The global economy and supply chains have been facing an uphill battle for the last three years. The effects of COVID-19 and its accompanying restrictions, combined with the growing labor shortage and recession fears have contributed to the global economy’s uncertainty and unreliability. It will likely take supply chains years to return to any normal operating pattern, and the transformer industry hasn’t escaped any of these difficulties.
What’s Causing Transformer Supply Chain Delays?
Due to labor shortages, raw material shortages, and COVID policies, many companies have experienced serious delays in getting transformers. Sometimes it takes a full week even to receive a quote for a new transformer. Getting the actual transformer is another story altogether—lead times stretching out several months or even years have quickly become the norm, causing transformer supply chain delays across the country.
Transformer Material Shortages
One reason for these delays is material shortages. Goods like electrical grade steel, winding material, and other critical transformer components are now more expensive and jammed in a huge backlog. The scarcity of electrical grade steel has been further exacerbated by certain subsidies and incentives in the Inflation Reduction Act: the steel formerly available for transformer manufacturing is now being allocated to electric vehicle charging applications.
Utilities, electrical distributors, contractors, and project managers—who have ordinarily been able to operate with a build-to-order mentality—are now having to rethink their sourcing strategy. Starting your planning process early isn’t always enough anymore.
The ability to adapt and think resourcefully is more important than ever, and there is a growing focus on utilizing existing equipment in new ways. This is where remanufacturing enters the picture. With lead times on new built-to-order units getting longer by the day, remanufactured transformers have become the only solution for many end users.
“For many would-be purchasers of new transformers, the remanufactured option represents a new way of thinking. Remanufactured transformers are providing a reliable product while outmaneuvering and reducing the disruptions within the supply chain,” says Camden Spiller, CEO of Maddox Industrial Transformer.
The Importance of Remanufacturing Transformers
Here at Maddox, we’re big believers in recycling used and surplus transformers. The industry term for this is remanufacturing. Remanufacturing is a “comprehensive and rigorous industrial process by which a previously sold, leased, used, worn, or non-functional product or part is returned to a “like-new” or “better-than-new” condition, from both a quality and performance perspective, through a controlled, reproducible and sustainable process.”
The US is full of this kind of old infrastructure and industrial equipment like transformers. In previous years, it was cost-effective enough to just remove the old equipment and buy new stuff. But those days are gone. Instead, we should turn our attention to remanufacturing all those old or out-of-use transformers.
Here at Maddox, we find and upgrade the thousands of old transformers that are currently sitting unused in warehouses and equipment yards across North America.
Watch our video on how to find a transformer in 2023:
The Benefits of Transformer Remanufacturing:
The benefits of remanufacturing transformers are numerous. Consider a few of the following:
Speed
It’s quicker to remanufacture transformers than to build new ones. Want to beat supply chain delays? Buy remanufactured. While lead times on new, factory-built transformers are stretching out to more than 80 weeks, in-stock, remanufactured transformers can be made available as quickly as 1 to 4 weeks.
Availability
Remanufacturing old transformers increases the available stock of transformers that are ready to be deployed on the market. Moreover, purchasing remanufactured transformers relieves some of the stress on the supply chain. While recycling an electrically healthy transformer increases the availability of recycled materials for new products, it also increases the demand for the same product taken out of service, which now must be replaced. This cyclical manufacturing process can’t keep up with current industry demand. Utilizing remanufactured transformers reduces the overall product demand, which in turn brings relief to factories for the manufacture of new units.
Cost Savings
By increasing the supply of transformers, remanufacturing helps drive down the prices. Remanufactured transformers also cost less to fix and repair than to build a brand-new unit. In contrast to the inflated cost of new, factory-built units, remanufactured transformers offer a cost reduction between 10% and 40% for the same transformer.
Environmental Impact
The negative environmental impact of remanufacturing is far lower than building a new transformer. Remanufactured transformers lower the high energy consumption and greenhouse gas emissions associated with new material manufacturing.
Reliability
According to a study done by the Hartford Steam Boiler Inspection & Insurance Co., the second leading cause of transformer failure stems from design and manufacturing issues. Many such failures occur at initial energization. Purchasing a remanufactured unit, one with a proven track record in the field, provides an additional level of assurance for future reliability. In the same vein, the remanufacturing process includes identifying any previous design flaws and correcting any defects for longer service life. The warranty period for remanufactured transformers is also often longer than for new factory-built units.
Remanufacturing Transformers at Maddox
Many utilities, small corporations, and municipalities don’t find it cost-effective to repair and remanufacture their own transformers, so Maddox offers a complete solution for transformer refurbishment and repairs. Companies can buy remanufactured transformers directly from Maddox or send their older transformers to Maddox for repair, resulting in shorter lead times and a more efficient supply chain.
For instance, local and public utilities in Clark County, WA, send truckloads of damaged and old transformers to Maddox. Maddox then repairs these units and sends them back to these customers who redeploy them out in the field. This allows Clark County’s utility companies to cut costs and avoid delays by reusing their old equipment, instead of buying brand-new transformers.
How Maddox Remanufactures Transformers
Watch the process Maddox uses to remanufacture transformers:
Maddox Buys Surplus Transformers to Remanufacture
In addition to repairs, Maddox also buys old surplus transformers from companies that no longer need or want them. Utilities, demolition companies, or recyclers who are looking to get rid of their old units can sell their surplus transformers to Maddox for three to five times the scrap value. Maddox puts these transformers through an extensive remanufacturing and transformer testing process before they’re redeployed back into the supply chain. While new transformer manufacturing lead times in the US stand between 60 and 80 weeks, depending on market conditions, Maddox’s transformer remanufacturing lead times stand between 1 and 4 weeks.
Every time we can find and rebuild an old transformer, it means a project gets online that much quicker. That’s good for our workers, our economy, the global supply chain, and even the environment—everybody wins. We offer the best value for any new and used transformers, and we’ll even take care of all the logistics. You can sit back, relax, and know that you’re helping our nation keep the power on.
If you or anyone you know have old units sitting unused, we’d love to buy your surplus transformers from you.
