The Chinese New Year migration is here, and it will affect the delivery of products from China to North America and Europe. The 2011 New Year starts Feb. 3 for the “Year of the Rabbit.” Almost all Chinese manufacturing companies are closing their doors, and most will not reopen until February 14. Many factory workers are leaving one week early to beat the rush and cut down on transportation expenses.
This is a ritual that has played out over the years and that has had an impact on the Western manufacturing supply chain as production shifted to China. It's taken some time for Westerners to understand the dynamics of the Chinese New Year, and even now the nuances are not clear to many in the manufacturing sector.
Think of it this way and then enlarge it by a factor of three: All of North America and Europe relaxes or shuts down for two or three weeks during the Christmas and end-of-year holidays as they enjoy the festivities and use up vacation time.
When they finally get back into work mode around the second or third day of the New Year they are usually shocked to find that their production in China would be delayed four or more weeks, as a result of not placing orders before they went on holiday. What many North American and European companies fail to understand is that China is a huge country, and the majority of the work force in factories around the big cities comes from the outlying provinces.
Many factory workers will travel two or three days by bus or train just to get home for the holiday. The Chinese New Year season offers the only opportunity most people have to see their families, including their children. For them, this is Christmas, New Year, Thanksgiving, and all other Western holidays wrapped up in one. The mass exodus from all major cities began around Jan. 27 and is continuing now.
As in other countries, the cost of traveling goes up with the higher demand for transportation services. Many factor workers are forced to leave a week early so they can afford the trip. As a result, many Chinese factories have been working at 50 percent of capacity since Jan. 22, and most will be closed completely for two weeks. This is why you cannot expedite production.
Change is slowly coming to China, though, and many companies are beginning to consider ways to keep factories operational during this key holiday period. At Bluestar, for instance, we are keeping our manufacturing doors open during this Chinese New Year by rotating staff home at different times through the month to insure customer service and satisfaction. This is good for the customers that need to communicate with their suppliers, especially in emergency situations. It is also good for the employees, because those who choose to do so are allowed to travel during less expensive times.
The West is changing China as much as China is changing the West, but it's a long process and we are learning a lot from each other along the way.