Do you import goods from China? Find out how Chinese New Year 2020 could affect your supply chain
If your business relies on manufacturers in China or the other countries that celebrate the holiday, the Chinese New Year shutdown will probably affect your business — even if the factory is just one step in your supply chain.
Halted production: Call me
Chinese New Year is a public holiday in countries where it is celebrated. During the Chinese New Year holiday, all factories close and employees go on holiday for at least two weeks.
As this includes management and production overseers at the factories, you may not be able to get in contact with your suppliers during this time. All production will come to a halt, and you won’t be able to get in touch with the factories until after the holiday ends.
Reduced product quality: Call me
When factories reopen after the Chinese holiday, workers may not come back at the same time, and sometimes not at all.
When workers don’t come back, factories must replace them quickly, which leads to lower quality and untrained staff working on production lines. As expected, when new workers are on the line, many products will not be produced properly.
Unfortunately, that doesn’t necessarily mean the factory will re-run your order and, in some cases, they may ship the bad products along with the rest of your order. Ultimately, you may end up paying for a run of lower quality products without much recourse, especially if you need those products immediately.
Shipping delays: Call me
Since the Chinese New Year shutdown happens every year, most businesses do their best to prepare for the factories’ time-out by increasing their production before the holiday.
This can often lead to an overload of shipments that need to be made right before the holiday begins. Factor in the chance that many workers will be leaving early to get a head start on their holiday, meaning fewer employees in the weeks leading up to the Chinese New Year, and there’s a good chance your shipment could be delayed in the buildup.