CNY or Chinese New Year is just nothing in United States. This holiday just passes by without being noticed by some of the Americans.
In continent China (and even in other countries that rejoice the holiday such as Indonesia, Vietnam, Malaysia, North Korea, Singapore, South Korea, and Brunei), the Chinese New Year holiday is a very big deal. It is like the Christmas season in the US, but longer, and with more opportunities to travel. All are closed and everyone goes home for few weeks.
The approaching Chinese New Year is on January 25, 2020, but the holiday stoppage can disturb manufacture periods at China’s manufacturing companies for as long as two months as most workers travel back to their rural villages to make merry with friends and family.
For those who rely on shipping and manufacturing businesses, the Chinese New Year shutdown is an occasion that we need to be alert and prepared for in ahead of time to avoid delays that could be terrible to our businesses.
Though you already experienced this, please note that CNY in 2020 is 11 days earlier than it was in 2019, so you’ll need to get even more ready for this occasion.
Chinese New Year 20120: How will it affect my business?
Even if the factory is just one step in your supply chain, the Chinese New Year shutdown will surely upset your business if you rely on manufacturers in China or any other countries that celebrate this holiday.
Paused Production
Chinese New Year is a public holiday in countries where it is celebrated. As this includes organization and production supervisors at the industrial unit, you may not be able to reach your suppliers during this time. All production will come to a stop until the holiday ends.
Reduced Product Quality
Eventually, everything gets back to normal. Hopefully. The sad truth is that many manufacturers have difficulty in getting back to normal operation after the celebration. The primary reason for this is workers may not come back at the same time, and sometimes not at all.
Depending on the number of workers departing in secret, it can cause severe disruptions across the supply chain. Factories must replace them quickly, which leads to lower quality and untrained staff working on production lines. As expected, when new workers are on the line, many products will not be produced properly.
This is one, of two reasons, why the risk of quality issues is at its peak right after the end of the Chinese New Year. Every trade takes its own time to master.
This is why you should never relax your quality assurance and inspection procedures. Unfortunately, that doesn’t necessarily mean the factory will re-run your order and, in some cases, they may ship the bad products along with the rest of your order. Ultimately, you may end up paying for a run of lower quality products without much recourse, especially if you need those products immediately.
This may include a backlog of orders from early December and onward, depending on the production time needed. This is stretching the suppliers’ capabilities to its maximum.
Shipping delays
Since the Chinese New Year shutdown is yearly, most businesses do their preparation by increasing their production in advance before the holiday begins. This results to an excess of shipments that need to be made just before the holiday. Some workers will be leaving early and fewer employees will last up to the CNY, there is still a chance your shipment could be delayed.
Chinese New Year shutdown 2020 timeline
Chinese New Year starts January 25, 2020, so suppliers will begin slowing down or stopping production a week or so before.
Early January: Stop production.
Mid-January: Employees will take their leaves.
January 24: All employees have left the factory.
January 25: Chinese New Year.
Early February: Employees start coming back to factories.
February 14: Most number of employees have returned.
February 21: Operations are almost back to normal.
Here are a few suggestions that will keep you ahead:
Plan ahead
Recheck your past sales, use them to forecast your inventory needs. If you miss planning, and you’ll end up panicking and probably overlook something crucial.
Rise inventory
Be over-prepared with all of your most widely held inventory, and stock up even on items that are less sales but have the potential to run out.
This is also applies to value and stock seasonal goods, mostly those associated with Valentine’s Day, Festivals, and Easter time. Manufacturers may take longer to work out the hooks and get back up to speed after the Chinese New Year, waiting until the holiday shutdown to order seasonal items may leave you in a difficulty.
It’s best to make sure that you don’t have shortage of essential stuff, and that the seasonal stuff arrives in time for its associated holiday.
Connect with your supplier
Since most suppliers in mainland China — especially if you found them through a investigated service like EzeeShip — have successfully gone through the Chinese New Year shutdown in the past, it’s best to talk with them openly about possible problems. Be warned that places like Hong Kong and Taiwan also do large shutdowns for CNY.
Talk to your supplier what possible delays may happen, then cooperate with them to find ways to effectively overcome those hindrances.
Consider other manufacturing locations
Even though other countries in Asia do take time holiday leaves for the new year (Vietnam’s Lunar New Year, or Tet Holiday, falls on the same day as Chinese New Year), none of them shut down as completely, some factories will have operations in some different countries. If you need inventory shipped and delivered on time during the Chinese New Year shutdown, consult your supplier if they can assign some of your production to another location.
Do not focus only to one production, there should be a backup. This saves you to Chinese New Year and a wise business choice.
Implement quality management
The Chinese New Year shutdown is seen by employees in China as an opportunity to change a job or switch careers and this is a problem to merchandisers. This may be an best timing to observe quality issues coming from your manufacturer.
Though the Chinese New Year shutdown can be a time of pressure for most of the businesses that rely on suppliers in China, it needs not to be. Just take the right foundation steps, your business will be alright through the Chinese New Year without a delay.
Need help with planning?
EzeeShip provides fulfillment services for brands of all sizes and has a variety of inventory forecasting tools and free technology that helps you prevent stockouts, identify trends, and predict demand.
Sign up with this link http://EzeeShip.com/login.html#/register?code=DD0 and discover how other merchandisers use EzeeShip to deal with seasonal order volume changes here or request a quote below and see if EzeeShip is a good fit for your business.
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