Supply Chain Woes Driving Shifts In Data Center Construction

Supply chain disruptions continue to plague data center development, forcing owners, designers and builders to make big changes to keep up with unprecedented demand. 

The data center industry may be in the middle of a record wave of development, but the pace of the build-out continues to be severely hampered by long lead times, unexpected delivery delays and quality control issues impacting a range of critical equipment needed for these projects — from generators to highly specialized cooling and power management systems.

Some manufacturers of key systems are projecting lead times of up to two years, forcing developers to scramble for alternatives.

This uncertainty means data center projects are breaking ground with critical design elements unresolved. It is forcing owners, designers and builders to dramatically adjust how they approach these projects and prepare for the inevitability of big design changes on short notice, all in an industry where speed to market is everything. 

“We're being asked to do a lot of things differently, like quickly evaluating changes on previously vetted designs or changes in components and systems just to meet the supply chain need or the needs of the equipment that’s on-site,” Syska Hennessy Group principal Joshua Fluecke said at Bisnow’s DICE Midwest event in September. “It’s forcing us to be nimble and really taking a team effort to make sure things get back on track and on schedule.”  

Nearly three years after the onset of the pandemic wreaked havoc on global supply chains, data center builders continue to face long lead times for equipment from almost all major suppliers and expected wait times that shift from week to week.

It can mean waiting more than 80 weeks for emergency generators, while orders placed today for power management systems may take one to two years to be filled, industry insiders told Bisnow. Backup power systems, switching gear, and the chillers and HVAC equipment needed to cool data centers are all looking at lead times of close to a year.

Insiders say unexpected delays due to holdups in shipping are becoming increasingly common, further complicating the logistics puzzle for data center builders.

“I’m always just waiting on that next email from one of my vendors saying, 'Hey, by the way, remember that item that we've talked about every week for the last two years? Turns out, it's going to be eight weeks later than you thought it was going to be,'” said Dave Rooke, a data centers project manager with Mortenson Construction. “There's nothing anyone can do about it, and there's no amount of money that can move it faster.”

Rooke said overburdened manufacturers have also struggled with quality control, leading to equipment showing up on job sites that has different specifications or dimensions than what was ordered.

It is a trend that Syska Hennessy’s Fluecke said he has seen too. But with maxed-out manufacturers unable to provide replacements, developers have no choice but to make do with whatever equipment appears, he said.

“We're seeing surprises where we will have agreed to something [with a manufacturer], and it shows up on-site and it's a little different or the dimensions are off — nobody knew about it, but now we have to react to it,” Fluecke said. “A lot of construction is about certainty and knowing exactly what we're doing, and a degree of uncertainty has been shifted into the equation.”

Uncertainty is changing how data centers are designed and built.

Owners have had to be increasingly flexible about which equipment and systems they use. If the specific generator set or proprietary cooling system a data center provider uses in all of its facilities is unavailable for the next two years, such companies are increasingly willing to consider alternatives that are more readily available. 

But it is rarely as simple as just swapping out a specific piece of equipment. Experts say these changes often necessitate significant redesigns and changes in how sections of a data center are built. The same is true when equipment delivered to the job site has slightly different dimensions or design specifications than what builders planned for. 

Successfully navigating this new reality of constant design changes over the course of a build while staying on schedule requires greater collaboration than was typically needed in the past. 

“You’ve got to be able to adapt and overcome, and that takes a great deal of effort with us, with the design team and with the owner,” Mortenson’s Rooke said. “It’s a lot of transparency and everyone working together for a common goal. You need the design team to crunch numbers quickly, you need your owner to be flexible with what their requirements are. It’s a huge team effort and it has to happen quickly.”

General contractors, whose contracts now typically exempt them from owing damages due to delays created by supply chain issues, are being brought in earlier in the process. This allows procurement of materials and equipment to begin sooner and provides a longer runway to establish how materials availability will determine the sequence of construction. 

Paradigm Structural Engineers founding principal Kurt Lindorfer said the design process has also become more adaptable to prevent unexpected costs and delays, owing to now-inevitable changes in equipment and order of construction. 

How his firm approaches structural supports that hold mechanical equipment on the roof of a data center is a case in point. While those steel supports used to be completed early in the construction process, along with the building’s steel frame, he now holds off on a final design until roof-based equipment actually arrives on-site due to the likelihood its dimensions and other specifications will differ from what was initially anticipated.

“We design things to be adaptive,” Lindorfer said. “What we are finding a lot of times is that with this unknown information on delivery of the equipment, we're having to make a lot of assumptions. It happens more and more where we as designers are saying, 'Let's hold off … let's put that in when it's needed.' In many ways, it’s now a just-in-time production.”