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How data centres are transforming their supply chains

Rowland Kinch

Rowland Kinch

CEO at Custodian Data Centres
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Order today for delivery tomorrow. This level of logistical support had become the norm across all industries and sectors, including the data centre space, before the pandemic. The impact of Covid-19 has forced massive change across all supply chains which has led to companies adapting to this new global economy.

Enterprises use technology to drive their businesses forward as a fundamental component of their post-pandemic business strategy. A major part of these strategies is how they manage their data infrastructure. Business leaders are looking to their data centre partners to deliver on-demand bespoke services which in turn are requiring data centres themselves to transform their supply chains. Today, a more holistic approach is required from data centre operators to shape new supply chains that are more flexible and resilient to change.

Data centre operators have had to carefully assess other aspects of their operations, none more so than their energy supplies. With global pressure on energy generation and delivery, data centres have become creative and strategic, creating new tactics to ensure they have consistent and reliable energy supplies.

As the demand for data centre services continues to expand, new approaches to asset sourcing must form the foundation that data centres can build their new supply chains upon. If a supply chain is unstable, this restricts customers from having the ability to expand their infrastructure. For example, if additional multiple racks are required quickly for them to grow, supply chain delays could affect this company growth.

Industry dynamics

One of the starkest impacts of the pandemic on data centres is the drive to enhance their ESG credentials. A greater focus on environmental factors has meant the data centre industry is taking practical action to reduce its environmental impact. One clear method is a root and branch assessment of their supply chains. For data centres, identifying new suppliers with exceptional environmental credentials should be a key driver in order to keep existing customers and to create interest amongst new potential customers.

With the growing supply chain restraints, many operators have had to expand from their existing suppliers to secure the required infrastructure. Looking outside of the usual supply lines can often reveal new potential suppliers that can be highly cost-effective and deliver components via innovative logistical routes. Post-pandemic, data centres must be dynamic and thoughtful in their approach to their supply chains.

Post-pandemic resilience

With ordering lead times continuing to lengthen, data centres that may have short-term strategic planning in place now need to think in much longer timelines. Understanding existing and potential tenants’ demand curves will enable data centres to become more proactive with their supply chains. A reliance on relatively few suppliers must rapidly change to encompass many more manufacturers and OEMs to create a new supply chain that is far less fragile.

There has been some positives coming through the supply chain delays, with the demand for data and space within data centres so high, customers have taken alternative routes to get their infrastructure live. This has seen a rise in renovated equipment, contributing to a more circular economy and overall less technology equipment waste. Not only will this attribute to the client’s overall CSR initiative, but this also allows quick installation, getting their infrastructure live, faster.

The exploration of suppliers is a practical change data centres can take to improve the resilience of their supply chains. Validating the suppliers that are mission critical to data centres should be an ongoing process; this will reveal any issues with time to react and mitigate the impact of any supply chain breakdown.

The just-in-time approach to supply chain logistics has been a prevailing model for decades. However, as we enter this new period, procurement must be more flexible and dynamic, focusing on a multifaceted approach that will enable data centres to access the supplies needed to remain competitive and deliver world-class services to their clients.

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