The world became a lot smarter about supply chains in the last three years. When the people of Los Angeles could look out their window and see the hundreds of ships waiting to unload at their ports, the importance of managing supply lines became a household conversation. Even my 7-year-old sighed and said, “Ugh, supply shortages again?!” when he saw an empty shelf where his cereal should have been.
While many industries have recovered from pandemic-related delays and backlogs, the data center industry still struggles to procure certain equipment. The recently published Uptime Institute Supply Chain Survey reported that 1-in-5 operators saw major delays or disruption to their procurement over the previous 18 months. Dave Young, Senior VP at DartPoints, shared that “power distribution and cooling infrastructure items remain challenging, where lead times are 3-4 months longer than traditional expectations.”
The data center industry is unique in its vulnerability to supply chain issues for two main reasons. One, which Uptime highlighted in their survey findings, is the industry’s reliance on interdependent global markets, making it susceptible to geopolitical turmoil, which is difficult to forecast. Second, data centers struggle with supply simply because of the size of the demand. Alan Howard, Principal Analyst at Omdia, estimates 26 million more square feet of capacity will come online in 2023 for the larger cloud and colocation service providers.
The fact that Accelsius was founded amid such supply chain turmoil drove the decision to make supply and procurement a central pillar of our business. Demonstrating that fact, the third hire for the Accelsius team was our Chief Supply Chain Officer, Matt Cruce, who came with years of experience at Dell, a long-respected performer when it comes to smart supply and procurement.
Accelsius’ has established a robust North American supply chain and US-based manufacturing model that will deliver reliable, predictable, high-quality liquid cooling solutions to our customers. Jason Lovelace, Accelsius’ Commodity Manager Consultant, lays out some of the key features and benefits of building and nurturing a North American-based supply chain.
Accelsius has committed to having 85-90% of Tier 1 vendors be based in North America — providing multiple significant benefits to customers
Speed of communication & collaboration
It’s not a novel concept, but at some point, the economy became too global, and relationships were lost. All we could do was type in all caps at a Chatbot and hope for some resolution. But building and working with local businesses helps us forge relationships that speed up communications and enable collaboration, often in-person.
Domestic economic benefits
Within our own hometown of Austin and throughout the country, we’ve built a business that will support other US-based businesses – helping to drive domestic economic growth.
Faster lead times
Having suppliers within your own region immediately reduces the supplier to factory lead times, therefore speeding factory to customer timelines. In contrast to a same-day delivery by a local vendor, a purchase from Asia can be 10 days by air, or 29 days by ocean freighter, not to mention various customs, broker and logistics delays often doubling and even tripling these lead times.
Reduced transportation costs & related impact on environment
Every year, container ships spew over 1 billion metric tons of carbon dioxide into the air, which accounts for 3% of all greenhouse gas emissions. This was considered a byproduct of globalization, but now there is pressure from regulatory and environmental agencies to reduce this figure. Keeping it local, sourcing from vendors that require shorter distances, and avoiding freight carriers will have a material impact on reducing carbon emissions.
Expediting becomes possible
No one wants to be in a situation where something needs to be expedited. But when you end up facing the unexpected, it’s good to know it’s possible. With close relationships and regional proximity, you can get products in a matter of days instead of weeks or months.
Flexibility
Local manufacturing, with components supplied by local vendors, allows for greater configuration flexibility, customization and design changes to meet dynamic data center cooling needs. Liquid cooling is an emerging technology in a world where no two data centers look the same. We expect customers to have special requests and needs. Our local and regional manufacturing base will be able to accommodate them.
Security
North American based supply and logistics dramatically reduces the risk and impact of geopolitical issues, such as war, new tariffs imposed and port strikes. These are all factors that are difficult to forecast and even harder to quickly mitigate once encountered. In addition, unwanted access to vital data center IT equipment is all but eliminated.
Traceability of raw components
The Accelsius model allows for much easier and more accurate raw component traceability – both for quality and sustainability reporting.
Quality Assurance
Going local enables data center, telecom and edge center operators to see where their materials originate and where they’re manufactured and tested. It enables a level of confidence in the quality of materials, design and manufacturing that is difficult when parts and materials are coming from various places around the globe. And unique to Accelsius, where possible, we are bringing the manufacturing in-house to our R&D Headquarters — examples include our Vaporator skiving and our manifold extrusions — making us unique as a direct-to-chip manufacturer. This provides us with even greater control over the quality of components, which is just one factor that makes our liquid cooling solution truly mission critical.
For all the reasons cited above, we are proud and excited to offer our customers a North American supply chain and US-based manufacturing model that will deliver reliable, predictable, high-quality liquid cooling solutions.
