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What Is the Supply Chain? Why Is It Important?

What Is the Supply Chain and How Does It Work?We live in a global economy, powered by a complex network of resources, materials, manufacturing, and transportation,…



The COVID-19 pandemic and Russia/Ukraine war have snarled global supply chains

Avigatorphotographer from Getty Images for iStockphoto; Canva

What Is the Supply Chain and How Does It Work?

We live in a global economy, powered by a complex network of resources, materials, manufacturing, and transportation, which work together to bring products and services to customers. This is known as the supply chain.

The supply chain is made up of a variety of players ranging from locally based raw material suppliers to large, transnational corporations: Each plays a role in the creation and distribution of the products that fuel everyday life, from the clothing we wear to the roofs above our heads to the food we consume and the chips that power our electronics—to name just a few.

How Was the Supply Chain Constructed?

The supply chain has been around since the Industrial Revolution, but there have been key developments in recent history:

  • World War II is to thank for many breakthroughs in logistics, since weapons and supplies needed to get to troops both quickly and efficiently.
  • After the war, there were other advancements, such as the invention of the storage pallet, which allowed goods to be consolidated and stacked vertically, and the shipping container, which can be moved by boat, truck, and railway car, enabling perishable items to be transported across great distances quickly—and saving both time and money.
  • The expansion of global trade in the 1980s, especially the rise of manufacturing in Asia, created a global division of labor and lowered prices for goods.
  • International trade agreements in the 1990s allowed countries to exchange products as well as raw materials with each other freely, building quite a web.

What Is Supply-Chain Management? What Do Supply Chain Managers Do?

True to its name, supply-chain management makes sure all of the moving parts needed to create a finished product are running smoothly. This includes:

  • Storing the raw materials needed to create a product
  • Sourcing cost-effective manufacturers
  • Assembling basic parts into finished products
  • Warehousing products until they are sold, and
  • Delivering the products to consumers

A supply-chain manager’s job is to maximize efficiencies and prevent shortages. They manage inventory, production, sales, and vendor and customer relations in order to increase profits. For instance, a supply chain manager could develop a strategic partnership with a vendor or lower production expenses by purchasing directly from the source.

Why Is Supply Chain Management Important?

Supply chain management is a critical component to any business’ success. It is important because it can reduce a company’s operating expenses and thus increase profitability.

What Are Some Types of Supply Chain Models?

There are several different kinds of supply chain models, and each business should choose the one best designed for its needs:

  1. The continuous flow model is designed to produce a steady cadence of the same product on high demand, usually for a well-established company. There is little modification to product design here. This model is all about maximizing efficiency. An example of this would be commodity manufacturing.
  2. The fast chain model is built for responsiveness. It’s used for trendy products with short lifecycles. Manufacturers who change their product lines quickly—and can be the first to hit the market—are the ones who win big here. Think apparel companies, like Nike, who can sell mass volumes of a particular design before it goes out of style. When the next trend comes along, they develop a new supply chain around it.
  3. The efficient model is designed for competitive businesses that need an “edge” to get ahead, whether it’s through inventory management, production output, or delivery logistics. The breakfast cereal market is an example of this: Products are very similar, and manufacturers sell to the exact same audience, so a cereal company like General Mills must figure out how to reduce costs, either along the supply chain or among its suppliers, in order to gain an advantage.
  4. Everything about the agile model is made to provide a cost-effective response to what customers want. Companies that follow this model don’t mass manufacture products; rather, they might have a base product that can be customized quickly to meet specific demand. The “copycat” clothing manufacturer, Zara, is one example.
  5. The custom configured model differs from the above models in that it centers around small batches of specialty products. This model requires greater setup time and produces products in limited-edition quantities. An example of this would be a furniture company that lets consumers choose finishes, design styles, etc.
  6. One model that strives to be the best of all worlds is the flexible model. Because of its flexible planning strategies, it can respond to high volume demand at peak season and survive long periods at low demand. An example of this would be the office supply store, Staples. It anticipates increased volume during the back-to-school shopping season but also uses seasonal contracts with suppliers, along with stocking algorithms, to lower production levels the rest of the year. 

What Is Behind the Current Supply Chain Issues? How Does the Supply Chain Impact Inflation?

The COVID-19 pandemic created a global tangle of disruption. Although vaccinations lessened the severity of the virus, the supply chain logjam became even more twisted in early 2022, when new, vaccine-resistant COVID-19 variants were discovered, and a war erupted in eastern Europe. These factors led to production and transportation issues in both food and energy supply chains, which resulted in higher prices—and whenever there’s an increase in prices, inflationary pressures are felt in the economy.

Let’s take a deeper look at each factor:

The COVID-19 Pandemic

The COVID-19 pandemic underscored the importance of a resilient supply chain. When the pandemic began, businesses with complex supply chains were hit especially hard as restrictions shuttered operations, sending workforces home. Borders were closed, which prevented raw materials and product shipments from entering countries.

Consumers who were stuck at home changed their buying habits, and businesses were left with billions of dollars of unsold goods, causing inventories to rise. However, as soon as stay-at-home restrictions were lifted, demand spiked, yet inventories were not able to be replenished quickly enough due to ongoing bottlenecks.

One example everyone remembers has to do with toilet paper. The White House estimates that stay-at-home orders caused a 40% increase in demand for retail toilet paper, which is softer than the kind used in restaurants and offices. Suppliers usually only keep 2-3 weeks’ worth of retail toilet paper inventories on-hand in their warehouses, and so when demand skyrocketed, they simply could not satisfy it fast enough.

Similarly, automotive makers witnessed a decrease in demand at the outset of pandemic and canceled orders of semiconductors, which require a long lead time. Cars are made of steel, rubber, plastic, and semiconductors, which all have their own web of supply chains, and so when demand returned, further delays ensued.

Other sectors affected by the pandemic included the housing market, which was devastated by an increase in commodities prices—spiking as high as 20%. The cost of framing lumber needed for a 2,000 sq foot house, for instance, jumped from just $7,000 in 2019 to more than $27,000 in 2021.

China’s 2022 Lockdown

In early 2022, the city of Shanghai experienced the most widespread COVID-19 outbreak since March 2020, based on the Omicron variant. From February 28 to June 1, 2022, Chinese authorities placed the entire city of 25 million, along with neighboring cities, under a lockdown. China has long held a “zero-tolerance policy” for COVID-19 but had been a bit more lenient with Shanghai, since it was an important manufacturing center as well as the world’s largest port.

Multinational companies with operations in China—,like Apple, which has assembly plants in Shanghai—were hammered. Amazon also operates out of Shanghai, and Adidas made the city its Chinese headquarters in 2017. Not only did the lockdown affect manufacturing, but it also impacted 2022 consumer sales—by as much as $4 billion in Q2 for Apple alone.

Now that the lockdown has ended, some manufacturers, like Volkswagen and Tesla, have been authorized to restart production, although it will take some time to reduce backlogs. The lockdown also snarled traffic for up to 20% of the world’s container ships, as they literally sat for weeks, waiting for their cargo to be offloaded. Some analysts believe shipment delays will be felt as late as 2023.

Russia’s Invasion of Ukraine

Russian President Vladimir Putin announced the Russian army’s invasion of Ukraine on February 24, 2022, saying his aim was to “demilitarize and de-Nazify Ukraine.” In the subsequent months, Russian military forces destroyed cities in the east part of the country, killed thousands of citizens, and displaced millions more.

This part of the world is rich in natural resources—its wheat products are used to feed developing nations, and its raw materials, like palladium and neon, are important components in semiconductors. Russia’s response to Western support of Ukraine was to cut off gas supplies to Poland and Bulgaria, which halted shipments of commodities, causing prices to increase even further.

More importantly, Russia is one of the world’s biggest oil suppliers, and the invasion resulted in the loss of supplies of 3 million barrels of oil per day, which pushed prices higher than $4 per gallon in the US. However, President Biden promised to tap strategic oil reserves in compensation.

The war has also tangled transportation logistics, which now face disruptions in the Black Sea, air restrictions over Russia and Ukraine, and freight issues across Eastern Europe. The whole world waits to see what will happen next.

Is There a Silver Lining?

Before you think the global supply chain is snarled beyond repair, there is some hope: The most recent reading from The New York Federal Reserve’s Global Supply Chain Pressure Index (GSCPI) reveals that pressures declined in May 2022, and its three-month reading indicates that they may have actually stabilized.

This index factors in data from a variety of sources, including backlogs, freight issues, and delivery times, and stretches back to 1997. Changes in pressures are associated with producer price inflation in the United States, making this dataset useful to watch. We look forward to seeing if a peak has occurred.

The GSPCI is released on the fourth business day of every month; the next index will be published on July 6. 2022.

© 2022 Federal Reserve Bank of New York. Sources: Bureau of Labor Statistics; Harper Petersen Holding GmbH; Baltic Exchange; IHS Markit; Institute for Supply Management; Haver Analytics; Refinitiv; authors’ calculations.

How Will Supply Chain Issues Be Resolved?

Throughout globalization, a business’ main objective was to maximize efficiencies. Most companies did this through an inventory management method known as “just in time,” which allowed them to receive goods from suppliers only when they were needed.

Now, as shocks from pandemics, climate change, and war create mass disruption the world over, companies are acknowledging that they need to take delays into consideration through their strategic planning processes. They can do this by identifying the weak links in their networks and prioritizing digital technologies, which might alleviate the need for human drivers.

Their aim has now become the creation of “just in case” backup systems, which guarantee a minimal level of supply during times of crisis. This method involves a greater reliance on robotics, AI, and machine learning.

Are the Terms “Supply Chain” and “Logistics” Interchangeable?

Logistics makes up an important part of the overall supply chain, but the two terms are not interchangeable. The term “supply chain” encompasses much more than logistics and also includes activities like manufacturing and delivery.

What Does Transparency in the Supply Chain Mean?

Transparency is an incredibly important part of the supply chain, and fortunately, most companies pledge to be socially responsible in their business practices in order to be accountable to their customers. How do they achieve this? By making sure their suppliers are acting according to legal and ethical standards in terms of raw material extraction methods, labor practices, and product pricing, to name just a few.

When Will Supply Chain Issues End? Which Supply Chain Shortages Are Coming?’s Dan Weil has identified five factors to watch to see if supply chain issues will resolve in 2022.

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How They Convinced Trump To Lock Down

How They Convinced Trump To Lock Down

Authored by Jeffrey A. Tucker via Brownstone Institute,

An enduring mystery for three years is how…



How They Convinced Trump To Lock Down

Authored by Jeffrey A. Tucker via Brownstone Institute,

An enduring mystery for three years is how Donald Trump came to be the president who shut down American society for what turned out to be a manageable respiratory virus, setting off an unspeakable crisis with waves of destructive fallout that continue to this day. 

Let’s review the timeline and offer some well-founded speculations about what happened. 

On March 9, 2020, Trump was still of the opinion that the virus could be handled by normal means. 

Two days later, he changed his tune. He was ready to use the full power of the federal government in a war on the virus. 

What changed? Deborah Birx reports in her book that Trump had a friend die in a New York hospital and this is what shifted his opinion. Jared Kushner reports that he simply listened to reason. Mike Pence says he was persuaded that his staff would respect him more. No question (and based on all existing reports) that he found himself surrounded by “trusted advisors” amounting to about 5 or so people (including Mike Pence and Pfizer board member Scott Gottlieb)

It was only a week later when Trump issued the edict to close all “indoor and outdoor venues where people congregate,” initiating the biggest regime change in US history that flew in the face of all rights and liberties Americans had previously taken for granted. It was the ultimate in political triangulation: as John F. Kennedy cut taxes, Nixon opened China, and Clinton reformed welfare, Trump shut down the economy he promised to revive. This action confounded critics on all sides. 

A month later, Trump said his decision to have “turned off” the economy saved millions of lives, later even claiming to have saved billions. He has yet to admit error. 

Even as late as June 23rd of that year, Trump was demanding credit for having followed all of Fauci’s recommendations. Why do they love him and hate me, he wanted to know. 

Something about this story has never really added up. How could one person have been so persuaded by a handful of others such as Fauci, Birx, Pence, and Kushner and his friends? He surely had other sources of information – some other scenario or intelligence – that fed into his disastrous decision. 

In one version of events, his advisors simply pointed to the supposed success of Xi Jinping in enacting lockdowns in Wuhan, which the World Health Organization claimed had stopped infections and brought the virus under control. Perhaps his advisors flattered Trump with the observation that he is at least as great as the president of China so he should be bold and enact the same policies here. 

One problem with this scenario is timing. The Oval Office meetings that preceded his March 16, 2020, edict took place the weekend of the 14th and 15th, Friday and Saturday. It was already clear by the 11th that Trump was ready for lockdowns. This was the same day as Fauci’s deliberately misleading testimony to the House Oversight Committee in which he rattled the room with predictions of Hollywood-style carnage. 

On the 12th, Trump shut all travel from Europe, the UK, and Australia, causing huge human pile-ups at international airports. On the 13th, the Department of Health and Human Services issued a classified document that transferred control of pandemic policy from the CDC to the National Security Council and eventually the Department of Homeland Security. By the time that Trump met with Fauci and Birx in that legendary weekend, the country was already under quasi-martial law. 

Isolating the date in the trajectory here, it is apparent that whatever happened to change Trump occurred on March 10, 2020, the day after his Tweet saying there should be no shutdowns and one day before Fauci’s testimony. 

That something very likely revolves around the most substantial discovery we’ve made in three years of investigations. It was Debbie Lerman who first cracked the code: Covid policy was forged not by the public-health bureaucracies but by the national-security sector of the administrative state. She has further explained that this occurred because of two critical features of the response: 1) the belief that this virus came from a lab leak, and 2) the vaccine was the biosecurity countermeasure pushed by the same people as the fix. 

Knowing this, we gain greater insight into 1) why Trump changed his mind, 2) why he has never explained this momentous decision and otherwise completely avoids the topic, and 3) why it has been so unbearably difficult to find out any information about these mysterious few days other than the pablum served up in books designed to earn royalties for authors like Birx, Pence, and Kushner. 

Based on a number of second-hand reports, all available clues we have assembled, and the context of the times, the following scenario seems most likely. On March 10, and in response to Trump’s dismissive tweet the day before, some trusted sources within and around the National Security Council (Matthew Pottinger and Michael Callahan, for example), and probably involving some from military command and others, came to Trump to let him know a highly classified secret. 

Imagine a scene from Get Smart with the Cone of Silence, for example. These are the events in the life of statecraft that infuse powerful people with a sense of their personal awesomeness. The fate of all of society rests on their shoulders and the decisions they make at this point. Of course they are sworn to intense secrecy following the great reveal. 

The revelation was that the virus was not a textbook virus but something far more threatening and terrible. It came from a research lab in Wuhan. It might in fact be a bioweapon. This is why Xi had to do extreme things to protect his people. The US should do the same, they said, and there is a fix available too and it is being carefully guarded by the military. 

It seems that the virus had already been mapped in order to make a vaccine to protect the population. Thanks to 20 years of research on mRNA platforms, they told him,  this vaccine can be rolled out in months, not years. That means that Trump can lock down and distribute vaccines to save everyone from the China virus, all in time for the election. Doing this would not only assure his reelection but guarantee that he would go down in history as one of the greatest US presidents of all time. 

This meeting might only have lasted an hour or two – and might have included a parade of people with the highest-level security clearances – but it was enough to convince Trump. After all, he had battled China for two previous years, imposing tariffs and making all sorts of threats. It was easy to believe at that point that China might have initiated biological warfare as retaliation. That’s why he made the decision to use all the power of the presidency to push a lockdown under emergency rule. 

To be sure, the Constitution does not allow him to override the discretion of the states but with the weight of the office complete with enough funding and persuasion, he could make it happen. And thus did he make the fateful decision that not only wrecked his presidency but the country too, imposing harms that will last a generation. 

It only took a few weeks for Trump to become suspicious about what happened. For weeks and months, he toggled between believing that he was tricked and believing that he did the right thing. He had already approved another 30 days of lockdowns and even inveighed against Georgia and later Florida for opening. He went so far as to claim that no state could open without his approval. 

He did not fully change his mind until August, when Scott Atlas revealed the whole con to him. 

There is another fascinating feature to this entirely plausible scenario. Even as Trump’s advisors were telling him that this could be a bioweapon leaked from the lab in China, we had Anthony Fauci and his cronies going to great lengths to deny it was a lab leak (even if they believed that it was). This created an interesting situation. The NIH and those surrounding Fauci were publicly insisting that the virus was of zoonotic origin, even as Trump’s circle was telling the president that it should be regarded as a bioweapon. 

Fauci belonged to both camps, which suggests that Trump very likely knew of Fauci’s deception all along: the “noble lie” to protect the public from knowing the truth. Trump had to be fine with that. 

Gradually following the lockdown edicts and the takeover by the Department of Homeland Security, in cooperation with a very hostile CDC, Trump lost power and influence over his own government, which is why his later Tweets urging a reopening fell on deaf ears. To top it off, the vaccine failed to arrive in time for the election. This is because Fauci himself delayed the rollout until after the election, claiming that the trials were not racially diverse enough. Thus Trump’s gambit completely failed, despite all the promises of those around him that it was a guaranteed way to win reelection.

To be sure, this scenario cannot be proven because the entire event – certainly the most dramatic political move in at least a generation and one with unspeakable costs for the country – remains cloaked in secrecy. Not even Senator Rand Paul can get the information he needs because it remains classified. If anyone thinks the Biden approval of releasing documents will show what we need, that person is naive. Still, the above scenario fits all available facts and it is confirmed by second-hand reports from inside the White House. 

It’s enough for a great movie or a play of Shakespearean levels of tragedy. And to this day, none of the main players are speaking openly about it. 

Jeffrey A. Tucker is Founder and President of the Brownstone Institute. He is also Senior Economics Columnist for Epoch Times, author of 10 books, including Liberty or Lockdown, and thousands of articles in the scholarly and popular press. He speaks widely on topics of economics, technology, social philosophy, and culture.

Tyler Durden Fri, 03/24/2023 - 17:40

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Could the common cold give children immunity against COVID? Our research offers clues

Certain immune cells acquired from a coronavirus that causes the common cold appear to react to COVID – but more so in children that adults.

Why children are less likely to become severely ill with COVID compared with adults is not clear. Some have suggested that it might be because children are less likely to have diseases, such as type 2 diabetes and high blood pressure, that are known to be linked to more severe COVID. Others have suggested that it could be because of a difference in ACE2 receptors in children – ACE2 receptors being the route through which the virus enters our cells.

Some scientists have also suggested that children may have a higher level of existing immunity to COVID compared with adults. In particular, this immunity is thought to come from memory T cells (immune cells that help your body remember invading germs and destroy them) generated by common colds – some of which are caused by coronaviruses.

We put this theory to the test in a recent study. We found that T cells previously activated by a coronavirus that causes the common cold recognise SARS-CoV-2 (the virus that causes COVID) in children. And these responses declined with age.

Read more: Does COVID really damage your immune system and make you more vulnerable to infections? The evidence is lacking

Early in the pandemic, scientists observed the presence of memory T cells able to recognise SARS-CoV-2 in people who had never been exposed to the virus. Such cells are often called cross-reactive T cells, as they stem from past infections due to pathogens other than SARS-CoV-2. Research has suggested these cells may provide some protection against COVID, and even enhance responses to COVID vaccines.

What we did

We used blood samples from children, sampled at age two and then again at age six, before the pandemic. We also included adults, none of whom had previously been infected with SARS-CoV-2.

In these blood samples, we looked for T cells specific to one of the coronaviruses that causes the common cold (called OC43) and for T cells that reacted against SARS-CoV-2.

We used an advanced technique called high-dimensional flow cytometry, which enabled us to identify T cells and characterise their state in significant detail. In particular, we looked at T cells’ reactivity against OC43 and SARS-CoV-2.

We found SARS-CoV-2 cross-reactive T cells were closely linked to the frequency of OC43-specific memory T cells, which was higher in children than in adults. The cross-reactive T cell response was evident in two-year-olds, strongest at age six, and then subsequently became weaker with advancing age.

We don’t know for sure if the presence of these T cells translates to protection against COVID, or how much. But this existing immunity, which appears to be especially potent in early life, could go some way to explaining why children tend to fare better than adults with a COVID infection.

A little boy sleeps with a teddy bear.
Children are less likely to get very sick from COVID than adults. Dragana Gordic/Shutterstock

Some limitations

Our study is based on samples from adults (26-83 years old) and children at age two and six. We didn’t analyse samples from children of other ages, which will be important to further understand age differences, especially considering that the mortality rate from COVID in children is lowest from ages five to nine, and higher in younger children. We also didn’t have samples from teenagers or adults younger than 26.

In addition, our study investigated T cells circulating in the blood. But immune cells are also found in other parts of the body. It remains to be determined whether the age differences we observed in our study would be similar in samples from the lower respiratory tract or tonsil tissue, for example, in which T cells reactive against SARS-CoV-2 have also been detected in adults who haven’t been exposed to the virus.

Read more: Colds, flu and COVID: how diet and lifestyle can boost your immune system

Nonetheless, this study provides new insights into T cells in the context of COVID in children and adults. Advancing our understanding of memory T cell development and maturation could help guide future vaccines and therapies.

Marion Humbert received funding from KI Foundation for Virus Research (Karolinsk Institutet, Sweden) and Läkare mot AIDS (Sweden).

Annika Karlsson receives funding from the Swedish Research Council (Dnr 2020-02033), CIMED project grant, senior (Dnr: 20190495), and Karolinska Institutet (Dnr: 2019-00931 and 2020-01599).

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Spread & Containment

Where there’s smoke, there’s thiocyanate: McMaster researchers find tobacco users in Canada are exposed to higher levels of cyanide than other regions

HAMILTON, ON – Mar 24, 2024 – Tobacco users in Canada are exposed to higher levels of cyanide than smokers in lower-income nations, according to a…



HAMILTON, ON – Mar 24, 2024 Tobacco users in Canada are exposed to higher levels of cyanide than smokers in lower-income nations, according to a large-scale population health study from McMaster University.

Credit: McMaster University

HAMILTON, ON – Mar 24, 2024 Tobacco users in Canada are exposed to higher levels of cyanide than smokers in lower-income nations, according to a large-scale population health study from McMaster University.

Scientists made the discovery while investigating the molecule thiocyanate – a detoxified metabolite excreted by the body after cyanide inhalation. It was measured as a urinary biomarker of tobacco use in a study of self-reported smokers and non-smokers from 14 countries of varying socioeconomic status.

“We expected the urinary thiocyanate levels would be similar across regions and reflect primarily smoking intensity. However, we noticed significant elevation of thiocyanate in smokers from high-income countries even after adjusting for differences in the number of cigarettes smoked per day,” says Philip Britz-McKibbin, co-author of the study and a professor of chemistry and chemical biology at McMaster.

Tobacco-related illness remains the leading cause of preventable illness and premature death in Canada, contributing to approximately 48,000 deaths annually. According to researchers, the findings could be caused by the type of cigarettes smoked in high-income countries like Canada.

“The cigarettes commonly consumed in Canada are highly engineered products with lower tar and nicotine content to imply they’re less harmful. Heavy smokers with nicotine dependence compensate by smoking more aggressively with more frequent and deeper inhalations that may elicit more harm, such as greater exposure to the respiratory and cardiotoxin, cyanide.”

Smoking rates in Canada have declined from 26 per cent in 2001 to 13 per cent in 2020. But participation in smoking cessation programs has declined during the COVID-19 pandemic, leading to concern about a potential uptick in smoking rates, including cannabis use and a plethora of vaping of products popular among young adults.

Researchers say urinary thiocyanate can serve as a robust biomarker of the harms of tobacco smoke that will aid future research on the global tobacco picture, since most smokers now reside in developing countries. As smoking rates have decreased here in Canada, at-risk groups like youth and pregnant women have been prone to underreport their tobacco use when surveyed, making a reliable biomarker more valuable.

“Historically assessing tobacco behaviors have relied on questionnaires that are prone to bias, especially when comparing different countries and local cultures. The idea is to find robust methods that can quantify recent tobacco smoke exposure more reliably and objectively, which may better predict disease risk and prioritize interventions for smoking cessation.” says Britz-Mckibbin.

The study was published in the latest issue of Nicotine and Tobacco Research and received funding from the Natural Sciences and Engineering Research Council of Canada, Genome Canada, the Canada Foundation for Innovation, Hamilton Health Sciences New Investigator Fund, and an internal grant from the Population Health Research Institute.




For more information please contact:

Matt Innes-Leroux

Media Relations

McMaster University

647-921-5461 (c)


Photos of Philip Britz-McKibbin can be found here

Credit: McMaster University

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