the latitude to gain new skills on their own schedules.

Digital twins: Manufacturers used digital twins—virtual models designed to reflect a physical object, system or process accurately—to create design prototypes and test their performance.

  • Digital twins will continue to allow for new levels of design optimization, improved product development and performance and significant waste reduction for manufacturers.

Robotic collaboration: Once confined to steel cages and bolted to floors, industrial robots took center stage in 2022.

  • No longer limited to repetitive tasks and kept far from human workers, new-generation robots are safe enough to work alongside employees, can be moved quickly around shop floors and are programmed easily to do multiple tasks.
  • Since they’ve also become more affordable, they’re an economically feasible investment for companies of all sizes.

Cybersecurity as safety: A rise in connected factories also meant a rise in cyberattacks on manufacturers. In an industrial setting, a cyberattack can be very dangerous, as it can cause equipment to malfunction.

  • Last year, more companies began addressing the threat with cyber drills, tabletop exercises for simulated attacks and other training exercises designed to keep businesses—and workers—safe and secure.

Low-code/no-code development platforms: In 2022, more manufacturers embraced the use of mobile and web apps to build applications quickly. Using these platforms, enterprise and citizen developers can drag and drop application components and connect them to create apps—without line-by-line code writing.

  • Business teams with no software development experience built and tested applications without any knowledge of programming languages, machine code or the development work behind a platform’s configurable components. We can expect to see more of it this year.

Smart glasses move beyond the pandemic: Many manufacturers kept up their pandemic-era use of smart glasses, which they had used to troubleshoot issues on the ground when travel was restricted and engineers and technicians couldn’t reach sites.

  • They also expanded smart glasses’ use to include scanning sensor data so users can see visual data “mapped” onto equipment to better identify issues and fixes.

Interested in learning more? Check out the MLC and IRI for more insights into manufacturing’s exciting, high-tech future.

Business Operations

Sustainability Is a Top Manufacturer Priority, Survey Shows

Manufacturers are pursuing sustainability like never before.

That’s according to recent polling conducted by the Manufacturing Leadership Council, the NAM’s digital transformation division. The annual Sustainability and the Circular Economy research survey seeks to determine the progress made in sustainable manufacturing.

Competitiveness: There has been a surge in the number of manufacturing executives who view sustainability as critical to the future of their businesses.

  • 58% of respondents in 2022 believe sustainability is essential to future competitiveness compared to 38% in 2021.
  • 68% of executives say they are implementing extensive, corporate-wide sustainability strategies. That’s up from just 39% in 2019.

What’s driving change: The motivations go beyond regulatory compliance and cost savings.

  • 78% say sustainability is about better alignment with corporate values.
  • 68% believe in creating a cleaner, healthier environment.
  • 66% seek to improve company reputation with customers and investors.

Top corporate goals: More than half of survey respondents reported having specific sustainability goals and metrics across almost all key functions in the company.

  • Goals were most apparent in manufacturing and production (79%), supply chain (69%) and product design and development (67%).
  • Additional goals were cited in transportation and logistics (56%) and partner compliance (51%).

Energy efficiency is No. 1: The primary sustainability focus of manufacturers, according to survey results, is energy efficiency and reduction, combined with the transition to renewable energy sources. These efforts are linked intrinsically to meeting net-zero emissions goals.

  • 45% of respondents report having announced formal net-zero goals.
  • 30% aim to hit net zero by 2030.

Digital tech, employee training play a role: Also on the rise is the number of companies that recognize the importance of digital solutions in their sustainability efforts.

  • These tools are being used to manage and monitor materials and energy consumption, optimize operations to improve efficiency and report sustainability progress.
  • Respondents also say meeting sustainability targets must include engaging employees through education and training, as well as greening their supply chain.

The last word: An overwhelming 90% of all respondents agree that manufacturing has a special responsibility to society to become more sustainable and accelerate the transition to a future circular industrial economy.

Interested in putting some renewable energy solutions into action, including solar power, battery storage and LED lighting? Programs from utility companies and other entities enable efficiency upgrades with little or no upfront capital. Connect with NAM Energy to explore your options!

Workforce

Manufacturers Should Hire Neurodiverse Workers—Here’s Why and How

Creators are always wanted in manufacturing, and those who bring new perspectives due to their neurological differences can be some of the most valuable.

That was one key takeaway from the Diversity + Inclusion Summit held this month by the Manufacturing Institute (the NAM’s workforce development and education partner). Dr. Keivan Stassun, director of the Frist Center for Autism and Innovation at Vanderbilt University, discussed the benefits of hiring neurodiverse workers, sharing tips on optimizing the hiring process for these workers as well as setting them up for success. Here’s some of his advice.

Why it matters: As manufacturers look for more workers to fill their hundreds of thousands of open positions, they are considering people of many different backgrounds and talents.

  • Neurodiverse workers, who may include those with autism, Down syndrome, ADHD or other neurological conditions, have a wide range of abilities and perspectives and can enrich manufacturers’ operations.
  • Stassun spoke from personal experience: at the Frist Center research lab, autistic individuals working with the proper support created a data visualization software that has been licensed by NASA, and also patented a technology for mining asteroids.

The benefits: “There are two broad categories of strengths that neurodiverse talent brings to the table—visual cognitive abilities and process/efficiency improvement,” said Stassun.

  • Visual cognitive abilities can include skills such as pattern recognition and outlier detection, which can be useful in quality assurance tasks as varied as inspecting batteries coming off an assembly line, surveilling financial records for fraudulent or improper activity or stocking crash carts in emergency rooms.
  • Process/efficiency improvement abilities emerge from neurodiverse workers’ atypical or novel perspectives, which help them identify out-of-the-box solutions. As Stassun explained, “Neurodiverse individuals can look at a process and abstract it into a flow chart to find ways to increase efficiencies that no one else would have even thought of.”

How to get started: Stassun recommends that companies try a small pilot program before rolling out a company-wide hiring initiative. He had a few key tips for the recruitment process:

  • During the job interview stage, recruiters should be aware of ways in which neurodiversity can differ from neurotypical behavior. For example, interviewees may make minimal eye contact and use extremely direct verbal communication.
  • To set neurodiverse workers up for success, companies should examine the sensory environment of their workplaces. Though workers’ needs will vary, they may be sensitive to light, temperature or noise and need certain accommodations, which should be arranged from the outset of employment.

Resources: Stassun offered two resources that will help companies find and retain neurodiverse talent:

  • Mentra, a neurodiversity employment network that recruiters can search, and which allows neurodiverse individuals to share their backgrounds and strengths with employers.
  • The Autism @ Work Playbook, which details how to create a supportive work environment for autistic individuals.

In addition, the MI provided other useful information in its recent D&I Roundtable on recruiting and retaining employees with neuro differences, which you can view here.

The last word: As Stassun noted, “Innovation often comes from the edges. From a human capital perspective, it’s a really exciting opportunity.”

Business Operations

How a Manufacturer Uses R&D to Keep Old Jets Flying

What does the U.S. military do when an expensive asset like a plane or a weapons system begins to break down?

Often, it turns to companies like Parts Life, Inc.—an innovative manufacturer that can reverse-engineer obsolete parts and help find solutions for hard-to-replicate products. But after a tax law change went into effect in 2022, the New Jersey–based manufacturer is facing increased costs for research and development, creating a barrier to the kind of innovation that is the focus of its business.

The change: Until the beginning of 2022, businesses could deduct 100% of their R&D expenses in the same year they incurred the expenses. Starting this year, however, a tax law change requires businesses to spread their deductions out over a period of five years, making it more expensive to invest in growth and innovation.

A focus on innovation: For Parts Life, coming up with new ideas is an essential, daily activity.

  • “Parts Life is built around being a solutions provider,” said Parts Life President and CEO Sam Thevanayagam. “We are providing solutions for very expensive and mission-critical assets that are extremely strategic for the defense of the nation, but are also older—so their parts are not necessarily being supported.”
  • “That’s where we come in to do reverse engineering. So, we’re looking at an old problem, but using innovation to solve it going forward.”

A benefit for savings: By helping the military extend the life of its assets, Parts Life also helps taxpayers.

  • “We’re taking care of the warfighter and the taxpayer,” as Thevanayagam puts it.

A look ahead: As global conflicts shift, the U.S. military needs suppliers like Parts Life to help it develop solutions for future challenges, too.

  • “Right now, our military is coming out of conflicts in Afghanistan and Iraq, but future conflicts may involve different terrain with different problem sets,” said Thevanayagam.
  • “The work that we are doing today is helping them figure out how to approach those challenges. We’re having them tell us where they need to be, and then we’re helping them with the innovation they need to be successful.”

A tough choice: With the change in tax law, companies like Parts Life will be forced to make difficult decisions about how to spend scarcer resources, harming their ability to do critical, forward-looking work.

  • “Currently, we’re leaning forward in resources and talent to lead the future,” said Thevanayagam. “If the government is going to pull the rug out from under us, we’re not going to be able to be aggressive. We’ll have to focus on maintaining our business rather than investing in new innovation.”

Our take: The NAM has pushed forcefully for the tax change to be reversed—and in October, told policymakers that the R&D amortization provision poses a “serious threat to our national security,” in part because of its impact on manufacturers like Parts Life that supply and support the U.S. military.

The bottom line: “The only way for us to continue to be relevant is to make sure that we’re investing in innovation and seeing what we can do to be a part of designing the future,” said Thevanayagam.

Visit the NAM’s R&D Action Center for critical R&D policy updates, industry stories and an opportunity to engage directly with your members of Congress. 

Business Operations

Sargento Makes a 10-Year-Old Boy’s Wish Come True

On Dec. 21, 2021, the Ball family from Winston-Salem, North Carolina, received devastating news: their son Maxx had Ewing sarcoma, a rare form of bone cancer that typically occurs in children and young adults.

Maxx’s wish: As he battled the potentially life-threatening disease, 10-year-old Maxx, whose cancer is now in remission, had one wish: to travel to Wisconsin to learn about the cheese-making process.

  • “Most kids choose Disney World or a trip to Hawaii, but not my son,” said his mom Lauren. “He loves cheese and all things dairy, so he wanted to come to Wisconsin.”
Sargento Master Cheese Maker Jeff LeBeau describes the cheese-making process to Maxx, who grabbed a sample to test the pH levels. (Photo credit: Sargento Foods)

From wish to reality: The Make-A-Wish Foundation contacted Plymouth, Wisconsin–based Sargento—a leading manufacturer of shredded, sliced and snack natural cheese products—which was thrilled to grant Maxx’s wish.

Sargento has been a longtime supporter of the Make-A-Wish Foundation, partnering with other local businesses on an annual golf-related fundraiser that provides substantial support for Make-A-Wish Wisconsin. Sargento’s Executive Vice President of Operations and third-generation family owner, Mike McEvoy, has also served on the board of Make-A-Wish Wisconsin.

The itinerary: After arriving in Madison the Friday before Thanksgiving, Maxx and his family visited the Center for Dairy Research at the University of Wisconsin–Madison. He also met Wisconsin Gov. Tony Evers, visited

Sargento General Manager Brian Baker provides Maxx the finished product as his mom and sister look on. (Photo credit: Sargento Foods)

the Wisconsin State Capitol building, checked out the House on the Rock and then traveled to Green Bay to tour Lambeau Field. But the final day of his Dairyland tour was a stop at Sargento’s new location: Baker Cheese in St. Cloud, Wisconsin.

The visit: Sargento General Manager Brian Baker and Master Cheese Maker Jeff LeBeau provided a tour of the facility and explained the cheese-making process in detail. Maxx helped with making cheese curds, learned the documentation process and even operated one of the facility’s computer systems.

  • “On our tour, he kept saying, ‘This is awesome,’” said Baker. ‘It really put Thanksgiving into perspective. They are a wonderful family, and what he’s gone through, to be here and to be so engaged and on the other side of his diagnosis, shows what’s really important.’”

The last word: “It was a great day, and it was a pleasure to help make Maxx’s wish come true,” said Sargento Vice President of Human Resources and Community Relations Karen Lepisto.

Workforce

Manufacturers Offer More Flexibility, Child Care to Workers

How can companies provide workers with the flexibility and support they seek? This question has become increasingly pressing for manufacturers as they compete in a tight labor market, and many have come up with their own innovative answers.

Recently, the Manufacturing Institute—the workforce development and education partner of the NAM—hosted a panel with leaders from Toyota, Cornerstone Building Brands, Pioneer Service Inc. and 3M about the child care benefits they offer and how they are reconceiving flexibility.

Child care: The companies provide a variety of different services to their team members, according to the speakers, to account for varying needs.

  • Toyota offers a comprehensive suite of services that includes onsite child care at select locations, emergency backup care, tutoring and counseling services.

Flexible options: Though these manufacturers run complex operations, they are increasingly empowering workers to shape their own days. For example:

  • At Cornerstone, office workers come into the office one day a week on the same day. Hourly workers are also offered flexibility—they can take part-time shifts in nonstandard times.
  • 3M’s “Work Your Way” program is a trust-based system that allows nonproduction employees to designate the way they want to work, whether that’s in person, remote or hybrid. 3M is considering expanding the program to individuals working in laboratories and on the production floor.
  • Pioneer emphasizes cross-training to increase flexibility for all their workers. By training more employees on critical skills, employees can take time off or work more flexible schedules because they now have coverage.

Where to start: For other manufacturers looking to provide similar options to their own workers, the panelists had some practical advice.

  • When setting up a child care program, Toyota Vice President of Corporate Shared Services Denita Wilhoit says, “You need to consider three points. Find a good partner who knows the area. Investigate what resources may be available in the state where you’re implementing the program. Be aware of the risks.”
  • “Outsourcing your needs is an important avenue. Creating a resource center is key. Listen and talk to your employees, and engage them through employee resource groups,” said Denise Rutherford, former chief corporate affairs officer and senior vice president at 3M (retired).

The big picture: Implementing programs and services like these will have huge payoffs, not only for individual workers and companies but also for the industry as a whole.

  • In a recent study released by the MI, women cited the lack of flexibility (63.1%) and the lack of child care support (49.2%) as their top challenges, according to company leaders.
  • Meanwhile, women currently make up only 29% of the manufacturing workforce. If the industry increased that share to 35%, manufacturers could fill the 746,000 job vacancies open today, according to the study.

The last word: Conversations around child care and flexibility signal seismic shifts in the way manufacturers develop and support their workforce. As Rutherford noted, “There is a transformation afoot.”

Business Operations

Acutec Gives Workers a Stake in the Company

When asked why she chose to “give away” a quarter of her precision-machining company to employees, Acutec Precision Aerospace President and CEO Elisabeth Smith has a simple, commonsense answer: “Having an appetite for growth is a lot easier if you’re the beneficiary of it.”

Skin in the game: In August, Acutec, the largest industrial employer in its northwestern Pennsylvania county, went from privately held to worker-owned through an employee stock ownership plan. The shares, which have a value of $5.5 million, will be given out to current and future employees over the next decade—at no cost to them.

  • Said the 40-year-old Smith: “I have a long career ahead of me, but I want the employees to be on that journey with me. … Why not give a stake to the person who’s working their butt off?”

Bringing in applicants: The woman-owned business, founded in 1988 by Smith’s father, Rob Smith, has always had an “empowered, participatory” workforce, but in recent years, it struggled with attracting and retaining the right people, Smith said. Since the ESOP, that’s turned around.

  • “It’s made a difference in attracting talent,” she said.
  • With more than 400 employees spread across its three Pennsylvania facilities and one South Carolina operation, Acutec is in growth mode and still looking to fill open positions.

The retirement incentive: The firm’s new ownership structure will help provide for employees in their golden years.

  • Under the ESOP, when an employee leaves or retires, the company buys them out, and they can place that money into a retirement account.
  • “There have been other ESOPs in the community, and some people have seen employees [of other companies] retire with quite a lot of money, so they have an idea of what it looks like,” Smith said.

The productivity effect: Now that employees are part owners of Acutec, Smith sees more interest in cost-consciousness and ROI.

  • “We’re hearing things like, ‘Can we save on tooling?’” Smith said. “There are some costs the employees control themselves. The idea now is that they are custodians in charge of some of those profit drivers. They want to look at return on investment.”

The last word: Perhaps the best development to come from the restructuring is the change in team morale.

  • “Before, people were kind of burned out, coming out of the pandemic,” Smith said. “How do you inspire people to do more? This is how.”
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