5 Ways to Mitigate Supply Chain Unpredictability and Labor Shortages in Data Center Construction

Blake Weaver, Data Center Specialist, ProLift Rigging

It is overwhelmingly evident that the pandemic has redefined the way many businesses operate.  The seismic shift to video conferencing, cloud collaboration, streaming, etc. has sparked unprecedented growth in demand for data center capacity.  According to a recent Data Center Frontier article, Buddy Rizer, who serves as the Executive Director of Economic Development for Loudoun County, Va. (a.k.a. Data Center Alley), stated, “This year [2020] has been crazy. We’ve had 26 fast-track (data center construction) projects since March. Normally, we’ll have 15 in an entire year, so that’s more than twice as many projects than ever before”. No doubt this is encouraging for all involved in the data center space; but this does come with some additional challenges.

In a recent DICEUSA Virtual Summit panel discussion, a collection of major data center operators highlighted the biggest challenges currently facing data center construction.  The top two challenges were an unpredictable supply chain and shortage of qualified labor. Covid-19 has certainly disrupted both the supply chain and labor pool, but other factors also contribute to these challenges.  For instance, the construction labor pool in general is aging.  Millennials aren’t flocking to the trades.  Regarding the supply chain, manufacturers are tasked with accelerated production and delivery schedules.  Keeping up with the increased demand is one thing but trying to sync production schedules with construction timeframes presents a whole new set of obstacles.

As the data center industry rapidly expands, how can owners, contractors, OEMs, etc. overcome these challenges?  Below are five possible ways to help mitigate supply chain unpredictability and labor shortages on data center construction sites across the country:

1. 1. Turnkey Solutions: The traditional construction approach calls for a variety of different contractors being responsible for very specific pieces of the construction process. Leaning on partners that offer turnkey solutions helps minimize the reliance on a wider range of players. Furthermore, combining multiple solutions into one partner can help eliminate unpredictability and risk. One example is finding a partner that can not only provide rigging and heavy lifting services, but also the combination of transportation, storage, logistics management, installation, welding, etc. This streamlines the supply chain and reduces the number of skilled laborers needed in the process.
   2. Project Buffering: For many owners building data centers, there are a handful of projects scattered across the country all underway simultaneously. Having storage space near these construction sites is critical for meeting the construction schedule. These storage locations can serve as off-site staging areas whenever JIT deliveries to the jobsite are not possible. Moreover, these warehouses act as pressure relief valves to the supply chain, which ultimately increases the predictability of on-site deliveries of mission critical equipment. Without these staging areas, a single transportation delay involving mission critical equipment could cause a ripple effect to the schedule that is next to impossible to make up.
   3. Dedicated Account Coordination: The sheer volume of logistics involved in data center construction is enough to overwhelm project management and lead to oversight of small details, causing critical delays both upstream and downstream. This can be greatly reduced with the implementation of dedicated account coordination. This is often an individual or team who consolidates critical information and provides real-time visibility into the tracking/tracing of shipments, inventory reporting, transportation arrangement, etc. for all major stakeholders. This can be orchestrated through a customizable cloud-based platform for convenient access among key stakeholders. The intense visibility and coordination ultimately ensure precise schedule synchronization between equipment production and construction timelines. Again, this approach greatly increases predictability throughout the supply chain.
   4. National and Flexible Labor Pool: Although there is often value in sourcing local labor, there is also a competitive advantage in utilizing partners with national resources. These partners can adapt and provide labor across the country when needed. Furthermore, data center construction requires many specialized trades, so it can be beneficial when there is redundancy of disciplines or skills among the craft workers. For instance, some riggers are also qualified as welders, millwrights, crane operators, CDL drivers, etc.This creates flexibility within the crew, and it helps consolidate the crew size needed to perform the work.
   5. Workforce Development: As mentioned earlier, the construction labor pool is aging, and new talent is needed to fill the vacancies. Contractors especially have a large responsibility to address this issue. According to the Association of General Contractors’ (AGC) website, “Industry recruitment and retention are essential to the future of the construction industry. Just as important as finding craft workers, project managers, and supervisors, is ensuring that these essential workers are properly educated and trained”. ProLift Rigging has responded to this industry challenge by developing a Heavy Rigging Trainee Program. Encouraging new participation within the industry is not simply an internal focus.  It is a small yet intentional way to help steward the future of the industry.

Identifying and eliminating risks within the supply chain and labor pool is a key component to ProLift Rigging’s approach. For more information about these methods feel free to contact Blake Weaver at [email protected].

Blake Weaver is a Data Center Specialist at ProLift Rigging.