Modularisation in data centre development must begin with the supply chain

As the demand for data centres continues to rise, fuelled by the unabating appetite for cloud storage and the exponential rise in the use of AI, supply chains have had to adapt and expand. While lead times for important data centre equipment have come down from their peak, and the supply chain has opened to greater competition, any additional capacity among manufacturers is quickly absorbed by the high demand.

Across Europe, the availability of skilled labour and qualified contractors for data centre construction remains under significant strain. The surge in demand has outpaced the supply of experienced tradespeople, particularly in mechanical, electrical, and commissioning roles. This labour shortage is now a critical factor in site selection and project planning, with developers prioritising locations that offer stronger talent pools.

The limited number of contractors capable of managing complex builds is driving up costs and extending timelines, as firms struggle to adapt to evolving technical requirements and regulatory pressures. As a result, labour and contractor availability has become one of the most pressing challenges in the UK and European data centre market.

Prefabricated components, skids and assemblies can accelerate projects, reduce their cost and be scaled across portfolios

Addressing these challenges requires the industry to evolve beyond the constraints of traditional delivery and procurement methods, which, while well-established, can sometimes lack the agility needed to limit delays and manage costs effectively. One of the most effective solutions to this quandary is to embed modularisation within the design and delivery of data centres. Prefabricated components, skids and assemblies can accelerate projects, reduce their cost and be scaled across portfolios.

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For modularisation to achieve its full potential, it must be treated as a supply chain strategy rather than an isolated construction innovation. It must be designed, integrated and managed from the very start of a programme of works. It should also be treated as a strategic enabler which helps shape specifications, aligns timelines and ensures the optimum sequencing, quality and cost.

Modularisation reconfigures how a project gets delivered. It moves work off-site into controlled factory settings, where precision manufacturing and parallel workflows can unlock substantial efficiency gains including minimising labour costs, reducing waste and providing economies of scale. It also creates safer working conditions, improves quality assurance and supports sustainability by reducing waste, as well as overall transport and site emissions.

Factory-built elements reduce reliance on site labour, provide greater predictability and accelerate delivery

These bring benefits to all parties. Factory-built elements reduce reliance on site labour, provide greater predictability and accelerate delivery. Investors see their returns more quickly, while developers benefit from a higher asset value and fewer problems after completion.

The real transformation lies in a mindset shift, one that reimagines the supply chain not as a downstream function, but as a strategic partner in design and delivery. Embracing this shift means moving away from traditional site-centric visibility and placing greater trust in a more integrated, often less visible, supply chain.

While this may feel unfamiliar to some developers, early engagement is key as it opens the door to deeper collaboration, enhanced transparency, and stronger partnerships.

When manufacturers are confident of long-term demand and can work to repeatable, scalable design, we see better integration, lower risk and higher value for all stakeholders. This proactive approach not only improves outcomes, but unlocks the full potential of modularisation. Thus making costs are more predictable, schedules tighter and overall quality improvements.

Digital tools such as BIM and shared planning platforms can support this process – improving visibility, streamlining coordination and enabling just-in-time delivery of complex components. It also strengthens the case for digital risk monitoring, which supports this new way of working.

Projects can be replicated or expanded using proven components and modules can be swapped or adapted to meet changing needs

As demand for data centres continues to grow, modularisation provides a means to scale. Projects can be replicated or expanded using proven components and modules can be swapped or adapted to meet changing needs. Off-site construction and assembly reduces reliance on volatile labour markets and lowers workers’ exposure to weather, heights and heavy machinery.

Modular construction can transform the way data centres are built and the sustainability and efficiency benefits are clear. However, it must not be treated as a bolt-on solution to current challenges. Instead it needs to be embraced as a supply chain strategy from the outset. Then it becomes a powerful tool for accelerating delivery, managing risk and creating long-term value.

Derek McNamara is vice-president, global supply chain management at Linesight