It’s nearing the end of the calendar year and your development team has worked hard these last several months to finalize your product design. Now you’re ready to tool and get initial prototypes for testing. However, when placing your tooling order, you are told you will not have prototypes until the beginning of March, which is more than double the time you were expecting! The reason being… the Chinese New Year Holiday.
Chinese New Year (CNY), also known as Spring Festival, is China’s most important national holiday. Each year, a vast majority of China’s 1.4 billion population travels near or far. Particularly for the manufacturing sector, this is the time when all factory workers go back to their hometowns and spend time with their families. For most, this is the only time factory workers see their families due to the distance of their hometown to the factory’s location. Due to the importance of CNY, businesses within China, including factories, shut down for a period of time. If not planned accordingly, these closures could negatively affect your product development timelines in completing tooling and receiving prototypes.
In the several weeks leading up to the CNY holiday, most factories’ priorities focus strictly on existing customers who are making large pushes to get as much inventory as possible prior to the holiday shutdown.
With workers returning home, factories will close during the CNY holiday with production and shipments completely halted. Typically, factories will close for about 3 weeks with additional delays of 2 weeks as the factory gets back into production post-holiday. In the several weeks leading up to the CNY holiday, most factories’ priorities focus strictly on existing customers who are making large pushes to get as much inventory as possible prior to the holiday shutdown. Since the core focus is on existing production, almost all new product development, tooling, and prototypes are halted until after the holiday. Due to these delays, you must plan ahead to ensure you receive tooled prototypes at the time you need them.
When is Chinese New Year 2019?
Chinese New Year holiday is a week-long celebration. The official date for the Chinese New Year Day in 2019 is February 5. Depending on the production facility, you can expect factory closure dates between January 28 through February 10, with some being closed an additional week either before or after the holiday.
One to two weeks prior to closure, most factories start ramping down their workload, which includes shutting down production and finalizing the rush of product deliveries before the holiday. When the factories re-open after Chinese New Year, it takes a couple of weeks for production and new development to ramp back up to normal timelines. Why? Many factory workers do not return to their same job. They will either switch industries completely or find work at a different facility that offers better benefits or may be closer to their hometown. Typically, factories will see a 20 – 30% drop in their returning workforce, although this number can vary widely depending on the type of manufacturing being done. The employment drop requires extra time after the CNY closure for a factory to hire and train new workers before it is back up to full capacity.
With the focus on existing customers in mass production, the ramp down prior to the Chinese New Year holiday, the actual holiday, and training time for new factory workers post-holiday, you can expect major delays in tooling being completed and receiving new product prototypes. In short, these delays can add upwards of 4 to 5 weeks to your already 4 to 6 week lead time. When choosing your manufacturer, ensure that communication is one of their strong points so that you will be informed on any delays well in advance.
How to Prepare for CNY Closings and Delays
- Know the lead-time for your tooling and if your order coincides with the Chinese New Year holiday.
- Place orders to ship by the beginning of January. This will ensure your prototypes will be out of the facility and on their way before the factory pushes to complete existing product production before the holiday closure. For example, if your tooling has a 4 week lead time, you will want to order by the beginning of December. If possible, order 1 - 2 weeks in advance to provide a safe delivery date buffer.
- Order enough prototypes to get through all of the testing needed during the entire first quarter of the year. It is best to think beyond your need leading up to and through CNY and understand your total requirements through March. By having enough units on hand, any factory closures will have minimal impact on your development schedule.
How to Avoid Delays After the CNY Holiday
- Do not rely on past tooling quotes for timelines on delivery dates. Confirm your dates with orders that are needed immediately following the holiday.
- For tooling orders that overlap with the Chinese New Year holiday, add 4 to 5 weeks to your lead time and place your order earlier than usual.
- Check your supplier’s lead time immediately following the holiday. Depending upon the workforce fallout during CNY and any time needed for NRE (non-recurring engineering), tooling lead time may temporarily be impacted (i.e., what was a typical 4 - 6 week lead time could now be 7 - 9 weeks).
Chinese New Year is a wonderful holiday that allows families celebrate their heritage together. Since it is such a long holiday, factories will close for a significant amount of time. These factory closures can cause disruptions to your new product development timeline if you do not prepare properly. Take the necessary precautions by ordering in advance in order to& receive your newly tooled prototypes without delay and keep your product development schedule on track.