2022 is the Year of the Tiger! This year Lunar New Year, or Chinese New Year, is on February 1st and festivities will last until February 15th. The Lunar New Year is an extremely important holiday within Chinese culture and workers usually are sent home for a week. During that time, a vibrant and joyful celebration takes place with rich traditions involving well-prepared family dinners, gift exchanges, parades, and time spent honoring those who have passed away. The Lunar New Year is a beautiful celebration but if your business relies on a Chinese manufacturer, make sure to mark it in your calendar well in advance.
What to Expect
Historically, the Lunar New Year slows down the supply chain for 3-4 weeks. As factories close and employees travel home, shipments coming out of China take a pause. Following the holiday, there is a slow revamp as Chinese businesses gradually get back to “normal.” If you outsource from China it’s important to stock up on inventory before the holiday. Stockouts are nothing to joke about and carefully planning ahead is the best way to avoid them.
Find Backup Manufacturers
The old saying, “don’t put your eggs in one basket” rings especially true during the Lunar New Year. Regardless, relying on one manufacturer is never a good idea. If you find yourself historically running low on stock during the Lunar New Year, now is the time to engage in scenario planning and explore alternative manufacturers for next year not based in China. Having a reliable backup supplier based somewhere different from your main supplier is a great way to protect your business.
A Silver Lining
The Lunar New Year may sound like it has a lot of consequences on the supply chain but there is an upside this year. If you haven’t noticed, the current global supply chain is congested at all ends. Ports, trucking companies, and warehouses are all behind on orders and need some time to play catch-up. The Lunar New Year will pause imports coming in and prioritize the domestic supply chain. This moment of respite might just be exactly what we need after the holiday rush.
Always Start Early
2023 will be the Year of the Rabbit and the business that plans the earliest will be rewarded. Stocking up on inventory early, budgeting for holiday-affected prices, and strengthening your relationships with your Chinese suppliers are all ways to ensure a smooth February. Keep in mind, the strongest businesses apply the Lunar New Year mindset year-round. You should always be eyeing your inventory and strategizing reorders months in advance. Planning is complex work and most ERPs struggle with this type of ‘edge case’ scenario (even though it happens every year!). Recurrency’s Demand Forecasting was designed to relieve some of that pressure. Recurrency carefully studies industry trends and your typical product usage and then recommends intelligent purchasing practices you can adopt immediately. We want you to be able to live in the present, too.
Recurrency will make sure your business is running with confidence and power – like a tiger. Book a demo today.