Supply Chain Strategy and the Chinese New Year

The Chinese New Year can often have negative implications to supply chains originating in China and affects large number of International Supply Chains. Making sure that you have the correct procedures and strategies in place to deal with this is crucial to businesses continue as usual over the Chinese New Year period.

Chinese New Year 2018 begins on the 16th February and the celebrations last for 15 days. This means that most factories within China are closed for this period – and the disruptions can last anywhere from 4/5 weeks to 3 months until the factories are reaching maximum capacity again. Even then, some factories will see a 25% drop in the workforce upon return after the festival.

6 Ways to Plan for the Chinese New Year:
  • Create demand and supply forecasts around Chinese New Year.
  • Know the lead time of your products and check production lead times
  • Place orders to ship 3 weeks before the festival
  • Confirm delivery date timelines after orders
  • Deliver cargo to the port no later than 10 days before the ship date
  • Order enough products to supply Q1 demand.

In 2014, there was a trade deficit of $20 Billion in January. As well as $15.2 Billion in February that were caused in manufacturing across China.

In doing so, you will reduce the affect that Chinese New Year has on your business – maximising your profits and increasing Supply Chain Optimisation.

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If you are concerned about the effect Chinese New Year might have on your business, get in touch with our supply chain consultants today.

Supply Chain Strategy and the Chinese New Year Infographic

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