Just when you thought the holidays are over, the Chinese New Year holidays and celebrations are underway. The Chinese New Year (CNY) is a time for celebration and family gatherings but it can be a source of delays and disruptions in your supply chain.
During this holiday, the economy slows down with factories closing for extended periods and transportation networks becoming congested, Its therefore important to plan ahead and take steps to minimize disruptions and sourcing headaches.
What is the Chinese New Year
The Chinese New Year, also known as the Lunar New Year or the Spring Festival, is the most important festival in China. For those who are unfamiliar, this celebration is similar to Thanksgiving or Christmas in the United States or Diwali in India.
It is a week-long vacation during which most employees have time to spend with their family and friends. This holiday is celebrated by over 1.3 billion people worldwide and has a significant impact on the global economy.
During this holiday, families of multi-generations will gather together and enjoy a rare time of reunion. Being a 7-day national holiday, many people will take the leave in advance and travel even a long way back to their hometowns.
Due to the importance of CNY, many corporates and factories shut down days ahead of time to celebrate. Hence, it’s critical to prepare your supply chain in advance of CNY to make ascertain your production runs as scheduled.
This year the official date for the CNY is January 22nd. The public holiday is a week-long, starts from January 21st to January 27th. Though the CNY celebration lasts only one week, the factories will typically close 2-4 full weeks ahead.
It is wise to note that the festive holiday is celebrated not just in China, but in other countries with Chinese populations such as Singapore, Malaysia, and Indonesia. To keep you on the loop, below we have provided actual dates when CNY falls in coming years.
- Chinese New Year 2024 – Saturday, February 10
- Chinese New Year 2025 – Wednesday, January 29
- Chinese New Yeastock26 – Tuesday, February 17
- Chinese New Year 2027 – Saturday, February 6
- Chinese New Year 2028 – Wednesday, January 26
- Chinese New Year 2029 – Tuesday, February 13
- Chinese New Year 2030 – Sunday, February 3
How does CNY affect your business?
During the Chinese New Year, factories in China may shut down, causing product shortages and price increases. This has the potential to have a significant influence on the economy, both in China and throughout the world, with a drop in production and an increase in absenteeism.
Here are a few ways to avoid delays in your supply chain during the Chinese New Year:
- Anticipate closures and plan accordingly: Many factories are expected to close for at least a week or two during the CNY, so its important to anticipate these closures and plan accordingly. This may mean ordering materials or products well in advance, or find alternative sources of supply.
- Communicate with your suppliers: During the Chinese New Year, communication with suppliers can be more difficult as many people are away from their offices or factories. It’s important to establish clear lines of communication with your suppliers well before the holiday so you know how they’re operating during this time.
- Monitor transportation networks: With many people travelling during the Chinese New Year, transportation networks can become congested. Keep an eye on shipping schedules and plan accordingly.
- Be flexible: Delays and disruptions are an inevitable part of doing business during the Chinese New Year. Be prepared to be flexible and adapt to changing conditions.
- Build a buffer stock: Building a buffer stock allows you to have a safeTy stock on hand so that you can continue to fulfill customer orders even if there are delays in your supply chain.
- Diversify your suppliers: Diversifying your supplier base allows you to have a backup plan in case one of your suppliers is unable to fulfill an order due to delays.
As the old saying goes, “By failing to prepare, you are preparing to fail.”
The Chinese New Year period can be a daunting time for businesses, but by planning ahead and being prepared for disruptions, you can minimize the impact on your operations.
By following these steps to anticipate closures, communicate with suppliers, utilize their transportation networks, and be flexible, you can help minimize disruptions and ensure that your supply chain runs smoothly during the Chinese New Year.
We wish our partners, friends, colleagues, and customers a very happy Chinese New Year.
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