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By Frank Nash and Bill Mazzetti
Previously, a linear process involved a consultant working with a client who called out the needs of the business. The consultant would put together a rough design, typically around the worst-case scenario and largest hardware footprint. The design would be put out to RFP and, generally speaking, the lowest bidder won.
Now, it’s table stakes for manufacturers to participate in that process and ever more important for the entire “value chain” — vendors, consultants, builders, contractors, integrators, etc. — to work together up front, in a more open way. A lack of coordination leads to inefficiency, an obvious deterrent to speed. Minimizing inefficiency requires a more collaborative approach. The higher the demand, the faster the need to deploy, and the more connected stakeholders need to be. In the end, it’s shuffling the sequence and then overlapping several activities that had been traditionally serially sequenced.
Such huge demand for speed and scale also means that cost may not be the top consideration in deployments any longer. Traditional procurement methods, where purchasers make decisions primarily based on price but are mostly removed from the reality of the business case, is becoming obsolete. Considering the timeframe principals in this industry have been operating, hardware and construction costs are well-known. This knowledge should allow organizations to baseline deployment and purchasing decisions as opposed to resorting to a pure RFP-based purchasing exercise.
Rather, resources and scheduling are the new priorities as a skilled labor shortage is jeopardizing the ability to meet project schedules. In the electrical contractor field alone, the National Electrical Contractor’s Association (NECA) research predicts the need for 300,000 more electricians between now and 2025 — a far greater number than currently on that intended career path.
FROM VALUE CHAIN TO SUPPLY CHAIN
Hyperscale providers have moved the design and build process from transactional to strategic because the operations therein are core to the business and critical to meeting the ever-increasing expectations of the digital world. As the market has outpaced vendors’ capacity to manufacture and construct against it, the industry is playing catchup.
Still, as demand continues to increase and the labor scarcity grows, the product stream remains constricted. To address this obstacle, some manufacturers are establishing dedicated capacity for the hyperscale segment so as not to interrupt the flow of their core businesses. After all, construction in other key building sectors is still growing — albeit at less of a steep curve.
But this approach alone won’t be enough. The hyperscale paradigm combined with resource constraints is dictating a new approach to the entire supply chain. For one, standardization in the form of prefabricated solutions can help eliminate the need for custom engineering and reduce on-site man-hour requirements, as well as baseline schedule and project assumptions by all on-site participants. This is the paradigm shift from the top-down approach that has been tradition for decades.
Pre-integration and testing in a controlled manufacturing environment enables not just speed to market but also higher reliability. Data Center facilities are subjected to rigorous commissioning exercises. Assembling and testing components and hardware sub-assemblies as well as integrating monitoring systems, can be done partially or fully in a factory, avoiding the need for valuable labor on site.
Ideally, and especially during times of constrained capacity, workers can perform to the highest level of their skillsets for the longest time every day. That is, in part, what prefabricated solutions enable. What can be automated should be automated. Admins on a job site, for instance, shouldn’t have to fill out forms. That’s not efficient, rewarding or impactful.
Some manufacturers and contractors are integrating an “Uber approach” as another means of addressing capacity constraints, a tighter labor pool and their inability to bring new manufacturing facilities online expediently. This method leverages other third-party partners to supplement their own capacity; for example, employing smaller builders that can more easily meet spot spikes. Third-party integrators fall into this category as well.
Streamlining the supply chain process with prefabricated solutions and auxiliary providers will hasten delivery and get hyperscale data centers up and running in the field faster. Reinventing such practices also depends on higher collaboration. Together, the value chain stakeholders must determine what can and should be done in which environment and how; at the fastest possible pace at the most reasonable price.
THE PAST IS NOT SUSTAINABLE
The way it was ‘always done’ will not lead to successful design and build of hyperscale data centers. To compete, it’s time to break habits in place since the 1970s. Purchase, bid, evaluate and contract is a thing of the past and a linear, engineering approach will cost more and take longer to deploy in this exploding market sector. This is no different than the past two major paradigm shifts in the data center industry – the Tier/Class grading system where none previously existed, rendering measurable standards for data center facilities; and the data center real estate solutions that productized those assumptions, while transferring financial and operational responsibilities to service providers. This dynamic is no different. It’s merely the next frontier in the chase for efficiency. Integrated project delivery is that new model. It brings all players to the table with a standardized process for optimized results.
Frank Nash is Senior Director of Sales for Schneider Electric Data Center Solutions. He can be reached at [email protected]. Bill Mazzetti is Senior Vice President and Chief Engineer for Rosendin Electric. He can be reached at [email protected].
