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by Asia Perspective Asia Perspective No Comments

ODM Furniture Supplier Search in Vietnam for a Nordic e-Retailer

ODM Furniture Supplier Search in Vietnam for a Nordic e-Retailer

The client, one of the largest e-retailers of furniture and interior design in the Nordic, has been doing most of their sourcing in China for decades. However, based on the global supply chain situation, the client believed that it’s a must to diversify their sources as well as product assortments to avoid disruptions and increase their competitiveness. Vietnam is the top-of-mind location for the client as they had some experiences working with Vietnamese suppliers before and were satisfied with the outcome. Moreover, the continuously improved production capabilities and the recently ratified free trade agreement between EU and Vietnam have made the country extremely appealing to the client.

With that target being set, the client came to ARC Consulting to ask for help in expanding their sourcing activities to Vietnam. The project aimed to identify the most suitable ODM outdoor furniture manufacturers for the client and facilitate business processes between them and selected suppliers.

Interior of a modern home

Approach

First, the client revealed types and target prices of products that they would like to source in Vietnam. Consultant team of ARC Consulting performed a supplier search on the Vietnam market accordingly.

Several suppliers were contacted and investigated to evaluate their suitability. Our consultants then visited shortlisted suppliers to further evaluate their production capabilities and product assortment. Suppliers’ product portfolios and quotations were also collected and brought into discussion with the client to make sure that the selected suppliers matched their expectations. Along the way, ARC Consulting team also looked out for potential assortments to recommend to the client.

Based on collected information and data, shortlisted suppliers were assessed and benchmarked against each other to identify the most suitable suppliers for the client to work with.

After the client decided to work with recommended suppliers, ARC Consulting helped them to proceed with other steps toward the official order placement including sample order placement, sample testing, and contract negotiation. ARC Consulting also made sure that the European standards for furniture as well as the client’s standards (style, color, packaging, etc.) were strictly followed during sample production.

Finally, based on expected order quantities and previously discussed quotations, ARC Consulting helped the client to negotiate contract terms and prices to reach their target before placing the official orders.

Results

Throughout the project, over 100 suppliers were screened, 50 suppliers were contacted and evaluated, 9 suppliers were selected for site visit and in-depth evaluation, and finally 4 suppliers were shortlisted and recommended to the client.

ARC Consulting provided the client with a comprehensive report of suppliers, so they have a better understanding of leading manufacturers as well as an overview of the industry landscape in Vietnam.

100% of the samples passed the product test performed by an authorized lab before the official order is placed.

ARC Consulting successfully facilitated the contract signing and official order placement between the client and four Vietnamese suppliers.

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    by Asia Perspective Asia Perspective No Comments

    Virtual Sourcing Office: Recruitment of Sourcing Specialists

    Virtual Sourcing Office: Recruitment of Sourcing Specialists

    The client, a Shanghai-based joint sourcing office of two low-cost retailers in Finland and Norway offering a broad range of product segments, engaged ARC Consulting in a Strategic Review of the Purchasing Alliance of the client.

    Following the results of our review, the client reached out to ARC Consulting for a deeper analysis of their Asian sourcing operations and to get an overview trend analysis of how European sourcing offices in China differentiates risks by relocating sourcing outside of China. ARC Consulting was also tasked with the setup of a virtual sourcing office in Vietnam. The aim of the project was to help the client manage and enable further sourcing growth in Vietnam through onsite operation of a virtual sourcing office.

    The first step of the project is the recruitment of sourcing specialists. ARC Consulting was tasked with managing the full recruitment process to hire a Sourcing Manager that is to be stationed in ARC Consulting’s office in Ho Chi Minh City. The recruitment process covers every step from initial CV screening, interview organizing, to signing and onboarding candidate. Post-recruitment, ARC Consulting continually helps with the operation of the virtual sourcing office, providing supports in operation, HR, and administration.

    Recruitment interview

    Opportunity

    As of today, the client has experience with Chinese suppliers, but felt the need to strengthen their sourcing base in the Southeast Asian region. Following the results of our operations analysis of the client, Vietnam is deemed the most suitable place to hold a virtual sourcing office. The sourcing office in Vietnam will be trialed with the sourcing of furniture and other related homeware products, something that Vietnam has long established a strong global market standing. Consequentially, there is a large pool of sourcing specialists in the field.

    The challenge was for ARC Consulting to identify candidates that could meet the various requirements of the client. The right candidate needs not only the extensive experience in sourcing our client’s targeted products, but they must also have the experience serving European clients. Further, they need to portray the right characters to fit in our client’s diverse working culture.

    Approach

    The recruitment of sourcing specialist included:

    • Candidate search and screening,
    • Three rounds of interview between the most potential candidates and the team of ARC Consulting (first interview), the sourcing office of the client in Shanghai (second interview), the representatives of the client in Finland and Norway (third interview).
    • Reference check, offering and signing contract with the selected candidate,
    • Provision of ongoing support for the virtual sourcing office including HR, administration, payroll management, and operational support.

    Results

    From over 100 potential candidates for the Sourcing Manager position, ARC Consulting selected 6 most potential candidates that fit the client’s criteria to present to our client. Following the client’s interview and selection process, ARC Consulting conducted reference check with the selected candidate’s previous direct managers, provided offering and signing of employment contract, as well as on-going HR & Administration support for the new Sourcing Manager.

    Following the onboarding of the sourcing team, ARC Consulting continually provide operational and administrative support for the client’s virtual sourcing office.

    See more about our sourcing & supply chain management and our retail expertise.

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      by Asia Perspective Asia Perspective No Comments

      Vietnam Supplier Identification & Evaluation

      Vietnam Supplier Identification & Evaluation

      The client, a big online reseller in Sweden focusing on office-related products, has been sourcing their products from China. Now they want to diversify their supply base to other countries to secure the supply chain. Vietnam showed up as a promising market thanks to the newly ratified EU-Vietnam Free Trade Agreement, which allow them to enjoy a duty-free advantage when exporting products to the EU.

      With that being discussed, the client asked ARC Consulting to conduct a Vietnamese supplier search of three different product categories. One of the categories is laptop bags and backpacks.

      Laptop bag

      Opportunity

      The client has been dependent on the China market. However, due to the disruptions in the supply chain in China in recent years, the company would like to explore the potential in other markets. Among fast-growing markets, Vietnam appears the most interesting one to the client thanks to its favorable Free Trade Agreement with the EU, comparatively low labor cost, and growing production capacity. Having said that, ARC Consulting’s support came in handy, allowing the client to take advantage of our long-standing experience in Asian markets.

      Approach

      First, the client and ARC Consulting mapped out and reviewed the requirements for potential suppliers. Accordingly, Asi​a Perspective team performed a supplier screening assessment on the Vietnam market, short-listening the suppliers that match the set criteria through multiple rounds.

      Second, ARC Consulting gathered company profiles, product catalogs, and quotations from suppliers. To deepen the analysis, the consultant team carried out extensive research and visit on-site the suppliers to verify the production capability.

      Third, as requested by the client, ARC Consulting supported and set face-to-face meetings between the client with the prospects to further discuss technical aspects and cooperation opportunities.

      ARC Consulting will help to proceed with further steps including final supplier selection, sample order placement, sample testing, and contract negotiation.

      Results

      Over 100 suppliers were contacted by ARC Consulting team. After screening and factory visiting, 06 suppliers were selected to have face-to-face meetings with the client.

      A comprehensive report on suppliers’ profiles and production capability was presented to the client to help them have an overview of Vietnam suppliers.

      The project is ongoing as ARC Consulting is supporting the client to proceed with selected suppliers.

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        by Asia Perspective Asia Perspective No Comments

        China Supply Chain Assessment for a Swedish Phone Accessory Company

        China Supply Chain Assessment for a Swedish Phone Accessory Company

        The client, a leading Swedish phone accessory company, has been growing fast in past years and they expected a significant growth in the coming years. As a result, a need to strengthen their supply chain management was necessary.

        With the goal being set, the client turned to ARC Consulting to provide professional service for their Chinese supplier base assessment, to identify supply chain risks and saving opportunities, as well as improve the overall supplier management process.

        ARC Consulting arranged in-depth on-site supplier audits at the client’s current suppliers, and conducted a detailed market study for relevant products. A comprehensive analysis was presented to the client, including product cost breakdown, price benchmarking, potential risk identification and mitigation.

        Selection of mobile phone covers

        Approach

        The project consisted of three steps:

        • Data gathering & market research
        • Data analysis & price benchmark
        • Supplier negotiation & contract signing

        First, ARC Consulting collected spend data from both the client and the suppliers, visited existing suppliers, as well as conducted a thorough market research to understand the available supplier alternatives for each product on the market.

        Second, ARC Consulting conducted cost analysis of each of the products supplied by current supplier, as well as invited potential suppliers for quotation after gaining deep understanding of their operations and capabilities. A comprehensive price comparison was presented thereafter.

        Finally, a proposed negotiation plan was prepared for the client’s review and approval. ARC Consulting participated in negotiations with the client and prepared a formal contract to be signed by both parties.

        Results

        A formal purchase contract was signed after the commercial negotiations. Cost saving would be generated from some areas and products, that benefitted the client overall.

        With ARC Consulting’s assistance, the client has improved their daily purchase order management, supplier selection & management process, and contract management. They have received the relevant professional tools to continually improve their supply chain in China.

        A list of high potential and competitive suppliers were selected and recommended to the client. Thanks to the enhanced knowledge of the process and available suppliers, more saving opportunities can be explored.

        See more about our sourcing & supply chain services and our consumer products expertise.

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          by Asia Perspective Asia Perspective No Comments

          Recruiting a New Asia General Manager for One of Sweden’s Biggest Retailers

          Recruiting a New Asia General Manager for One of Sweden’s Biggest Retailers

          The client, one of Sweden’s leading companies in the low-price market segment, has been conducting sourcing activities in Asia for several years. The company now reached out to ARC Consulting to secure a new General Manager to lead their Asian operations.

          An executive candidate search and screening was conducted together with the client and a shortlist of 8 executives with exceedingly relevant experience was provided to the client.

          Man shopping in a department store

          Opportunity

          The new General Manager would take full responsibility for all sourcing activities in Asia while maintaining strong working relationship with Swedish HQ and colleagues in the Nordic. The GM is responsible for the company’s Asian operations, as well as ensuring that the supply base meet the clients long term expectations.

          Approach

          To ensure that we identified all potential candidates who would have the competencies to fulfill this high-level role, we screened the global-leading retail organizations that have sourcing operations in Asia, as well as other Nordic organisations which have a sourcing presence in Asia.

          To acquire the desired multinational, multi-layered professional, we became even more entrenched in our client’s internal work processes to understand the anticipated opportunities that could arise from such a challenging role. Thanks to this, we could communicate effectively with targeted candidates. Our outreach was not only to Office Leaders, Chief Operating Officers, Business Leaders, and traditional General Managers, but also to Chief Executive Officers, Country Managers of Asia or other emerging markets, Senior Vice Presidents of Business Development, and more to broaden the pool as much as possible.

          Recruitment process

          Results

          The successful candidate spent the last decade working at top management positions located in Asia. The candidates experience in sourcing, business development, procurement and operations indicate that the person has the work experience and knowledge required to drive and advance this business into the future challenges.

          See more about our sourcing consulting services and our experience in the retail sector.

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            by Asia Perspective Asia Perspective No Comments

            Partner Identification & Strategic Supply Chain Analysis for Global Fashion Brand

            Partner Identification & Strategic Supply Chain Analysis for Global Fashion Brand

            The client, a global fashion brand based in the Nordics, had been present on the Chinese market during the last decade. However, their Asian operations had been run by a third-party, handling both the physical and online stores, as well as the distribution.

            Now, the client set out to enter the Chinese market by themselves and turned to ARC Consulting for help with identifying the best suitable Chinese distribution partner and developing a supply chain strategy. The aim of the project was to identify the best partner based on variables such as strategic geographic location, fashion experience, distribution capabilities and costs. Additionally, the study also included a comprehensive overview of the Chinese logistical landscape, a benchmark study of industry peers and a supply chain setup- analysis.

            Jeans hanging in a clothing store display

            Opportunity

            By entering the Chinese market by themselves, the client not only re-gain full control distribution and sales in China, but also get full control of marketing, branding and expansion planning, which before were being handled by the partner. Further, the client also gets full access to all distribution and sales data, enabling a deeper level of internal data analysis, which previously has been fully outsourced.

            Approach

            ARC Consulting initiated the process with an internal as-is-analysis, gathering production, logistics and shipping data to understand the challenges and requirements of the client. Based on the information and the client’s needs, ARC Consulting conducted a partner evaluation and identification of the best suitable candidates. The partner evaluation consisted of multiple steps, including several quotation rounds, cost analysis and detailed business model alignment reviews together with our client.

            In parallel, ARC Consulting conducted a strategic review of the Chinese logistical landscape, as well as a benchmark study of five industry peers and their logistical setup in China, identifying their warehousing network, omni-channel capabilities and logistical partners.

            Results

            ARC Consulting provided the client with a comprehensive report, presenting a short list of the best suited distribution partner alternatives, as well as giving the client a thorough overview of the Chinese logistical landscape with valuable insights. The report also laid out the supply chain setup required to offer the highly digital Chinese consumer a great customer experience throughout all channels.

            The study also illustrated how industry peers are conducting their logistical operations in China, identifying how our client could exceed their competitors’ offerings on the Chinese fashion market.

            See more about our market entry & expansion and our experience in the retail sector.

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              by Asia Perspective Asia Perspective No Comments

              Strategic Analysis of China’s Plant-based Meat Market

              Strategic Analysis of China’s Plant-based Meat Market

              The client, a Nordic food producer, was looking into the emerging global food trend of plant-based meat. The client was eager to understand more about the market potential in China, which has the largest customer base in the world. Therefore, the client decided to reach out to ARC Consulting for support in the matter.

              The project consisted of three separate parts. Firstly, a Chinese market overview analysis, conducted with an end customer focus. Secondly, a distribution partner identification, and finally, a business modelling setup and funding alternatives mapping.

              Moreover, the project comprised an overview of Chinas import regulations, including both customs procedures with required steps and document mapping as well as labelling requirements and trademark registrations.

              The objective was to help the client gain extensive knowledge of the potential opportunities existing in China, as well as giving them all the right tools to utilize on these opportunities as efficient as possible.

              Soy burger on a grill

              Opportunity

              As of today, China is the world’s largest consumer of meat, and as the living standard constantly increases in the country, so does the meat-consumption. However, China has a long history of imitating meat with vegetables and other plant-based ingredients. Consumers are familiar with many kinds of vegetarian dishes which taste and look like meat or other animal products.

              Further, the Chinese government aims to reduce meat consumption by 2030 to cut carbon emissions and combat obesity. At the same time, younger generations of China are becoming more aware of other issues caused by meat-consumption, such as animal rights abuse and health factors, which contributes to the increasing vegan movement in China.

              Altogether, there are many factors laying the foundation for great business opportunities in China, which the client was eager to explore and learn more about.

              Approach

              ARC Consulting initiated the project by conducting a market overview analysis, including several niches of plant-based products.

              The necessary data set was collectively gathered by a combination of following methods:

              1. Desktop research, using various industry research websites and corresponding databases, governmental websites and secondary industry reports
              2. Expert interviews with Chinese industry professionals and client’s internal employees

              Gathered data were analyzed and summarized in the report, covering following parts:

              1. Overview of China’s plant-based meat market, and forecast on future growth to identify opportunities and challenges
              2. Current trends and newly implemented actions from local main players in plant-based market segments
              3. Value chain mapping of the target market
              4. A go-to-market approach

              Results

              ARC Consulting concluded that the plant-based meat market in China has huge market potential, offering highly interesting opportunities and possibilites for our client. As of today, there are a few local players controlling the market, creating high barriers-of-entry. However, ARC Consulting provided two alternative market-entry approaches to overcome these barriers, including potential funding partners and financing opportunities.

              Lastly, the study also illustrated possible distribution partners being big retail chains, individual supermarkets, e-commerce platforms, chain restaurant or even smaller cafés.

              See more about our market expansion consulting services and our experience in the consumer products sector.

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                by Asia Perspective Asia Perspective No Comments

                Strategic Review of Purchasing Alliance for three of the largest retailers in the Nordic region

                Strategic Review of Purchasing Alliance for three of the largest retailers in the Nordic region

                The clients, three leading discount retailers in the Nordics decided to conduct an assessment of their current joint sourcing operations, and more importantly an assessment on what the desired state of joint sourcing operations would be in the future.

                The aim of the project was to gain a strategic understanding on what the sourcing alliance should look like, what it should focus on, and what actions are needed in order to remain competitive and to improve further.

                The study involved a comprehensive spend analysis, an internal as-is-analysis, both individually and jointly, as well as a comprehensive benchmarking study of industry peers. The study identified several opportunities for improvement for all parties involved as well as necessary steps and requirements going forward.

                Cargo containers at a Norwegian port

                Opportunity

                There is already an established joint sourcing office between two of the three parties.

                By combining all three parties’ volumes in the areas of large volumes and similar products, huge cost savings are to be found.

                The clients are all aiming to be at the forefront of the industry and by having ARC Consulting conducting a benchmark study and identifying all the industry trends as well as areas of improvements the alliance would distinguish which areas should be prioritized moving forward.

                Approach

                ARC Consulting initiated the process with an internal as-is-analysis, both individually and jointly for all three parties.

                During the as-is-analysis, spend analysis were conducted for all parties including;

                • Expense Analysis
                • Efficiency ratio
                • Supply-base analysis
                • Alternative market analysis
                • Overview analysis of the internal sourcing processes

                In parallel, ARC Consulting conducted a benchmark study of 5 other relevant sourcing and purchasing organizations to get an overview of the industry and identify industry trends and key takeaways for the alliance.

                Results

                ARC Consulting identified risks in the lack of a formal ownership within the alliance, as well as lack of well-defined strategy and guidelines for the joint sourcing process and no reviews of measurable KPI’s are conducted.

                The study also illustrated the trends of industry peers, such as increasing expansion on alternative markets, especially in Southeast Asia.

                The clients asked ARC Consulting to act as an trusted partner for the upcoming stages including setting up a new ownership structure, expanding to new markets as well as a implementing the findings in the strategic review.

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                  by Asia Perspective Asia Perspective No Comments

                  Asia Sourcing Risk Analysis for One of the Strongest Retail Brands in the Nordics

                  Asia Sourcing Risk Analysis for One of the Strongest Retail Brands in the Nordics

                  The client, one of the strongest retail brands in the Nordics, selling fast-moving consumer goods, have had a major sourcing presence in China for over a decade. However, the client was looking to get a comprehensive insight to the overall risks they were exposed to in Asia, as well as which actions was needed to mitigate these risks.

                  The client turned to ARC Consulting to conduct a sourcing risk assessment, including industry supplier specific risks.

                  The project consisted of three parts. Firstly, doing a comprehensive risk identification and analysis. Secondly, setting up a risk mitigation strategy in order to lower the probability and impact of identified risks. Lastly, setting up contingency plans in case that the identified risks actually happens.

                  The project comprised an assessment of the client’s entirety sourcing in China, including but not limited to, supply market trends, macro-economic risks, labor-related risks, geopolitical risks, trade risks, regulatory and administrative aspects, regional risks, CSR and PR-risks as well as supplier-specific risks.

                  The objective was to help the client to understand the potential risks they are facing when sourcing in China, as well as help them lower the probability and impact of the risks by setting up a step-by-step roadmap for the client.

                  Retailer warehouse

                  Opportunity

                  The client currently had a major sourcing presence in China with over 500 suppliers, delivering 26 product categories and a total of 5,100 items. Given the increasing labor cost in manufacturing as well as stricter governmental restrictions, a series of macro risks, such as increasing shipping cost and exchange rate floatation, environmental restriction, tax levying and export restriction was identified.

                  In addition, the study included a comprehensive overview at all of the clients 160 key suppliers, which was defined as those suppliers that are in the top 50% of the spend or volume in any category. The study found that over 20% of the total purchasing spend was spent on suppliers with one or several identified risks.

                  Industry and supplier specific risks were highlighted, and all categories were compared and evaluated against alternative markets in SEA.

                  Approach

                  The project was divided into several steps.

                  1. Initial analysis of sourcing data and category structure to identify key products and to enable cross category analysis of risks.
                  2. Process breakdown of key products in each category to fully understand the whole value chain.
                  3. Risk identification from several perspectives, including economical, administrative, political, labor, CSR, etc.
                  4. Risk measurement and quantification of both probability and potential impact. Risk criticality ranking based on both factors.
                  5. Developing practical plans for how to react in case a risk materializes, despite mitigating actions.

                  Recommendations

                  8 out of 26 categories was identified as high-risk categories, in term of labor shortage, increasing costs, environmental challenges, etc. Corresponding mitigation suggestions, such as closely monitoring the regulatory changes, shift to alternative sourcing regions, find back-up suppliers and regular negotiations were given.

                  Results

                  ARC Consulting provided the client with a ranking of the risks the client was facing, a strategic step-by-step mitigation plan, and ultimately sustainable and cost-saving recommendations. The sourcing risk assessment helped the client to understand the general sourcing risks and market trends in China, as well as act strategically on the recommendations provided when moving forward.

                  Read about our sourcing and supply chain management services and our expertise in the retail sector.

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                    by Asia Perspective Asia Perspective No Comments

                    Food sourcing research in South East Asia gives a head start to one of Sweden’s biggest retailers

                    Food sourcing research in South East Asia gives a head start to one of Sweden’s biggest retailers

                    The company is one of Sweden’s leading companies in the low-price market segment and has been conducting sourcing activities in Asia for several years. The company were looking into expanding their food sourcing in Asia and asked ARC Consulting to screen potential suppliers and traders in multiple countries in the SEA region for multiple food products.

                    Supplier search and screening was conducted in the chosen markets for multiple food products. The suppliers were ranked on the pre-defined criteria, set together with the client.

                    The clients then met with all the short-listed suppliers and further evaluated their capabilities and product offers on-site.

                    Food on supermarket shelves

                    Opportunity

                    Food category is typically not sourced directly from suppliers in the origin countries but from local wholesalers in Sweden and Europe. Today the client would like to expand their food sourcing in Asia and has identified potential sourcing opportunities SEA that they would like ARC Consulting to further investigate.

                    The client has already been conducting sourcing activities in Asia but focusing on sourcing such as textile, gardening, kitchen ware, etc. However, due to limited local know-how about the SEA markets the client asked ARC Consulting to help with supplier search and screening in the targeted markets.

                    Approach

                    Preparation: The project was initiated by a kick-off meeting between the ARC Consulting team and the client, which covered: Formulation of requirements and prerequisites for suppliers, setting review criteria, timeline, focus areas, and expected outcome.

                    Market Research & Master list: Supply market research was then conducted to build a master list of potential manufacturers and traders, using both ARC Consulting’s own database and external sources.

                    Supplier Evaluations: The suppliers were then screened and evaluated to initially confirm production capability of targeted products and motivations. RFI & RFQ were collected from all the suppliers.

                    Meeting Arrangement & Recommendations: A final report including Supplier Short List and recommendations for next steps were conducted as well as organized supplier meetings on-site for the client.

                    Recommendations

                    Supplier search and screening was conducted for two markets in SEA, and in total 9 suppliers made it onto the Supplier Short List, and they were ranked by three levels of priority based on pre-defined criteria.

                    During the supplier screening process, it was noticed that one market had a stronger supply market for the export of the targeted food products. The other market was not as strong, and none of the suppliers from this country were included in the Short List.

                    It was suggested that the client should meet with all the 9 suppliers and further evaluate their capabilities and product offers on-site.

                    Results

                    Based on the provided information by ARC Consulting, the client decided to follow the outlined recommendations and meet with all 9 suppliers. The client has started negotiations with multiple suppliers that ARC Consulting recommended.

                    See more about our sourcing consulting services and our experience in the consumer products sector.

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