Chinese New Year, also referred to as CNY, begins on the 25th of January 2020 and officially lasts one week. However, you should plan to be effected for more like 3 weeks due to time allowance given for employees to travel home and back.
While your business may not be based in China, part of your business process, particularly sourcing components or raw materials, may take place there or go through it. That’s why taking the largest yearly Chinese celebration into consideration is definitely a smart move. So what are the main things you need to be cognizant of during this time?
Understanding the holiday
While it’s only scheduled to be a one-week long event, it often runs into 3 to 4 weeks of factory shut downtime. During this time, essentially nothing will be going in or out of China, and your components or raw materials are no different.
CNY is also typically the biggest time for job resignation and relocation. Employees that were previously working for your manufacturer may decide not to return after the celebration. You can’t be certain exactly how many jobs will be left open. Therefore, you won’t know exactly how long your production will be delayed until after the holiday.
So, like all good strategies, you’ve got to plan for before and after the event. Pre-plan and think about quantities that are needed. Additionally, make sure you think about the potential delays that may occur in the weeks/months following CNY. Remember, you can never be too prepared.
Strengthening Relationships
Having a good partnership will allow you to gain a better understanding of exactly what they need from you and when in preparation for CNY. You can also find out what measures they have in place to accommodate the holiday. However, it may be difficult for you to build a relationship right now. That’s because they will have their heads down trying to ensure everything is running smoothly in their preparations. However, this is something for you to keep in mind in preparation for next years CNY.
It is also important to be aware that quality may begin to suffer in the lead up to CNY. This again is where having a strong relationship with your manufacturer will come in handy. Having trust in your supplier to continually deliver excellent quality products will help ease some of the stress that CNY is likely to bring.
On a side note, if you are in the market for a new Chinese supplier or manufacturer, make sure you ascertain their ability to handle CNY before signing any contracts. You don’t want to end up with a company notorious for going off the grid completely during this time and leaving you in a panic.
Think Ahead, Plan Ahead, Order Ahead
One of the best ways to start planning ahead for Chinese New Year is by creating a forecast for the months you know will be affected and then a few after.
- Forecast as accurately as possible how much product you’re going to need during the time the factories will be closed.
- Be able to give your suppliers and manufacturers accurate numbers of what you are going to need and they can plan accordingly.
- Consider using a company that has factories in several different countries so CNY isn’t the be-all and end-all for you during this time.
- Increase your inventory beforehand so if there are any slip-ups or your shipments don’t make it onto their scheduled ships and vessels, you’re not in deep trouble.
To give you a clearer image, most shipping containers coming from China to the U.K. can take anywhere between 20-40 days to arrive. In addition, electronic components, for example, can have typical lead times of 3-12 weeks, sometimes 20+ weeks. That’s why planning according to your industry is crucial.
10 Days Pre Shipment
Whether you’re shipping stock to or from China, we advise getting your products to the ports at least 10 days before they’re due to be shipped out. This is because in the lead up to this holiday period, there is going to be a race to get cargo loaded onto the ships before final shipments. Shipping companies are known for taking advantage of the Chinese New Year. They raise prices and making it into a bit of a bidding war as to who gets their products shipped first. The last thing you want is your cargo to get bumped onto the next departing ship. This may leave your orders delayed by potentially weeks or months.
Chinese New Years is quickly approaching so if any of your production happens in China, it’s best that you get planning sooner rather than later. If you have any questions about the Chinese New Year impact on suppliers or manufacturers, give us a call at 0115 772 2825.