As we approach the Lunar New Year, which starts on February 10, 2024, it’s important to remember that this marks a considerable shift in the world of Asian electronics manufacturing. The global interconnectedness of electronics manufacturing means that potential disruptions during this holiday can impact any company, regardless of their production location.
This post follows our initial 120-days to prepare post, providing you with necessary insights and strategies to ensure uninterrupted production. In the earlier post, we advised you to:
- Forecast your production needs for Q1 and the beginning of Q2 2024 to ensure you maintain sufficient stock throughout the Lunar New Year cycle.
- Enhance inventory levels promptly to address customer demands effectively.
- Adopt a diversified production strategy, like a China-plus-one approach or parallel production in multiple factories, to alleviate Lunar New Year pressures.
90 Days to Lunar New Year: Key Insights
With 90 days left until the Lunar New Year, we delve deeper into why this holiday has such a profound impact on manufacturing. Understanding these reasons will emphasize the importance of being prepared. Here are some crucial aspects to bear in mind:
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Post-Lunar New Year: Gradual Ramp-up in Production After the Lunar New Year, APAC region factories are slow to return to full production capacity. In China, it’s a common practice for workers to change jobs during this time, resulting in approximately a third of workers not returning to their previous workplaces. Consequently, it could take up to a month for some factories to resume full production.
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Quality Control Concerns Quality can take a hit both before and after the Lunar New Year holiday. The pre-holiday rush to fulfill orders can sometimes compromise quality, while post-holiday, inexperienced employees can lead to more errors. Consider using third-party product inspections during this time if you’re manufacturing in APAC countries.
In the run-up to Lunar New Year, shipping costs can skyrocket due to heightened activity at Asian ports.
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Shipping Costs Peak During LNY In the run-up to Lunar New Year, shipping costs can skyrocket due to heightened activity at Asian ports. The rush to move products out before the holiday season paired with reduced shipper availability can cause a spike in costs. Besides, other ongoing issues like geopolitical instability, increasing energy and raw material prices, and potential tariff modifications can influence the electronics manufacturing industry. Keeping these factors in mind while crafting your Lunar New Year plan can help mitigate unexpected obstacles.
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Diversify Your Manufacturing Base Consider mitigating reliance on overseas suppliers by leveraging North American manufacturing capabilities. MacroFab offers flexible solutions across numerous factory lines in Mexico, Canada, and the United States. Utilize our expert support team this Lunar New Year to meet your delivery schedules.
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