We have a money problem – the entire planet does.
With energy costs soaring, raw materials running out, and international political unrest, we are all starting to worry a little more about money regardless of whether it is on a personal level, or an industrial one.
The data center industry is, according to Panduit’s Michael Akinla, no different.
During a DCD>Talk, we discussed the current obstacles facing the industry, and what Panduit’s response to this is.
“We are constantly scratching our heads about the material price increases,” said Akinla. “They're driving us crazy, they're driving our customers crazy, and it's a bit of a pain, to be honest.”
“We've seen copper prices go up by 65 percent, steel prices are up 45 percent, and resin is up by 45 percent. Even packaging, the dreaded packaging, which everybody's trying to cut down on, the price is up by 30 percent.”
But it isn’t only the physical materials that are causing problems.
“Then there is the problem of freight costs, which are up somewhere between 50 and 800 percent.
“Before the pandemic, [it cost] something like $2,000 for a big 60,000 ft container. That went up to $20,000, and has now come back to around $11,000 to $13,000.”
These numbers are extortionate and frankly pose a pretty serious problem for many companies. But in the context of inflation and a world recovering from a global pandemic, there is but one choice: find a way to deal with it.
Panduit is in the somewhat fortunate position that although these increased costs are a pain, they have been able to work with them, and even work around them to the benefit of their customers.
Akinla told DCD about Panduit’s CPOF process – ‘configure price to order figure,’ and how this has enabled the company to stay ahead of the supply chain issues.
“We look at the bill of materials, we look at the items that are the key to them, the high core count fiber sets, and the PDUs – and we all know PDUs are struggling in terms of lead times at the moment because of the chipsets.
“What we're able to do with that CPOF process is forward order. So, with our key customers, in order to ensure that they meet the delivery times, we will look at those and say, right, you're looking to deploy this in the next two to three months. We will order the raw materials for these chipsets, and you don't have to worry about giving us a PO if we're working in partnership.”
By doing this, Panduit is able to work ahead of the game, ensuring that customers get what they need, at the time they need it, regardless of what type of deployment they are looking to do. In the long term, as an industry, we can only hope that costs will eventually begin to decrease, and the supply/demand distribution become more manageable.