Rational uses partial-assembly tactic to beat chip shortages and bridge long shipping times

Rational dispatch centre, Landsberg am Lech, Germany

Rational has detailed the unprecedented measures it has taken to counter supply chain pressures – including dispatching partially-assembled ovens for local completion to bridge longer shipping times.

Global supply bottlenecks posed a major challenge for the business last year, with the situation worsening progressively from September, especially for electronic components.

With the company’s order book reaching record highs, it was forced to quote longer delivery times which impacted on its year-end sales growth.

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Dr Peter Stadelmann, CEO of Rational, said that to keep supply chains and production running as far as possible and to return delivery times to its customary level, some of the production output was completed without missing components and then dispatched to an overseas warehouse.

“By dispatching partially assembled appliances, we are bridging the long shipping times on the  freight routes,” he explained. “The electronic components will follow by air as soon as they are available. The appliances will then be finished by local engineers on site.”

Mr Stadelmann said that Rational expects volatility in materials procurement to persist in 2022, but insisted the company would be able to overcome these challenges by taking timely countermeasures, such as the qualification of additional suppliers.

Operators have seen the knock-on effect of supply chain issues on pricing, with Rational following other equipment suppliers by increasing prices as a result of the turbulence.

New prices have applied in overseas markets since November 2021, while in some markets in Europe they are only due to come into effect in April 2022.

“We don’t normally increase prices across the board, but rather locally in special situations,” said Mr Stadelmann.

“However, due to the considerable cost increases for commodities, primary products and logistics, we felt compelled to raise our price levels by an average of 6% worldwide.”

Although supply bottlenecks for electronic components prevented Rational from being able to meet high customer demand in full during 2021, it still ended the year with positive numbers.

Annual sales increased 20% year-on-year to €780m (£657m) due to encouraging demand for the new iCombi and iVario, catch-up investments, government support programmes and orders brought forward in anticipation of shortages of materials.

Mr Stadelmann said that the business had started 2022 with an “unprecedented level of orders” on hand.

Rational breaks new order records despite ‘tense’ supply bottleneck

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Andrew Seymour

The author Andrew Seymour

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