Time management plays an important role in our work. Time management is closely related to factory and quality management. As time has a major impact on your company’s profitability manufacturing and supply chain. We have informed all our clients that we are 2 months away from the yearly Chinese New Year nationwide shut down of the manufacturing industry. Suggesting our clients place their last orders before CNY.
The below article contains:
- Early Chinese new year for 2020
- Factory workers leave even earlier this year
- Factory HR department issues
- Lack of labour performance and availability
- Time management and product quality
- Time management to solve quality problems
- Negotiation position
- Booking scheduled boats
- Factories their time management strategy
1. Early Chinese new year for 2020
This year, Chinese new year is earlier than last year. Causing difficulties in the yearly planning for some companies. Not being aware of this early Chinese New Year period can cause problems in your supply chain and product quality. This year, new years eve is the 24th of January.
The Chinese new year period is every year closing down many factories for a long time. Creating a supply gap in your supply chain planning. With this year Chinese new year being early, timely placing your orders is important. However, being “on time” for this period of the year influences more important manufacturing assets.
2. Factory workers leave even earlier this year
Factory workers will leave earlier from the factories towards their hometowns. As many factory workers live hundreds to over a thousand kilometres away, they have to leave earlier than the official CNY dates to reach their families on new year’s eve. But when will they leave? Even earlier than the 24th of January. Keep in mind that at about one week upfront all factories close down.
3. Factory HR department issues
T
he way of transportation will influence the time of leaving heavily. Some will travel hundreds of kilometres by motorbike or go by car. A high percentage will travel by train. But due to limited availability of train tickets, when they “can” leave is based on for when they can get a ticket. Causing difficulties for HR departments of factories resulting in difficulties with production planning. They cannot ensure production, as they cannot ensure labour availability.
4. Lack of labour performance and availability
Causing situations that last orders are produced with 20% occupancy. If your order is one of the last productions of the factory, you can expect issues. Workers have less motivation to perform as a big part of their colleagues already went home. Besides, there are no workers available to solve your quality issues, if any.
5. Time management and product quality
To be able to inspect and control the quality of the produced products, you need time to execute inspections on-site. It is very likely that, due to lack of performance and available labour, your products will have a higher chance on quality issues than in other periods.
6. Time management to solve quality problems
The most time consuming, but necessary to ensure the quality and profitability of your business, is to solve quality problems. The factory will need a sufficient amount of time and labour to solve quality issues. If there is no time to solve quality issues, you will mostly be confronted with two choices.
- Compromise on the quality of the product, but shipped out before CNY
- Not accepting quality issues, cancelling the delivery before CNY and acceptance of at least one month of delay.
Both options are both damaging your profitability. Correct time management for the CNY period is therefore extra important. Bad time management can create situations that you have to accept a financial loss. As the factory will simply not be able to help you. Good time management here is key.
7. Negotiation position
When your production is pushed to the end of the Chinese year, you will have time urgency. When time plays a role in business, the negotiation position will fall. Your position to negotiate solutions, discounts or production output is weaker than ever. Because the factory knows that there is a high chance you will accept not compliant products and quality.
8. Booking scheduled boats
Without timely management of your production orders, you will push your loading and shipping dates to the limit. As there are many companies not on point regarding their time management, you will have a major competition to catch those containers on those last boats. Normally boats are already fully booked a few weeks upfront. That makes this period creates conflicts in your management. On the one hand, you will need to focus on the factory having enough time and labour to solve possible quality issues. While on the other hand, you will most likely fix a shipping date.
9. Factories their time management strategy
In general, it is a strategy we see at many factories to push delivery times until the end. By pushing delivery times until the maximum, buyers are pushed into the position of accepting quality problems or other issues found in production. You can manage this by having enough margins in your planning.
As long as the factory is not aware of your margins, they cannot hit the limits of your planning. However, with Chinese new year the planning its limit is transparent. If your production is due to be produced in the close period before CNY, the factory has the advantage to delay until there is no time to solve quality issues anymore.
Time management for the Chinese New year period is therefore key to protect profitability. It has major relations with product quality, your negotiation position and more. Making time management for CNY more important than any other subject involved.