Some disruptions are unpredictable, others we see year after year. Is your team primed for the disruptions in sight?
Take Chinese New Year (CNY), for example. Every year, the ripple effect of CNY is felt by traders around the globe, with all sectors, from retail to manufacturing, feeling the pinch.
We got Explorate’s experts to share their tried and tested insights and advice to build this guide to help you dodge the Chinese New Year disruption in 2024. Continue reading and join the ranks of businesses ready to tackle foreseeable disruptions head-on with essential know-how.
Whether you know it as the Lunar New Year, Chinese New Year, Spring Festival, Seollal, or Tết, one thing remains constant — it marks the celebration of a new year. Celebrated in North and Southeast Asian nations, the duration of these festivities can extend anywhere from a few days to well beyond a week.
Below, outlines the anticipated schedules for disruption from different participating countries.
NOTE: The holiday's dates vary yearly as it aligns with the lunar calendar.
Beyond the official week of Chinese New Year, the lingering impact of closures, operational slowdowns, and congestion significantly prolongs the effects on supply chains.
This year, with the CNY dates falling later, we’re seeing workers going on holidays now.
The timeline of impacts you can expect is as follows:
Now that you're aware of the expected timelines for impact, let's explore the specific disruptions that may arise during Chinese New Year.
Chinese New Year puts a halt on production as warehouses, factories and ports are either closed or running at reduced capacity. In summary, this means:
The combination of production downtime, increased labor costs, and disruptions in the supply chain, stemming from factory closures and heightened demand, causes an acute financial burden.
Beyond the balance sheets, the ripple effect of Chinese New Year can ultimately flow through to your customers.
Now for the part you’ve been waiting for. What can you do now to fortify your business for these disruptions?
Audit your inventory now to prepare for factory closures. Ship orders early to dodge delays and costly surges. Also, don't be caught off guard by the post-CNY delays caused by the gradual return of workers and the onboarding of new staff.
When planning, break down your internal silos. When different teams in a business work together, they can achieve more. Align your internal teams like marketing, sales and customer experience by sharing supplier details for nimble planning and communication in the face of delays or stockouts. By breaking down your internal silos, you can minimise the impact of the above delays.
Get in touch with your Chinese suppliers to understand their individual holiday timelines and manage expectations. This crucial information will guide necessary adjustments to your production and shipping schedules.
Collaborate with your freight forwarders to set your expectations and understand how they're working to mitigate disruption. This ensures we can tailor the most suitable solution that aligns with your budget and schedule. This is always a good idea, no matter what season.
Expect a spike in shipping rates and extra costs during this time. Safeguard your budget with a contingency plan in case disruption does impact your supply chain. Rushed pre-holiday production may heighten the risk of defects. Investing in third-party quality control services can help ensure quality control issues don’t end up impacting your bottom line.
Well, that's easier said than done. Where to start?
Start by using a digital freight forwarding platform to access tracking of shipments, document management and PO management. This enables you to track the whereabouts of your shipments and keep your freight admin in order.
Missing supply chain insights impede the alignment of sales, marketing, and finance strategies, ultimately impacting your bottom line.
Knowing and navigating logistics peak seasons and known delays is essential for a stock strategy that hits sales targets without breaking the bank. Syncing freight seasons with your sales campaigns isn’t just a game-changer; it's a game-winner.
That’s why we’ve made a resource that does exactly that, so you can plan ahead for peak seasons, dodge delays, and keep customers happy.
Logistics management is never one size fits all. But staying one step ahead, acquainted with the risks that permeate the logistics landscape, is how you can fortify your business.
In times of crisis, whether it's a shipping delay, customs issue, or unexpected disruption, a strong relationship with your freight forwarder can make all the difference. So if you’re not feeling confident in your brand's ability to face Chinese New Year in 2024, get in touch with our team.