Happy Chinese New Year!
If you import from China then you should be familiar with some of its major holidays each year. China is known for having longer holidays than most are accustomed to. As a Buyer you must PLAN for these to avoid disruptions to your supply-chain. Although a holiday may officially last for one week, many factories and businesses actually shut down for about ten (10) days prior to allow time for workers to travel home. Offices and factories can close for approximately three (3) weeks for just one major holiday.
Chinese Holidays in 2016:
New Year | Jan 1-3
Chinese New Year | Feb 7 – 13
Qingming Festival | April 2- 4
Labor Day May | 1 – 3
Dragon Boat Festival | June 9 – 11
Mid-Autumn Festival | Sept 15 – 17
National Day / Golden Week | Oct 1 – 7
What happens leading up to major holidays in China is nothing short of chaos. There is a mad rush to ship products abroad resulting in increased freight costs and longer transit times, if there is a delay at the port. Also, holidays pose a significant opportunity for workers to switch jobs and many workers will not return to their current workplace after. Essentially, CHINA the global leader in manufacturing shuts down…completely, with the effects felt around the world especially by retailers and anyone that relies on imports from China.
What can you do in advance to keep your supply chain operating smoothly pending a major Chinese holiday when factories shut down for days, weeks and even close to one month?
To assist you with planning for Chinese Holidays in 2016, we have put forward seven (7) tips that if followed each year, will substantially reduce any disruptions to your supply chain.
1. Understanding what happens during the holiday season is the first step in planning for the event. The fact that goods will not get out of China during a major holiday period will help you plan better for this particular period. This means that you must increase your inventory prior to this time-frame.
2. Establishing a relationship of trust with your supplier is critical especially if you are a new supplier and just began sourcing from China. Use the months leading up to each holiday to build and strengthen this relationship. Factories are under a lot of pressure leading up to major holiday periods and if a sound relationship is not in place, your order won’t be given priority for completion and shipping prior to the start of celebrations.
3. Projections are a key component of your strategy to get you through China’s busy holiday periods. Ensure that you have sufficient stock to sustain business operations through each period. An assumption should be made that you will not receive any goods in the months leading up to some of their largest annual holidays. Therefore you should increase your order in the months leading up to these periods to meet your monthly inventory levels.
4. Shipping and logistics are equally important when planning for Chinese holidays. Arrangements with freight forwarders on the ground in China should be made well in advance. This is necessary to ensure that when the container arrives on the port that it is loaded immediately and you avoid increased freight fees. The demand for ships to move cargo is high during the weeks leading up to all major Chinese holidays. Containers arriving late will feel the brunt of increased fees and will be bumped to the next period. It is important that your selected freight forwarder and Chinese manufacturer have experienced the rush of holiday season and are prepared to deal with the increased demand during this period.
5. Ensure that you have quality management in place for your goods. The last thing you want is to encounter quality issues with your goods leading up to a major holiday period when factories are operating at maximum capacity and in a rush to shut down before a holiday. This is where having a trusted relationship with your manufacturer works for you. Additionally, a quality plan inclusive of inspections will help to reduce the risks of having your shipment delayed due to quality issues, or worse shipping defective goods to your customers.
6. Plan for after each major holiday. This is very important as many factories will experience job loss due to workers switching jobs and it may be weeks or months before a factory can find replacement staff and resume operating at full capacity. Ensure your business projections reflect increased stockpiling prior to each holiday period to minimize risks of halted production and late shipments.
7. Start planning for major holidays early. The earlier you start planning, the better. Analyze your sales history from the past year and begin putting your projections together. Discuss with your suppliers and manufacturers months in advance how to circumvent supply-chain disruptions for the following calendar year.
Knowing what to expect before, during and after each major holiday in China is half the battle and being prepared is the right way to alleviate the negative impact on your supply-chain. We encourage you to utilize these seven (7) tips and guarantee that you will have a successful business and financial year with sourcing directly from China.
Should you require any direct purchasing / import assistance or more information on how to avoid the pitfalls associated with China-sourcing and the Chinese holiday period, please contact us at email@example.com or call (868) 271 3438.