When people think about the holiday season in the United States, they are often referring to that period between Thanksgiving and New Year’s Day. But shortly after, there is another holiday that brings friends and family together in several Asian countries. The Lunar New Year, also known as Chinese New Year (CNY) or Spring Festival, is an annual 15-day celebration in China and communities around the world. It marks the first new moon and lasts until the following full moon, occurring sometime between January 21st and February 20th.
Chinese New Year has a history of about 3,500 years. Its exact beginning date is not recorded, but some people believe that Chinese New Year originated in the Shang Dynasty (1600–1046 BC) when people held sacrificial ceremonies in honor of gods and ancestors at the beginning or the end of each year. Throughout the years, activities and customs, such as setting off fireworks and visiting friends and family, became important parts of the Lunar New Year celebration. But, in 1912, the government abolished the lunar calendar and adopted the Gregorian calendar, making January 1st the official start of the New Year. After 1949, Chinese New Year was renamed the Spring Festival and listed as a nationwide public holiday.
New Year festivities usher out the old year and are meant to bring luck and prosperity into the new one. It is a time to feast, visit family, and honor relatives who have passed. This year, celebrations will begin on February 10, 2024, bringing in the year of the Dragon, and will conclude after the Lantern Festival on February 24, 2024. The first 7 days are considered a public holiday where non-essential businesses will close their doors, but a lot of offices and factories will close operations for about three working weeks to allow workers time to travel back home to spend the holiday with their families. While this is a cause for celebration in China and other surrounding countries, the holiday can disrupt production and shipping schedules for up to three weeks or more. China is an economic giant, and the effects of CNY can ripple around the world, especially for businesses who rely on imports from China.
So, you may be wondering how this affects you and why your business should plan for one of the largest holidays of the year. Sit back and grab some form of a writing device because we have some helpful tips.
In the United States, we do not have any public holidays where businesses shut down for an entire week, and it may be hard for us to understand why any business would close its doors for more than a couple of days. Lunar New Year is celebrated in China and many surrounding countries every year. Take the time to understand the importance behind the holiday and how it affects your business so you can plan for any disruptions to your business operations.
To prepare your business for the upcoming Lunar New Year, we recommend looking over your sales history to see if there are any patterns for when certain products are in demand. This will help you predict the parts you need so you can put together a forecast for the first 6 months of the new year.
It’s important to work with your suppliers and plan for before and after the celebration as delays in production and shipping may continue into the spring. It’s possible that not all workers will return to their old job after the New Year. If there is a labor shortage, it could take factories weeks or even months to get production back to normal.
Prior to placing orders, check your inventory levels. Once you understand how much product you will need for the next 6 months, you can begin ordering in advance. The forecast is also helpful to keep your inventory at manageable levels while factories get back on their feet and so you do not over-order products.
Inventory management programs are a business model that allows your supplier to maintain an agreed level of inventory of parts you need most. Suppliers will analyze your forecasted usage, current inventory levels, and demand shifts in the market before replenishing. Suntsu Electronics offers three customizable inventory management solutions that are designed to fit your needs and help reduce or eliminate lead times and improve cash flow constraints.
Spend time building strong relationships with your suppliers and contract manufacturers. This could help you collaborate, get better visibility into the status of your orders being processed, and benefit the company’s bottom line.
The Lunar New Year holiday will affect your supply chain, but you can protect your business if you are prepared. Reach out to our team if you have any questions or need help forecasting for the New Year. We are experts at helping OEMs navigate this time of year and mitigate supply chain constraints. We are here to help you create what’s next!