Building a Supply Chain for a Datacenter Operator with Integrated Energy Production from Recycled Natural Gas
The Challenge
Codex Energy, a datacenter and energy company based in Texas, USA, was aiming for rapid growth and required a steady, secure, and cost-effective supply of critical components, especially drycoolers in 500 KW and 1 MW variants. Initially, they relied on purchasing dry cooling systems from a wholesaler who sourced them in bulk from China and added significant margins. This approach inflated costs and limited their supply chain flexibility, prompting Codex to seek a more direct and efficient solution. With their internal team focused on engineering and developing the infrastructure, they needed external expertise to manage procurement, ensuring cost reductions and a reliable supply chain to support future growth.
Potential Consequences if Unresolved:
Without resolving these procurement challenges, Codex faced the risk of production delays, increased costs, and supply chain disruptions. This could hinder their growth trajectory and compromise their ability to deliver on investor and client commitments, ultimately threatening their market position.
The Solution
Codex Energy partnered with GetAhead, leveraging their expertise in emerging markets outside of China, to secure a reliable and cost-effective supply chain.
GetAhead’s solution for Codex involved:
1. Strategic Sourcing: Created a supplier bidders list spanning Southeast Asia, India, and China to ensure comprehensive coverage and benchmarking.
2. Rigorous Vetting Process: Collaborated closely with Codex’s lead engineers to filter and vetted suppliers, verifying production capabilities through local factory inspections.
3. Supplier Refinement: Organized several rounds of quote refinements, working to reduce lead times and costs, particularly with the Indian supplier, to match Chinese competitors.
4. Supplier Improvement Programs: Defined and monitored improvement initiatives with the selected Indian supplier to meet Codex’s specific production requirements.
Results
Through our strategic solution and execution on the ground in India, Codex Energy realized significant benefits, including the following key outcomes:
Cost Savings: Codex achieved a total cost reduction of more than 30% by sourcing directly from India, bypassing domestic wholesalers who predominantly sourced from China.
Enhanced Supply Security: By avoiding the increasingly contested South China Sea and sourcing from India, Codex mitigated the geopolitical risks associated with China. This shift ensured a safer and more reliable shipping route, while also securing a stable supply chain with comparable quality and logistics lead times.
Strategic Advantage: Sourcing from India helped Codex eliminate exposure to existing tariffs on Chinese-made products, with the added benefit of mitigating risks of potential tariff increases in the future.
