Chinese New Year is almost here. Without preparation and planning, an organization administering an international supply chain from China may have a hectic time during this period of celebration abroad. Chinese New Year is the only time of year in which China’s labor force can return home to spend time with their families. Since factories, transportation companies, warehouses, and docks are not open during the Holiday, workers tend to stay home for a while. Traditionally, Chinese New Year celebrations typically last for two weeks and festivities will start before February 16, 2018. So, if you have not begun to plan for this year’s event, this national shut-down could bring havoc to one’s supply chain. Below is a guide to help with the potential disruptions which may arise from a Chinese New Year celebration. Happy 2018, the Year of the Dog!
- Make sure to have enough goods ordered to cover a Chinese supplier shutting down for 2-4 weeks. Please do not wait until the last minute to place orders. Book ahead of time to save money, and avoid the stress of not having products shipped. Before Chinese New Year arrives, there is a vast amount of companies rushing to place orders, and then transport their inventory before the break. This pre-holiday rush usually leads to tighter shipping windows, reduced space, and higher premiums for containers, transportation, logistics, and expediting.
- Orders must be double-checked for quality control. Since the risk of quality assurance issues increases during this time, logistics and supply chain managers must stay on top of the production schedule as well as maintain a keener oversight on the process. A business may need to employ additional staffing for inspections to ensure orders prepared close to Chinese New Year meet quality standards. It is essential to be conscious of rushed work from a supplier during final production runs as the holiday approaches. This crucial period is when workers could be the most unfocused or restless to leave for the break.
- Worker production falling closer to this annual event is not the only quality concern. Since this period puts a high demand on suppliers, some of them may rely on subcontractors to maintain customers. While this practice meets orders, it does not always guarantee finished goods achieve their usual high standards. In addition to using subcontractors, this time of year also forces some suppliers to use shoddy materials or parts to complete requests.
- Other quality assurance practices may need to be implemented over the next few months following the Chinese New Year to ensure production returns to meet quality expectations. Unfortunately, the Chinese labor force has high turnover rate after the break as almost 30% of China’s factory workers do not return. This lack of experience from new laborers filling positions once held by seasoned veterans of the task can affect the quality of the final product. So, it may take up three months for goods to return to typical production.
While it is imperative that none of these scenarios exist with your current suppliers and factories, it is best to check to ensure these issues are not happening with your products. Oversight from abroad can seem daunting, especially if you cannot make a trip to China before the New Year’s shutdown begins. However, with OCEANAIR’s help, we can communicate with your supplier on your behalf. That is how we make logistics simple.
