The annual Chinese New Year holiday (CNY) literally brings China to a standstill for a month as millions of Chinese migrant workers return to their home towns for their annual leave.
The impact of CNY is profound as it causes large scale disruption to the supply chain, so proper planning for this event is essential as the potential negative impact on your business is immense.
The most serious issues impacting supply usually happen around Chinese New Year. Pre-CNY factories are under pressure, often working overtime to get product manufactured and out the door before they close, so often things are rushed and as a result quality suffers.
In addition freight costs go up dramatically at this time due to excessive demand, impacting your costs and profitability.
Post –CNY a large percentage of the workforce do not return to work , so new workers need to be employed and trained up, this often impacts quality.
So planning and budgeting is critical to mitigate the CNY effect.
China can be steep learning curve , and many of the solutions can only be learnt through experience , and that’s why you need a sourcing partner who understands the fundamentals, has the pedigree to assist you across the entire value chain and can execute both quickly and efficiently.