Transformers have a very long lead time and can create huge production losses. Approaching this fact, 5 Finnish energy companies have found a way to lower this risk with shared expenses.

These Finnish companies have bought a transformer. They have also bought some substation spares that have long lead times. They have an external company that is storing these spares, and the external company also has the competence to replace transformers and substation spares.

If any of these energy companies would need the transformer, it will be replaced quickly, and a new transformer will be ordered and on its’ way.

In meetings with energy companies considering joining O2O SPARES, we had the question: What if two companies needed a new transformer at the same time? In that case, the first one who acquired it will have the transformer and be able to avoid huge production losses. The second one to acquire it will be in the situation they would be in without this collaboration. Nevertheless, it is very unlikely that two companies would have this need on the same day. As a new transformer is ordered directly when exchanged, the possible production losses for the next company that will need one will start to decrease by each day.

To significantly reduce risks and shared costs

At O2O SPARES, we can apply the same logic but with a much number of collaborators. It is not unusual that only once you have ordered a transformer will they start to produce it. The lead time for a transformer can then be up to one year. A couple of weeks of container shipping would not have such a big impact on the business case, considering this lead time.

This allows us to include a much higher number of energy companies and have more transformers in stock.

Including more energy companies will significantly reduce risks and shared costs.