news 
How To Mitigate Supply Chain Volatility During Chinese New Year
As the world prepares to celebrate Chinese New Year on January 29, 2025, supply chain managers must also be aware of the significant logistical challenges that come with this holiday. The annual festivities often bring about unpredictable disruptions and delays in global supply chains, making it essential for companies to plan ahead and optimize their strategies.
The new U.S. president’s intention to impose tariffs on certain products may prompt many American companies to accelerate shipments earlier than planned to avoid these duties. Additionally, labor strikes along the US East Coast and Gulf Coast could result in further delivery delays, while a weakening Chinese economy might lead to layoffs and a potential labor shortage. As a result, it is crucial for businesses to develop contingency plans to mitigate supply chain volatility during this period.
To navigate the complexities of Chinese New Year logistics, companies must plan ahead and prepare for the typical phases of volatility surrounding the holiday. According to Jason Chiu, Vice president and GC Head of Center of Excellence at SAP Digital Supply Chain, “Many Chinese manufacturing companies retain fewer employees to fulfill fewer orders than before,” but as demand increases for Christmas, New Year, and Chinese New Year celebrations, this can lead to production disruptions.
To mitigate these risks, it is essential for businesses to optimize their stock levels by planning ahead not only for the period before the holiday but also after. This includes topping up inventory to avoid potential production stoppages. Data-based planning tools and AI-supported demand forecasts can help companies minimize the risk of being left with excess or insufficient product.
For urgent deliveries during the Chinese New Year disruptions, it is advisable to explore alternative delivery options, such as ship-to-rail or combinations that combine air and sea transport. By diversifying their transportation strategies, businesses can ensure timely and efficient delivery of goods despite logistical challenges.
Another crucial strategy is expanding the supplier base to create fallback options in case a disruption occurs. With the possibility of tariffs looming, companies should also consider relocating procurement and production sites to other countries to offset dependence on Chinese suppliers.
Moreover, maintaining positive relationships with Chinese suppliers can significantly impact supply chain resilience during this period. Taking the time to congratulate your suppliers or sending small thank-you notes can help build goodwill and count in the face of disruptions. In the context of Chinese business culture, guanxi (good relationships) plays a vital role in overcoming unexpected obstacles.
In conclusion, it is essential for companies to stay adaptable, think ahead, and navigate logistical bottlenecks elegantly during this critical period. With smart planning and foresight, Chinese New Year 2025 can be overcome by supply chain managers worldwide.
Source: www.forbes.com
