Supply chains have been a fraught issue for some time, but Kirby has masterminded the new normal with aplomb. Kirby’s Sean Rapple tells DCD how they’ve done it.
DCD Opinions speak to Sean Rapple, Kirby Group Engineering.
When DCD talked to Kirby procurement specialist David Waldron in mid-2022, the supply chain issues that had been assailing the data center sector since well before Covid were arguably more acute than ever.
As a contractor, Waldron pointed out that Kirby keeps a closer eye on supply chains than most organizations; from availability, distribution and all the way through exchange rates back, even, to the key commodities that go into the infrastructure that Kirby installs. Those commodities include steel, copper and aluminium.
In other words, there’s a whole lot more that gets busbars, cabling, cabinets and more into data centers on time and at the budgeted cost than simply clicking a tick box on a website and paying the invoice when it arrives.
After all, even when products come with ‘Made in the USA’ or ‘Made in Ireland’ stamped on the box, the product inside may have been made from parts from all over the world, and any issues in Singapore, the Taiwan Strait, the Suez canal – or any number of unforeseen circumstances for that matter – could cause big problems.
“A European multi-billion-euro manufacturer might have a European factory and European design, but their sub-assemblies would typically be made in China, and delivery times this year have got exponentially longer,” Waldron told DCD.
The uncertainty caused by semiconductor supply problems, Covid lockdowns and the subsequent burst in global inflation meant that quotes that might once have been valid for 28 days – or longer – might only be valid for a day or two, he added. “This is something we’ve never seen before, but it is because everyone is operating on such high levels of uncertainty,” he told DCD.
Fifteen months later, Sean Rapple, director, pre-construction, at Kirby spoke to DCD’s Gabriella Gillett-Perez at this year’s DCD>London about how Kirby navigates complex supply chains today.
“Some people might think these supply chain challenges have gone away after Covid, but obviously we’re still dealing with the legacy. We’re still seeing challenges on projects with components and accessories for complex specialist equipment in short supply and, not only that, the war in Ukraine has also affected the situation.”
As pre-construction director for Kirby, Rapple sees everything coming in at tender stage and therefore has a commanding view of all the supply chain issues affecting the industry, at least in terms of the electrical and mechanical equipment that data center operators need.
“We’re finding that lead times, in particular, associated with certain components are given at a certain time during the bid process and then, when the ‘rubber hits the road’, things drift for one reason or another.
“So the biggest issue now, post-Covid, is the shortage of components because there were huge effects with the raw materials – steel, copper and aluminium – that go in. While everyone thinks that everything is back in full production I think we’re still playing catch-up,” he said.
After all, Ukraine was a big producer of steel before the invasion.
“That’s the disruption side of it. In terms of effects, delivery has also been affected, as well as the engineering of specialist components, and if the equipment isn’t manufactured or is not available, then you have to change tack and change the design.”
We’re still seeing challenges on projects with components and accessories for complex specialist equipment in short supply and, not only that, the war in Ukraine has also affected the situation
The other issue is stock, he continued. Before Covid, Kirby’s suppliers would always have off-the-shelf options for parts, but those stocks are now vastly depleted, said Rapple. “That means you’ve got to factor that in, too, with everything you do, especially in planning.”
That means that even the smallest components that just a few years ago could be ordered from stock, need to be ordered and delivered earlier. “The knock-on effect of this is that at the construction site we need more on-site storage, we need more off-site storage, as well, and delivery can become congested.”
That said, many of the larger items remain distressed in terms of supply, added Rapple – transformers, generators and switchgear. A lot of suppliers are struggling to meet delivery dates. “We do as much forward planning as possible to mitigate that,” he said. Invariably, that means making decisions much earlier in the build process and storing goods if, happily, they come in early.
Rapple went on to advise how organizations can better manage their supply chains and mitigate the manifold supply-chain risks in an increasingly uncertain world.
To learn more about how Kirby manages its supply chain and how it mitigates the risk of disruption, as well as advice on better supply chain management, check out the DCD>Talks video interview on the Data Center Construction Channel.