What is the Chinese New Year and How to Plan Your Supply Chain

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Chinese New Year is an important celebration in Chinese culture. The Chinese New Year for 2023 begins on Sunday, January 22, just weeks after businesses across the US are back from their own holiday celebrations. 

During the Chinese New Year, everything shuts down for a minimum of 7 days. Residents go to see family. Warehouses, manufacturing facilities, and shipping may all cease. As a result, there can be global shifts in the availability and anticipated supply chain disruption. Some facilities will shut down for 10 days or more to allow their employees time to get home to be with family. As a result, little moves throughout China during those days. 

4 Ways to Prepare for the Chinese New Year

Preparing for the Chinese New Year is essential. Since you know that you can anticipate shipping and production delays during that time, and that those delays will occur on top of the supply chain challenges you may already be facing, it is essential that you plan to address those potential problems and ensure that your business comes through them smoothly.

Planning

Pay attention to your long-term demand and build a strategy that will allow you to have the right goods on hand. Make sure you have a plan in place to ensure that you have the right goods on hand for your customers when you need them. That may mean increasing your orders of some items leading up to the Chinese New Year.

Look at your available storage space and how much inventory you can realistically have on hand at a time. In some cases, you may not be able to increase your inventory significantly leading up to the Chinese New Year. In other cases, you may have the warehouse or storage space to increase your inventory and make sure that you have an adequate supply of critical items.

Diversity in Sourcing

Consider diversifying your sourcing to build in resilience. Chances are, you can get many of your materials and products from somewhere other than China. As a result, you’ll find yourself in a much better position to keep your goods and your supply chain flowing smoothly. By looking for a wider group of suppliers, you may also find that you can cut costs or prepare for unexpected delays in the future.

Prioritization

As you build your inventory and plan for potential delays around the Chinese New Year, make sure you take your top-priority goods into account. Ask yourself questions like:

  • What are your biggest sellers during this time of the year?
  • Are there specific items that are in lower demand at this time of the year, and which you could keep less inventory of during this time?
  • What are the items that customers are most likely to need during this period?
  • What items can you stock up on ahead of time?
  • What are the items that would mean the biggest loss for your company if you don’t have them in stock?

Make sure you clearly understand your top priorities as you plan for the Chinese New Year. Having those priorities laid out ahead of time can make it easier to deal with potential challenges as they occur.

Shifting Inventory

If you have multiple locations for your business, shifting and rotating inventory may offer your best odds of ensuring that you can keep as many customers satisfied as possible. In some cases, you may have inventory at one location that isn’t moving, but a shortage of those same items at another location. In other cases, you may want to spread out inventory to keep customers as happy as possible.

Contact StockIQ Technologies today to learn more about how we can help you navigate potential challenges.

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