The Data Center Supply Chain: Are There Benefits From End to End Supply Chain Management?

Last modified: June 5, 2015

Businesses around the globe have taken notice how implementation of supply chain management concepts can improve return on investment and benefit the company across a variety of functions. As society becomes more heavily involved in the world of the cloud and data transfer, the data center supply chain can benefit from the introduction of supply chain management concepts. These concepts range from selection of property location to speed of data access to average carbon footprint analysis, and each concept can provide a solution to an existing inefficiency within data centers.

Data Center Construction

In the onset of any supply chain every business must determine where it will function, and data centers are no exception to this rule. However, many financial stakeholders involved in the data center suply chain tend to think of highly industrialized areas as prime areas to build such a structure. Data centers serve one ultimate purpose: the transmission, storage, and provision of data applications, which include telecommunications, networking, research, server for consumers, and storage of data in cloud form.

Supply chain management concepts work to gather information about, analyze, make recommendations, and follow up on changes made to increase return on investment. These concepts can be applied to the introduction of any asset in the design and building of a data center within the data center supply chain. For example, the ventilation system needs to be designed to promote circulation throughout the center. Alternatively, the design team will need to make decisions based how to best orient servers to promote circulation and rapid cooling. Although these decisions represent areas where supply chain management concepts could assist in design and development, the same concepts to be applied to land purchases with the center. Land purchased in areas of intense economic development tend to be more expensive than other isolated lots, yet data centers have no real need for nearby industrialized areas aside from employee needs and utilities.  The use of supply chain management would include an analysis of potential site selections and how one site’s initial value will not experience depreciation over time. However, the selection must also take into extraneous factors, such as possible future invocation of imminent domain laws for public use of land.

Coordination of Activities

Chief Information Officers, or CIOs, are typically the personnel in greatest control of data center processes, with exceptions to site managers given alternate titles. As previously discussed, many different departments exist within the data center supply chain, and each department consists of team members responsible for ensuring each aspect of the data center operates at optimum levels. Unfortunately, this results in possible areas of communication breakdown, which reduces overall operating capacity. For example, one team identifies and corrects a problem, and another team experiences a seemingly unrelated problem. However, these two problems could be in symbiotic relationship where one problem is the direct result of another problem. Without analysis of communication and processes on an overall scale of the data center, the two problems may have continued to occur over time without ever being identified as related. This scenario could expand into any possible daily activity of data centers between IT departments and departments needed for the physical operation of the data center supply chain.

Energy Considerations

Society has grown intensely critical of corporations using excessive amounts of energy for production purposes, especially when such consumption does not align with eco-conscious efforts to reduce the carbon footprint. This goes back to the very nature of a data center supply chain—electronics and cooling systems. All electronics require the use of electricity to function, which is where the term actually comes from. However, electricity generation requires many other companies who may or may not be engaging in maximum efficiency processes. The question then becomes, “at which point will data centers take responsibility for their energy consumption rates?”

The solution to this problem rests within the initial construction or implementation of supply chain management concepts as data center supply chain needs evolve. For example, data centers could implement the use of other technological systems for enabling cooling of servers and interior areas or on-site production of electricity through the use of solar cells. Each kilowatt of power represents a kilowatt of power that has likely come from energy production through fossil fuels, and fossil fuels are a finite resource for attaining power. Supply chain management concepts could help data centers transmission into a new era of accessing renewable energy resources.

Additionally, data centers must take into account the amount of energy lost in power transfer to the data center from other energy production sites. As electricity travels through power lines, resistance builds up over distance, which results in lost energy. Although not currently in practice, supply chain management concepts could be applied to the creation of an alternate power grid to bring power directly to the data center through the use of superconductors. Overhead power lines resistance levels vary from 0.3 ohms per mile to higher amounts for large lines. However, some materials could radically change how society receives power. Ceramics have been known to lose all resistance when kept at super-cool temperatures, or otherwise near absolute zero (0 K). However, data centers would still have to find a way to achieve these temperature requirements. This is where supply chain management concepts could come into play through the analysis, building, training, execution, and review of functionality of such ideals.

Society demands more efficient businesses, and the world’s resources are becoming limited. Not only can the data center supply chain benefit from supply chain management concepts, but their future could very well depend upon them. Like all businesses, a data center relies on profits for investors, and inefficiencies led to financial losses. If inefficiencies are not addressed fast enough, data centers will simply become a shell of a once-technological society.

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