Hospitals hit by supply chain backlogs for transformers

The long-discussed issue of aging equipment throughout the country’s power grid has come to include transformers, through which more than 90% of the electricity consumed in the United States passes. The average age of large transformers in the U.S. today is about 40 years, which also happens to be the generally accepted average of a transformer’s operational life. And with the supply chain upheavals of the last three years, this already precarious state of the nation’s transformer problems has only been exacerbated.

 According to the Department of Energy, the primary drivers are pandemic-driven raw material shortages and supply chain disruptions. The Commerce Department has identified the situation as a threat to the national grid and security and specified 16 critical sectors threatened by the transformer shortage, including hospitals. The issue is so heightened that a consortium of associations from the building, contracting and electrical industries were compelled to write to the White House about their concerns in October 2022, which incuded delayed deliveries of electrical components to hospitals.

Industry professionals are indeed reporting longer lead times than usual to get transformers. Jim Templeton, a third-party consultant to POWER Engineers with 40-plus years in the industry and his own consulting firm, JB Templeton Consulting LLC, says an aging power grid and ongoing supply chain issues are mixing in disruptive ways.

 “I deal with a number of different clients on the utility side, and about a year ago we started to see lead times from transformer manufacturers creep up,” he says. “Before the pandemic, you could get a large transformer ordered in less than a year. Today that is rare. A relatively large manufacturer in the U.S. was at about 38 months. That used to be 38 weeks.” 

There is a trickle effect that goes beyond simply having an adequate supply of working, reliable transformers in place.

“Construction projects with health care organizations can no longer depend on just-in-time delivery of materials because manufacturers are not stocking those materials anymore,” says Richie Stever, vice president of real estate and construction for the University of Maryland Medical System. “Organizations are coping with shortages by extending construction schedules, paying for expedited delivery, delaying projects and switching suppliers based on their delivery dates, which then often requires revising and refining design documents.”

Vendors are far from hopeful, themselves.

“We’ve experienced lead time issues across a wide spectrum of products, which normally are in stock and ready for next-day delivery, but are now pushed back by several weeks, or even months,” says Joe Wheeler, vice president health care at Inglett & Stubbs, an electrical contracting firm in Mabelton, Ga. “Large equipment such as utility transformers, generators and switchgear, which normally take three or four months to deliver, has been pushed to well over a year, sometimes even two.”

So, until the situation is corrected what are the options for health care organizations and the vendors who supply them?

“Organizations can protect against shortages by releasing equipment with long lead times as early as the design development phase,” says Stever. “Organizations could also consider custom manufacturers and stalling construction until all the major components arrive, even though delayed starts can drive labor and material costs upward. Prices in the construction industry have been relatively stable over the last 20 years, but COVID-19 and other global developments have created instability resulting in unprecedented escalation.”

Open, honest and ongoing communication are the bedrock of any relationship, including health care organizations and their business partners.

“Each situation is unique. However, open communication has been the key to problem-solving,” says Wheeler. “We have been very transparent and work with our customers’ entire design and construction teams to try and solve scheduling issues. For the time being, without the equipment, some of the issues are just not resolvable and so schedules must be extended. Again, clear and early communication is key for the entire team to work together and react to developments in such a way that the needs and expectations of all stakeholders are addressed and resolved.”