   
 | From the Editor's Desk
The Coronavirus Has Upended Supply Chains. Here's How Companies Can Prepare for the Next Disruption. Over the decades, global companies have concentrated production geographically in order to save money.
Yet even before COVID-19, as Chopra and his coauthors argued in a 2014 article, the marginal benefits for this kind of concentration were diminishing, while the risks were increasing.
"The additional cost of a large company operating plants in different locations is often not more than the cost of having one huge plant," Chopra says. "You may reach the limit of your economies of scale at half the size, so by running two plants, you don’t give up much in efficiency, but you gain a lot in resiliency."
In other words, whether you have one plant that can produce a million items a week or two plants making 500,000 items each, in both cases you may be producing so many items that you are already close to achieving whatever economy of scale is possible. But the likelihood of both plants going offline at the same time decreases significantly.
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