The Chinese New Year and Your China Supply Chain

What happens after the Chinese New Year? Or CNY? This is a very good question when it comes to your China supply chain.

A few weeks back, I wrote a blog about the CNY and the serious impact this has on importers and China supply chains across the country. You can read more about that blog here. This is when the factories hold their breath and cross their fingers in hopes of getting most of their factory workers back from the holiday.  Many workers do not return for various reasons and this puts a major strain on the factories.  They now have to hustle to get additional workers and this can be an HR nightmare, resulting in the devastation to your China supply chain.

Now comes a new issue that can be a big problem for the factories and importers.  The supply chain of raw material will have its own problems.  No raw material means no production.  No production means a longer lead time for your products to be finished and shipped.  Uncertain raw materials means a reluctance to quote and uncertain forward-looking pricing.

All this to say that your China supply chain can be seriously affected by a combination of a trickle effect of a few hundred workers refusing to return to work after the CNY and uncertainty about raw materials.  This is especially important when products call for special handling or where many of the workers are new and just being trained for new manufacturing processes, and it gets worse when sales agents pile up orders during the down time without properly consulting with the factory management.

So the Chinese New Year means all US importers will be affected and many will be disrupted. It generally means having a difficult time getting products delivered on time and it often means quality may be affected as well.  This is where the quality of the management of your China Supply Chain has a big impact.  With a robust China sourcing team, importers can keep CNY challenges under control.  They usually do this using simple but effective methods such as:  strong relationships with the factories; rigorous quality assurance processes; anticipation and prevention of delays etc..  These methods are designed to deal with the realities of the challenges factories are confronted with during CNY and keeping those into account when scheduling orders for production.

A good China supply chain management team with the right know-how and transparent communication will ensure that CNY will hardly have any impact on business at all. Business as usual is the goal.

We hope your CNY will be uneventful and we wish you a great new year of the Rooster!

What are your thoughts on the CNY? How do you manage to get back into the swing of things? How does your China supply chain recover from the holiday? Leave us your comments below!

By Susan Timpe