Chinese New Year, recognized as the Spring Festival, is an occasion observed not only in China but across various Asian nations. This festive period is a time for family, joyous celebrations, and travel. Yet, for enterprises dependent on imports from China, navigating the Chinese New Year presents a unique set of challenges, with potential delays and disruptions in the supply chain.
Production slows down, operations are limited, schedules get disrupted, and transportation gets delayed, thus leading to significant supply chain disruptions. Let’s explore these disruptions further.
Many manufacturing facilities, particularly in China and other East Asian countries, shut down for an extended period.
This year, Chinese New Year falls on February 10th, which means that production will come to a halt 1-2 weeks before and after the celebration. So brace for a production hiatus from January 28th to February 26th. As factories wind down, the importance of gearing up for upcoming seasonal events like Easter and early Spring becomes even more important.
As the Lunar New Year approaches, it's customary for the majority of China's workforce to take a well-deserved break. This results in a collective pause from work for 1-2 weeks during the new year, causing a temporary dip in staffing levels and the potential for labour shortages at key ports.
We at Portless, experience a smoother transition through the Chinese New Year than other businesses. Given that carriers in China typically observe a shutdown period of up to 5 days during the festive season, we adapt our operations to mitigate any potential disruptions. Similar to local carriers, our fulfillment centre will only be closed for 5 days but will rebound to our usual capacity immediately after Chinese New Year.
As factories close for the holiday, a backlog of orders can build up that await shipping when production revs up again. Brace for a peak in shipping demands, triggering delays and a temporary uptick in shipping expenses.
Navigation through the Chinese New Year hinges on planning. Start your approach by understanding the holiday schedule and how it affects your supply chain. Given that the Chinese New Year doesn't follow a fixed date, early planning is key.
Work with your suppliers to plan production and shipping schedules. It might even be beneficial to consider placing orders earlier than your usual timelines to guarantee production and shipment completion before the holiday period.
Examine previous customer behaviours and historical order patterns throughout the Lunar New Year season. This will serve as a compass for your inventory planning, allowing you to forecast demand accurately and prepare additional stock.
Gear up for Chinese New Year by ensuring your shelves are brimming with top-performing favourites and seasonal products. Prioritize stocking up on your best-selling items to fortify your inventory and alleviate any strain on your suppliers post-Chinese New Year.
As factories wind down, the importance of gearing up for upcoming seasonal events like Easter and early Spring becomes even more important. This year, Good Friday is on March 29th, making it essential to arrange for the shipment of your Easter and early Spring products well in advance of the Chinese New Year break. Stay ahead in the game by strategizing your inventory to meet the demands of the season seamlessly.
Through preparation, challenges arising from factory closures during the Chinese New Year can be averted. If you need help with strategic planning, reach out to us today.