Factories will close for up to 40 days around Chinese New Year. What’s your plan? These five tactics will minimize costly disruptions.
Celebrated for over 1000 years, Chinese New Year is THE mega social and economic holiday of the year. For nearly the entire month of February and the first few days of March, there will be significant slowdowns – and complete stoppages – of production related to the 2018 spring festival.
What to expect
- Factories across China close for up to 40 days.
- 400+ million Chinese will travel around China and the world.
- Slowdowns and stoppages will bring supply chains to a halt.
- Long response times for inquiries are to be expected.
Key dates
- Monday, February 2nd: Factories in China start to close.
- Thursday, February 15th through Wednesday February 21st: Official National holiday. All factories in China will be closed. (CMD’s offices will also be closed.)
- Friday, February 16th: Official day of Chinese New Year.
- Thursday, February 22nd: Some factories start to re-open.
- Friday March 2nd: Lantern Festival.
- Monday, March 5th: Most factories are back online.
Five tactics to minimize supply chain disruptions during Chinese New Year 2018
1. Proactively contact all China suppliers. Get exact dates for shutdowns.
2. Send suppliers a forecast as soon as possible to coordinate production needs.
3. Confirm with each supplier the final date orders must be received in order to arrange shipments prior to Chinese New Year 2018.
4. Inform your entire supply chain staff to plan on zero response times during the month of February 2018.
5. Double up quality assurance & control. Although the number has trended down over the years, factories still lose 10 – 15% of their workforce around Chinese New Year. Having made some money, many workers return to the countryside, set up small businesses, and do not come back to the factory. Factory owners do not know who will not be coming back – and when – and end up in a slow period until they can find, on-board, train, and work through the challenge of replacing a significant part of the workforce. Extra vigilance on processes (overall quality) is required during this time.
The bottom line
Most Chinese workers don’t take leave except during this time of year, so factory staffing will be skinny in the weeks up to and after the spring festival. There are slight differences in scheduling for each factory that can have a huge impact if not properly communicated and mitigated. On behalf of clients, CMD proactively works with 1) each factory to understand plans for shutdown during the holiday period and 2) clients to obtain forecasts and keep goods flowing. Worried about losing a month that will take you a year from which to recover? Contact us.
Learn more about the custom and traditions related to Chinese New Year.
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