Giving Compass' Take:

• Sarah Golden, writing for GreenBiz, discusses lessons learned in supply chain resilience during COVID-19. 

• What opportunities are emerging for the U.S. to evaluate and analyze local supply chains during this time? 

• Check out these coronavirus and COVID-19 resilience funds.

As we work to future-proof our economy, this pandemic may give rise to the power and value of local sourcing.

While I knew vaguely how globally interconnected our economy was, I didn’t really think about it until parts started to break down. It took everything falling apart for me to understand how it fits together.

Nearly 75 percent of U.S. companies have seen supply chain disruptions, and an analysis of supply chains in early March shows that the world’s largest 1,000 companies or their suppliers have more than 12,000 facilities in quarantined areas of China, Italy and South Korea. (Of course, it’s hard to stay current in this news environment: Just two weeks later, the impacts are more far-reaching. I’m writing this from my home in the San Francisco Bay Area, which is now under orders to shelter in place.)

While the specifics are different, the lesson is similar: When we rely on centralized supply and fragile distribution systems, we’re vulnerable to disruptions that may result in economic impacts not properly accounted for in the cost of supplies.

Companies reliant on single sourcing for upstream supplies are likely regretting not better analyzing the potential for disruption. It reflects a failure of risk management principles, according to the Harvard Business Review, showing businesses failed to monitor supply chains and understand potential disruptions.

The unprecedented response to coronavirus, however, may provide the best argument for local resilience we’ve had. For the first time, I feel connected to communities everywhere by the same common threat and solution. Perhaps there’s never been a better (or more bleak) argument for local resilience than the coronavirus.

Supply chain disruptions also highlight the global sourcing for components that comprise consumer goods. As a friend once whimsically put it: If a string were to connect all items and materials in your house to their places of origin, the world would be covered in string.

Read the full article about resilience during COVID-19 by Sarah Golden at GreenBiz.