Tackling the Rising Complexity of Data Center Supply Chains
How Supply Chain Bottlenecks Threaten Data Center Construction – And How to Overcome Them.
The rapid expansion of the data center industry has pushed the relevant supply chains to their limits. According to McKinsey, global demand for data center capacity is projected to grow by 19-27% annually through 2030, requiring at least twice the data center capacity built since 2000 to be constructed in less than a quarter of the time. But while demand has surged, the data center construction supply chain has not scaled at the same rate, leading to widespread delays, cost overruns, and flawed execution.
Unlike traditional construction projects, data centers require specialized equipment, complex sequencing, and precise coordination. To make matters worse, data center supply chains are highly fragmented, with owner-operators juggling contracts for 20 to 30 separate vendors rather than relying on a single contractor. This makes scheduling and coordination even more challenging.
The result? A supply chain struggling to keep up with the pace of construction. Below, we will explore why supply chain performance is deteriorating, the key challenges that need to be addressed, and how advanced workflow tools – like Foresight’s project management platform – can help stakeholders coordinate, standardize, and scale their supply chains effectively.
The Strain on Data Center Supply Chains
1. Explosive Growth, Limited Scalability
The surge in data center construction is outpacing the industry’s ability to scale its supply chain effectively. With demand for AI-ready infrastructure driving significant annual increases in capacity needs, construction timelines have become increasingly compressed. However, the supply chain has not evolved at the same pace, leading to critical shortages, delays, and inefficiencies.
The specialized components required are part of the problem. From semiconductors and liquid cooling systems to electrical switchgear and power distribution units, these components have long lead times, and any disruption in procurement or installation can create a ripple effect across the entire project. For example:
• Semiconductor shortages continue to impact the availability of high-performance processors essential for AI-driven workloads.
• Electrical switchgear and transformers have some of the longest lead times in the industry, delaying power-up and commissioning.
• Cooling infrastructure is rapidly evolving, requiring teams to shift from air cooling to liquid cooling mid-construction, which can cause major redesigns and delays.
These bottlenecks don’t just affect procurement – they disrupt the entire construction sequence. If power and cooling systems aren’t delivered on time, fit-out work cannot proceed, leading to stalled projects and cost overruns.
To keep pace, data center projects need supply chains that are not just faster, but smarter. This means better forecasting, early risk detection, and a shift toward standardized designs and pre-approved components to streamline procurement and mitigate supply chain volatility.
2. Lack of Standardization is Hurting Performance
One of the biggest challenges in data center construction is the lack of standardization in design and procurement, which leads to inefficiencies, costly rework, and avoidable delays. Unlike other industries that rely on repeatable, modular designs, many data center projects often operate on a project-by-project basis, forcing teams to start from scratch each time.
This lack of standardization creates several critical issues:
• Mismatched Equipment and Design Changes: Data center components often have long lead times, but procurement frequently happens before final designs are completed. This leads to a common problem where equipment arrives that does not match the final design, forcing teams to either modify the design retroactively or retrofit the equipment on-site, triggering delays and costly workarounds.
• Inconsistent Procurement Processes: Without a centralized catalog of pre-approved components, each project goes through the same lengthy vendor selection and approval processes. This slows down procurement, increases costs, and introduces variability in quality and performance between projects.
• Overengineering Leads to Increased Complexity: In many cases, projects customize every detail, even when off-the-shelf, proven solutions could meet performance needs. This increases both costs and risk, as custom components typically require longer lead times and may have limited supplier availability.
Industry leaders are now shifting toward reference designs and standardized SKU catalogs to bring consistency to the supply chain. This approach ensures that all critical components align with pre-approved designs to prevent costly retrofits. It also reduces procurement delays by pre-selecting suppliers and streamlining the ordering process. Finally, it enables repeatability and scalability, allowing teams to optimize designs over time and apply past lessons learned.
By adopting a more standardized, modular approach, data center developers can significantly reduce supply chain inefficiencies and improve project execution speed. However, standardization alone is not enough – effective coordination across stakeholders is just as critical to avoiding bottlenecks.
3. Bottlenecks and Dependencies Create Chaos
The complexity of data center construction means that every phase of the project is interdependent. If one contractor falls behind, it can create a chain reaction of delays that ripple through the entire schedule. Unlike traditional construction projects, where a single contractor often oversees execution, data center projects rely on multiple contractors and suppliers working in parallel, making coordination far more challenging.
This complexity leads to several common bottlenecks:
• Supply Chain Blind Spots: Without a real-time view of supply chain activity, project teams often lack visibility into when critical materials will arrive on-site. This makes it difficult to plan installations effectively. For example, if a shipment of high-density cooling racks is delayed, MEP contractors may be forced to wait, leading to wasted labor hours and unplanned costs.
• Misaligned Scheduling Between Stakeholders: When contractors and subcontractors work off independent schedules, instead of aligning to a single master schedule, miscommunication and inefficiencies arise. A frequent issue is subcontractors arriving at the site before prerequisite work is completed, forcing them to either remain idle or leave, only to return later – creating additional mobilization costs and schedule slippage.
• Unplanned Rework Due to Equipment-Design Mismatches: Long lead times often mean that equipment is procured before final design approvals, leading to mismatches that require expensive workarounds once components arrive. This is particularly common with electrical and cooling systems, where power and thermal demands evolve rapidly, forcing mid-project adaptations that cause further disruptions.
To keep data center supply chains moving efficiently, project teams need better coordination, real-time oversight, and improved scheduling discipline. The best-performing teams are adopting:
• Integrated Master Schedules (IMS): A single, dynamic schedule that aligns all contractors and subcontractors to prevent misalignment.
• Supply Chain Tracking Systems: Digital tools that provide real-time visibility into lead times and material availability, enabling proactive adjustments.
• Early Coordination Workshops: Bringing together key stakeholders (owners, contractors, suppliers, and designers) before construction begins to align sequencing and identify dependencies before they cause issues.
By implementing these strategies, teams can reduce costly idle time, improve workforce efficiency, and prevent last-minute fire drills caused by misalignment.
4. The Supply Chain Forgetfulness Problem
One of the most overlooked challenges in data center construction is the recurring loss of critical project knowledge at each handover point. This phenomenon – often referred to as “catastrophic forgetting” – occurs when essential information is lost between project phases, leading to costly mistakes and rework. Knowledge is often lost in the handover between:
• Design to Procurement: Equipment orders are placed before final designs are locked, leading to mismatched components that require retrofits.
• Procurement to Construction: Site teams lack full visibility into lead times, causing delays when materials arrive late or unexpectedly.
• Construction to Operations: Facility management teams inherit incomplete or inaccurate records about installed infrastructure, making future upgrades and maintenance difficult.
To prevent costly information loss, construction teams must rethink how knowledge is captured, stored, and transferred between stakeholders. A centralized information management system can help by creating a structured repository for schedules, procurement records, and design changes, ensuring that key details are not lost during transitions.
How Foresight Solves These Supply Chain Challenges
The challenges facing data center supply chains – scalability constraints, lack of standardization, coordination bottlenecks, and knowledge loss – require more than just incremental improvements. They demand a systematic, data-driven approach to supply chain management. Foresight provides a workflow management solution that goes beyond traditional reporting tools, offering real-time visibility, automation, and structured collaboration to keep supply chains aligned and projects on track.
1. Enabling Scalability with Predictive Insights
As data center construction scales rapidly, traditional supply chains struggle to keep pace. Foresight identifies bottlenecks before they cause disruptions by leveraging real-time tracking and predictive analytics, for:
• Early risk detection: Predicts supply chain delays, enabling teams to adjust timelines proactively.
• Dynamic scheduling: Adapts procurement and construction sequences in real time based on actual site conditions.
• Integrated lead-time forecasting: Ensures long-lead items like switchgear and cooling systems are ordered in sync with evolving project needs.
By acting as a control tower, Foresight enables teams to anticipate and mitigate supply chain disruptions before they impact project schedules, ensuring that procurement and construction timelines remain aligned as data center demand continues to grow.
2. Driving Standardization with Better Supply Chain Visibility
Without standardization, data center projects face frequent design mismatches and procurement inefficiencies. While reference designs and SKU catalogs are best practices for improving consistency, their effectiveness depends on how well they are implemented and managed. Foresight supports standardization efforts by providing a centralized platform for tracking, sharing, and aligning procurement decisions with project needs.
• Improved visibility into pre-approved components: Ensures teams are working from a shared understanding of what’s available and approved.
• Seamless integration with procurement workflows: Helps teams align equipment orders with actual project schedules, reducing mismatches and delays.
• Historical performance tracking: Allows teams to analyze past project outcomes to refine and improve procurement and standardization strategies over time.
Again, by acting as a control tower, Foresight ensures that reference designs and SKU catalogs – when used – are effectively applied across the supply chain, minimizing inefficiencies caused by inconsistent procurement decisions.
3. Eliminating Bottlenecks with Coordinated Workflows
Poor coordination between contractors and suppliers creates misalignments that stall construction. Foresight’s workflow management system keeps all stakeholders aligned to a single, live master schedule, ensuring smooth handovers and reducing idle time.
• Integrated Master Schedule (IMS): Keeps all contractors and suppliers on a shared timeline, minimizing sequencing conflicts.
• Kanban-style task assignments: Assigns clear responsibilities for procurement, delivery, and installation tasks.
• Real-time collaboration tools: Ensures subcontractors and suppliers adjust their schedules dynamically based on project needs.
Foresight keeps all stakeholders connected to a single, live schedule, reducing sequencing conflicts and ensuring that contractors, suppliers, and subcontractors can adapt dynamically to evolving project needs.
4. Retaining Institutional Knowledge & Preventing Supply Chain Forgetfulness
At every project handover, crucial information is lost, leading to repeated mistakes and unnecessary rework. Foresight acts as an organizational memory system, ensuring that critical knowledge is retained and easily accessible.
• Centralized project data repository: Stores procurement records, change logs, and supplier performance insights for future projects.
• Automated knowledge capture: Logs lessons learned from past delays and bottlenecks, making them available for proactive decision-making.
• Cross-phase continuity: Ensures that design, procurement, construction, and operations teams share the same up-to-date information.
Foresight captures and retains critical project data, allowing teams to access lessons learned, track dependencies across project phases, and reduce costly mistakes caused by missing or outdated information.
A Smarter Approach to Data Center Supply Chains
The rapid growth of data center construction has placed unprecedented strain on supply chains, creating new challenges that demand urgent attention. Some of the most critical include:
• Supply chain growth has not kept pace with the explosive demand for AI-ready infrastructure.
• Fragmentation and poor scheduling are leading to widespread delays and costly rework.
• Critical knowledge is being lost at every project handover, compounding inefficiencies.
By addressing these core challenges in a single, integrated platform, Foresight enables faster, more efficient data center construction, reducing supply chain risks while improving overall project performance.
This is where Foresight’s project management platform makes the difference – acting as a control tower for the entire supply chain, ensuring that information flows smoothly, bottlenecks are identified early, and teams stay aligned throughout the project lifecycle.
Our blog series on data center supply chain challenges continues with a deeper look at handover issues and “catastrophic forgetfulness”, exploring how better coordination and information continuity can further optimize project execution and long-term performance.
