Supply Chain Managers Should Now Prepare for Chinese New Year
There is no time to waste if you haven’t already started to plan for this year.
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Here it comes again…are you ready for the chaos of Chinese New Year? The New Year celebrations actually last for two weeks and begin ramping up before Feb 16. There is no time to waste if you haven’t already started to plan for this year.
Here’s a handy list of things to make sure you do to prepare your supply chain for CNY 2018.
- Order enough product to cover the 2-4 week factory shut down. Don’t wait until the last minute to place your orders. This is the only holiday per year when workers go home, often to see their parents and their children. Once at home, they like to stay a while. The factory is going to be closed during this time.
- The final production runs before the shut downs are always rushed and as a result, there are almost always quality issues. Verify your production schedule and keep close tabs on progress. Be prepared to double check for quality issues with your orders.
- Keep in mind that 30% of the workers, including those with experience making your product will NOT return after the new year. You are going to have to plan for new learning curves for new workers and quality issues that result from lack of experience. Watch out!
- Plan to keep close oversight on production for the rest of February, March and April, until production is back in full swing and quality is back to expected levels. There is no substitute for strong oversight of your supply chains.
- Add staff for incoming inspection. You will need to double check the final shipments produced just before CNY, when workers are distracted and anxious to leave for the holiday. You also need to double check quality on shipments manufactured for the 4-6 weeks after CNY as new workers learn your processes.
- Asian manufacturers that have a lot of rush orders just before the holiday, may farm out some of their production to subcontractors. Be sure to check on the factory to make sure this isn’t the case with your products. If you cannot go to China yourself, hire someone from Hong Kong to visit the factory on your behalf.
- Be sure to check incoming raw materials from your factory suppliers. At this time of year, factories may get sub-standard parts from their raw material and parts suppliers and not notice, or they just decide to use the parts anyway.
- Be prepared to spend a premium for containers, transportation, and expediting. Logistics providers charge premiums just before CNY as so many companies rush to get their inventory on planes and ships. Book ahead of time to ensure your products can be shipped.
The key to handling the chaos of Chinese New Year is planning ahead and being prepared. Happy 2018, the Year of the Dog.
About the AuthorRosemary Coates Ms. Coates is the Executive Director of the Reshoring Institute and the President of Blue Silk Consulting, a Global Supply Chain consulting firm. She is a best-selling author of: 42 Rules for Sourcing and Manufacturing in China and Legal Blacksmith - How to Avoid and Defend Supply Chain Disputes. Ms. Coates lives in Silicon Valley and has worked with over 80 clients worldwide. She is also an Expert Witness for legal cases involving global supply chain matters. She is passionate about Reshoring.
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