Overcoming Supply Chain Challenges Through Modular Construction


Overcoming Supply Chain Challenges Through Modular Construction

Supply chain issues continue to make the timeline and costs of data center construction projects unpredictable. By choosing prefabrication, you can remove much of this unpredictability, achieve tighter timelines and lower set costs. Modular data center (MDC) construction offers a viable solution for building or expanding data center capacity amidst ongoing supply chain challenges.

Supply Chain Issues Continuing to Plague the Data Center Industry

Even as the pandemic fades into the background, supply chain disruptions persist. Although these disruptions impact various industries, they are particularly felt in the data center industry, in which demand continues to grow

During the first quarter of 2022, the number of starts for data center construction projects was double the number for construction projects in general. The shift to digital transformation in the business world has caused dramatic growth in the need for data centers. As more collaboration and business functions take place online, companies need more computing capacity to host these applications and data storage. Considering this increased demand, data center owners must deliver despite current obstacles. 

Higher Costs

One of the most important issues data centers are facing is increased costs. For example, earlier this year, edge colocation operator DartPoints shared that an expansion project in one of their markets ran 14 percent over budget due to the increased cost of labor and components. The cost of raw materials has gone up considerably as well. Fortunately, the price of some materials like copper and steel has begun to fall, but they’re still relatively high compared to pre-pandemic prices. 


Due to many products being on backorder, projects are experiencing ongoing delays. According to DartPoints, their expansion project took five months longer than planned due to supply chain delays for generators, core networking equipment and smaller components.  Uninterruptible power supplies (UPS), switchgear, and panelboards are additional data center components that currently take significantly longer to procure than in the past.

Labor Shortages 

Labor shortages also continue to be a widespread problem. Construction crews struggle to maintain the crews they need to complete jobs in predictable fashion. As the demand for labor rises, so do labor costs, meaning labor shortages also affect the total cost of data center projects. 

Overcoming Supply Chain Challenges Through Modular Construction

The challenges are clear, but what’s the solution? In a word: prefabrication. Modular data centers and skids are a logical answer to supply chain issues for a variety of reasons:

More Predictable Costs

As we’ve seen, data center construction projects are experiencing budget challenges due to higher costs for raw materials, components and labor, as well as incurring the added costs of delays.

Companies require more predictable costs so they can budget effectively and avoid unanticipated costs. How does prefabrication help? The manufacturing process for MDCs and skids is far more efficient and easily controlled than on-site construction, where many trades must share the same space to complete the job. The efficiencies gained drive more controlled, predictable costs.

Budget planning is also easier when you are purchasing a fully integrated product versus managing a litany of costs for various parties, components and parts of a project. Plus, when you work with a reputable supplier like PCX, the entire project will adhere to strict quality processes and standards, avoiding issues in which poor performance from one party causes a domino effect of delays and added costs. 

Faster, More Reliable Timeline

The fact that MDCs are manufactured in a factory environment eliminates many of the delays that can affect traditional construction projects. 

Weather delays can significantly impact stick-built construction projects, but aren’t a factor for indoor manufacturing. Labor shortages are another factor you don’t have to worry about when you work with a manufacturing vendor that is well-staffed versus a construction company that is struggling to maintain a full-time crew.

Look for an MDC vendor with a solid track record of completing projects on time, barring factors outside their control (e.g., change orders).

Once an MDC or skid arrives on site, the simplicity of these fully integrated units accelerates deployment time. There are a few ways to reduce deployment time even more, such as starting planning early, procuring components in advance, and maintaining close communication with your vendor. Prefabrication is an excellent start for achieving faster deployment, but taking a proactive approach to the process also makes a significant difference.

Greater Flexibility to Find the Right Fit

Modular data center construction offers more flexibility to help you accomplish the goals of your project without having to deal with some of the headaches associated with stick-built projects. 

For one, modular units are scalable and allow you to deploy the capacity you need now. You don’t have to undertake a large data center construction project with a significant time and financial investment to future-proof your capacity. Right-size your capacity and build on a pay-as-you-grow model. 

Vendor-agnostic integrators like PCX also enable component sourcing based on preferences for cost and availability, among other factors. Should a certain supplier be experiencing delays or unexpected price hikes, you can work with your integrator to pivot to another component supplier to maintain cost and schedule commitments. 

Learn More About Modular Data Center Projects

Supply chain issues are top of mind for many in the data center industry. The good news is that by choosing prefabricated solutions like skids and MDCs, you can reduce the impact of typical supply chain woes. Want to learn more about how modular data center projects work? Check out our infographic, “What To Expect During a Modular Data Center Project”!


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