How to Effectively Prepare Your Brand for the Chinese New Year Shutdown of 2020

For many Americans, the New Year is one a minor holiday that most likely includes a party with some friends followed by a single day off work. The Chinese New Year could not be more different.

In China and many other countries in Southeast Asia, the New Year is the most important holiday of the year. It takes place about a month or two after the American New Year and the celebration lasts nearly a month. This upcoming year, the Chinese New Year will begin January 25th.

If your business involves China or Southeast Asia in any part of your supply chain, the New Year will probably impact you. Without sufficient preparation for this major holiday, this impact could be a negative one. Here’s how you can prepare for the holiday shutdowns surrounding the Chinese New Year.

Plan In Advance

Most factories located in areas that celebrate the Chinese New Year will start slowing production before the holiday begins, completely stop production during the New Year, and slowly pick up speed again after the holiday. This means that production won’t be up to regular speeds for at least a month.

In order to not fall behind, it’s important to plan ahead. There are many methods for inventory forecasting that can help you accurately determine what you will need. You can use historical sales data as well as estimated upcoming economic factors.

It can be difficult to come to an accurate number through sales forecasting on your own, however. Especially if your business is new to this and doesn’t have a dedicated expert assigned to this task. To help get a more accurate number, you can use the help of inventory management software. There are types of software that will help with this task.

Create Inventory Reserves

Although using sales numbers from previous years can give you a good estimate, it’s important to be prepared for possible increases in sales. Most times of the year, a jump in sales is cause for celebrating. If a jump in sales happens during the Chinese New Year, however, you could find yourself unprepared to meet demand. This could cause extreme delays and frustrated customers.

Don’t let yourself get caught off-guard by an unexpected increase in sales. Instead, increase inventory in preparation for the Chinese New Year. This will allow you to meet demands, even if they are higher than predicted. This will help you maintain a solid brand image among customers because you won’t become known for constantly running out of stock and having long delays.

Implement Quality Control Checks

A possible concern in the time surrounding the New Year is a slip in quality for your products. When the holiday is over, factory employees may return to work at different rates, leaving factories understaffed and quality can slip.

The New Year is also considered a time to reevaluate careers.  It is very common for factories to see high turnover rates at this time as people switch jobs. The high turnover rates lead to understaffing, as it is difficult to hire new employees at a sufficient rate. Employees must be replaced very quickly

During this time of year, there is a higher rate of new employees without proper training, and it can take some time before there is time to properly train every new worker. Although, these new workers will likely learn over time, you don’t want the short-term decrease in quality to affect your brand’s image.

Hopefully, you already have a system in place for quality control. It is imperative that this system is functioning at its highest level during this season.

Consider Alternative Manufacturing Locations

Some manufacturers have locations in multiple regions. If this is the case with your supplier, you may be able to transfer your order to these alternative locations. Although many countries all over Asia celebrate the Chinese New Year, most regions outside of China have a smaller celebration. This means business doesn’t entirely shut down for quite as long.

If the manufacturer you work with does not have multiple locations, it is a good idea to diversify your supply chain anyway. Using manufacturers in a variety of regions helps minimize risk of regional events affecting your business in a significant way.

There are many locations near China that are excellent places to find a good supplier for your products. Some of these places have small Chinese New Year celebrations, while others celebrate the New Year at completely different times and in different ways.

Countries such as Vietnam, Indonesia, Thailand, and India have up-and-coming manufacturing industries where you will be able to find excellent manufacturers to meet your needs. Diversifying the regions in which your suppliers are located will benefit your business year round and not just during the Chinese New Year.

Maintain an Open Dialogue with Suppliers

Although for an American business, the adjustments needed to get through the Chinese New Year may seem complicated, the suppliers are very used to navigating this holiday. Your suppliers likely know what adjustments need to be made and what possible problems could arise.

It’s important to communicate frequently with suppliers throughout the holiday season. Talk with them in advance to get an idea of what to expect, and continue this dialogue throughout the season to get updates on how production is progressing.

If you communicate effectively with your suppliers, they will be able to help you find ways around any potential issues. They will be may be able to work with you on meeting inventory needs early, or they may be able to recommend possible alternative suppliers to use to supplement your inventory.

Additionally, your supplier keep you up-to-date on what the employee turnover rate has been like and if new employees are receiving the proper training. The more you communicate with suppliers throughout this season, the smoother it will be.

The Chinese New Year is not difficult to navigate if you make the necessary preparations. It is a great time of year for many people, and it can be a good time of year for your business, too.