If you are outsourcing from China, you may be familiar with the incoming Chinese New Year. Probably now you already start planning for Chinese New Year so that everything can run smoothly during that time. You surely don’t want any production and shipping disruptions that can cause damages to your business.
Chinese New Year will begin on Friday, February 12th, 2021. Typically, Chinese offices and factories will be closed for around 3 working weeks, allowing their workers to travel back home and have time with their families during the holidays. That means you will need to get your business prepared for this period carefully when there will be no production, supplies, and no shipping. In this article, we will help you to list out certain things you need to know for your plan during this new year holiday.
Why do you have to get planning for Chinese New Year?
In case you are still new to the business, you may be wondering why you should get planning for Chinese New Year since it just lasts for 1 week according to what you can find on Google. However, the fact is many factories will shut down for much longer – about 10 days before the holiday so that their workers can arrange to come back home. China is a huge country and its people need more time to migrate from their working places to their homes.
There is always a big rush to ship products out of ports before the shutdown, which can result in increased freight costs and longer transit times. There will also be a big disruption in production due to the long holiday. Things can be worse when a lot of workers don’t return to work and factories will have to manage to hire new workers and ramp up on production orders.
With such huge effects, no wonder planning for Chinese New Year is so important to run your business during the time.
8 things you need to know when planning for Chinese New Year
1. Understand what happens during Chinese New Year
It may be hard for you to imagine such a shutdown in China when you do not live here. But in fact, after you know that shutdown means nothing will get out of China, you will find it important to plan to ship your orders before the Chinese New Year, to prepare your inventory to get through the holiday. It requires advanced planning for Chinese New Year to minimize interruptions on your end.
2. Develop a trustful relationship with your manufacturers
This is enormously important in your planning for Chinese New Year, especially when you are still new and building your network with your suppliers and manufacturers or sourcing agents. However, it is not a thing that you can expect it to thrive on overnight, or, just in a month right before the holiday. A trusting relationship between you and manufacturers needs both time and effort.
Otherwise, if you are the newest customer to your suppliers or manufacturers, they are more likely to process your orders as their last priority among other customers. Furthermore, you need to be sure that your manufacturer partners have the required experience in handling orders and shipping in Chinese New Year’s rush. Don’t hesitate to ask for their plan for the holiday period.
3. Create a forecast for Chinese New Year
You surely can estimate how much product you will need during the holiday so that you can have enough inventory on hand to get through Chinese New Year. Lacking in stock is the last thing you want while you can totally get prepared for that. So remember to get planning for Chinese New Year inventory right now.
4. Increase your inventory beforehand
Apart from creating a forecast for your inventory, you will need to order a little more products to avoid being low in stock or lack of orders to be received in March next year. This is a good way to keep your inventory at manageable levels and ensure you don’t over-order at the same time.
5. Keep an eye on the shipping process
In case you are in charge of the shipping process from China to your company or to your customer’s address, it is highly recommended to book shipments with steamship lines well in advance of the holiday. When it comes nearer to Chinese New Year, there will be an abundance of shipments waiting to leave port before the shutdown. That means the freight rate during this time will unquestionably increase.
With such an increased rate, you probably heard days or weeks delays of shipping containers at the port. That’s why getting prepared in advance with your shipping process and a trusted relationship with a freight forwarder or manufacturing partner will be of big help in your planning for Chinese New Year.
6. Put a Quality Management Plan into place
Normally, whenever a product is shipped to your customers with quality issues, you can always resolve the problem in no time. However, things will be so different during the holiday. It will take a much longer time for your manufacturers to reproduce and reship the products to your customers. Let’s say your manufacturers can manage to do it for you right before Chinese New Year, you will also need a great relationship with your partner in that case.
But on the other hand, you can avoid this kind of problem by having a quality management and thorough inspection plan in place in your planning for Chinese New Year, which will effectively reduce the mentioned risks of a delayed shipment for you.
7. Planning for AFTER Chinese New Year
Planning for Chinese New Year itself is not enough. Actually, what happens after that still matters. Because one problem of Chinese New Year is that many workers don’t return to work after the holiday, which makes a workforce shortage for many manufacturers. It could take weeks or months for manufacturers in that case to get back to normal production with such a shortage.
So, you should always be prepared for this issue by increasing your inventory not only to get through the holiday but also after that a while.
8. Start planning early
It’s a month left from now to Chinese New Year. And it’s not too early ever for your planning for Chinese New Year. The earlier you get prepared, the better. List out all issues you might face due to the long holiday, analyze each scenario, and come up with your own solutions. Also, sit down and work with your suppliers or manufacturers’ partners to start planning for the upcoming holiday.
Knowing what will happen during the holiday is important, but start planning for Chinese New Year plays the most important part after all. You have to do your own analysis and forecast to get your inventory ready, work with your partners to ensure the shipping process is ok. Tons of other problems need your decision to run smoothly. So it’s time to do it from today. Hope that the 8 issues we pointed out in this article will give you a general idea of what you should get prepared for, which help your business remain thriving during the long holiday, and also thrive hugely in the next new year!