Effect of China's holidays on the global supply chains

Filed in archive General on January 14, 2008

Recently The Chinese Central Government modified China's national holiday schedule. In 2008, the holiday falling the first week in May will be reduced from seven days to three.

Some industry experts in supply chain management believe even though this might seem a really simple thing, it would have great impact on supply chain planning for far east.

One important consideration from Bradley Feuling's point of view (He is a logistics expert and CEO, Kong and Allan, LLC) is Change in Forecasting Models. The key is in future forecasting models, which we commonly see are derived from previous year planning. If previous years accounted for the holiday, how will 2007 forecasts be used or modified?

"When we look at this scenario, demand planning independent of other factors should remain relatively consistent. This data is based on marketing and sales estimates. What has changed is procurement and operations management or translating these demand figures into production. In this scenario, orders placed prior to the previous holiday should modify lead time forecasts. Importantly however, this must change based on the manufacturers inventory policies. Again, working with suppliers on their inventory management policies and downstream procedures will be critical." according to Industry Week.

What other factors do you think we should take into account?