From transaction to trust, with supply chain partners

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Most of us have heard the phrase “supply chain disruption” a few times too many in recent years. An extreme weather event or material shortage in one corner of the earth can ripple through thousands of global businesses, causing major delays. As the CEO of a company that builds data centers for some of the biggest technology providers in the world, it’s a concept I’m all too familiar with. It’s also one I refuse to accept as blanket reality. 

Truth is that many supply chain disruptions are born out of the transactional nature of supplier-business partnerships. Companies over-rotate on getting the lowest prices for materials and components, and in the process they miss an opportunity to pursue high quality, collaborative relationships with suppliers. 

My company set out to reimagine the supply chain a few years ago. We wanted to make our supply chain flexible, resilient, and a powerful source of innovation. The benefits have been countless: better utilization, faster timelines, lower total cost, new product and service models, and partners to help us thrive in a rapidly growing and changing industry.  

So how did we get here? We reframed the relationship and changed how we get the job done. We don’t have a procurement function; we have an innovation function. This way of thinking and working was a natural extension of already strong, decade-long relationships.

Anything but transactional

The bottom line is, we treat suppliers like partners.

Recognizing that no one is immune to supply chain disruptions, in 2021, we started meeting with our suppliers more frequently, at least weekly. These meetings gave us a chance to ask questions, better understand the issues, and avoid surprises. 

That transparency goes in all directions. We also meet with our customers frequently, relaying updates on potential issues. We take an all-hands-on-deck approach to keeping available materials in the pipeline, so projects stay on track. This transparency means we can find ways to mitigate the impact of supply chain disruptions in real time.

According to McKinsey, companies that regularly collaborate with suppliers see higher growth, lower operating costs, and better profitability than peers. That makes a lot of sense. The collaboration that has come from our supply chain has certainly paid dividends. 

Problem solving with partners is a two-way street

As data center development skyrocketed at the beginning of the decade, our partner Schneider Electric, who provides prefabricated power modules for data centers, needed to expand its footprint and bring additional integration facilities online…and fast.

We invited them to be our neighbor. We had land, power, and the ability to build the type of facility they needed. Schneider could expand without taking on too much risk and didn’t need to start from scratch to find land, secure power, and develop building plans. Now, Schneider can integrate our power centers and test our uninterruptible power supplies close to our campus.

This collaborative approach resulted in faster delivery times and improved efficiency across the board. There was so much trust between our two companies, it guaranteed that we were working toward a common goal and making us better able to weather the inevitable challenges.

Intimacy might be the mother of invention

Close partnerships with suppliers also allow you to respond to market forces faster.

Because of our close ties with Vertiv, we shaved months off the timeline to develop a new cooling system to meet the requirements of AI. Our customers were eager to adopt AI quickly, but not ready to say goodbye to traditional CPUs nor go down the high-cost path of a data center redesign or retrofit. To solve the challenge, we had to think “inside the box” and figure out how to adapt liquid cooling within our existing footprint. Retrofitting and re-engineering the buildings wasn’t an option from a cost and timeline perspective.

The result was a system that allowed deployments of AI to flex between air and liquid cooling, achieving the flexibility and energy efficiency our clients required while supporting the high-density computing needed for AI. Our engineers collaborated with Vertiv’s on this solution, and the initial units are already being deployed. With today’s breakneck pace of AI innovation and adoption, this level of close collaboration was absolutely critical to meeting customer demand.

One thing I know for sure: The supply chain can always improve. It can always be more flexible, more efficient, more resilient. Who knows where else we’ll go with these partners, but knowing we share a continuous improvement mindset means every time there’s a problem, we’ll roll up our sleeves and figure it out. Temporary challenges always become long-term advantages if you use them to discover better ways of doing things. 

A closely-coupled supply chain is the future

Transforming the supply chain takes time, significant effort, and most importantly, mutual trust. Coming together with your suppliers can create transparency. It can also create a continuous improvement mindset. With flexible approaches, you tackle challenges and innovate together. You create relationships that become your competitive differentiator and are valued from the C-suite all the way to the field. That’s what a closely-coupled supply chain means to me, and I wouldn’t have it any other way.

Chris Crosby is CEO of Compass Datacenters.

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