Understanding Chinese New Years

ASCERA Order Pipeline - Chinese New Year - Year of the Ox - February 12, 2021

Odoo • Image and Text

We are once again at that time of the year, where we encourage our clients to speed up their ordering process for the upcoming Chinese New Year CNY 2021. One may wonder, what’s the fuss about an event that’s nearly 3 months away, in February 2021? For most of us, the CNY is synonymous with getting together with family, eating dumplings, and the red lanterns. This post goes into behind-the-scenes about what happens when you place your vape or packaging order with FTL Distribution, how the CNY impacts our supply chain, and how you can be best prepared. 

CNY, also called the Spring Festival, is the most important holiday in the Chinese culture since time immemorial. The CNY is based on the lunar calendar, which varies every year. This further adds a level of complexity to sourcing and logistics operations, not just for the cannabis industry, but all clients that rely on Chinese factories for their supply chains. Most of the factories in China, are located in the relatively urbanized and well developed coastal regions to the South and East of the country. The workers, most of them migrants, come from far flung interior villages and towns, in the North and West which are relatively underdeveloped and have much fewer employment opportunities. For them, the CNY is the first and only time when they get to go home perhaps in a year. - back to their families and friends, for 2 weeks. Salespeople and shop floor workers get bonuses alike, in red envelopes called ‘HongBao’ with which they buy gifts for their families back home. This event also holds a significant emotional and cultural place amongst the Chinese people and culture. This event also breaks records with every passing year, for the biggest human migration in history, with several billion trips being booked by land, air, or sea.

Odoo • Image and Text

1 week holiday with a 4 month implication

The legally mandated holiday by the government is just 1 week. However, the reality is far different. Factories will begin to close in early January 2021, and get back to normal in late February 2021. However, the supply chain is affected beginning December 2020 and as late as March 2021. Staff such as accounting and sales are normally off for 2 weeks, but labour responsible for production are off for a minimum of 4 weeks. Most employees also “accumulate” other holidays by working throughout the year, and then utilizing them during this time.

FTLD’s facilities are working overtime at the moment, both planning for raw materials and production scheduling, and packing and logistics scheduling. Our shop floor also prioritizes the workload from the biggest order first in the queue to the smallest order at the end, while ensuring the best and same QA QC for all orders, no matter how big or small. Demand for raw materials starts going up, and so do shipping quotes for sea and air, because most clients want to get in their orders before the CNY. During the holidays, many salespeople and workers also find new lucrative opportunities, through their friends and family, in a city closer to home. 

Forecast Sales for your vape tanks and batteries. This may be difficult since it’s a timeline over the next 3-4 months, but the more accurate the forecast, the better it is for you and FTLD. No more selling out, chasing back and forth for design changes, following up for delayed or stuck shipments during the 4 month period.

Place Larger Orders and Early with FTLD. Raw materials and shipping costs fluctuate wildly during this 4 month period, both before and after. By doing this, stocked materials  can be maintained at best levels, without firefighting.

Diversify and Have a Plan B with multiple SKUs. During this time, we suggest ordering at least 2 SKUs and test launching new vape products. This can mitigate potential issues with shortages for the specific colour, material, finish et al of the raw materials.

Getting Back to Normal presents a new set of challenges. One of the biggest challenges is that many of the workers do not come back to work due to a closer factory to their hometown, or being offered much more lucrative opportunities. Also not all workers return at the same time, but in batches, making the production scheduling difficult and readjust to the pre-CNY position.

Odoo • Image and Text

Planning and Preparation for Your Vape and Packaging Inventory

FTLD is adept and agile to effectively navigate and mitigate the potential challenges that our clients may face during this 4 months from beginning of November 2020 to end of February 2021. In order to have your vape hardware and packaging orders smoothly without any hassles, we urge you to rush in your orders latest by November 30’th.

November 2020 - Plan for your supply

Finalize your artwork, custom material/finish/colour, pay the deposit, and mutual sign off on design/production agreement by client and FTLD.

Peruse design proofs, communicate with FTLD about changes/editing a max of 2 revisions, final PO sent by FTLD to factory.

Formalize and finalize any/all supply needs for products BEFORE the start of CNY (January 29’th)  by 30’th November so that raw material acquisition and production planning can occur to service this need.

December 2020 - Place Deposits and schedule production time for when the factory opens to resume supply immediately.

Forecast purchasing needed for the end of CNY (March 15’th) and place a deposit on the raw materials.

Submit factory reopen orders by
30’th December 2020, so that production planning and raw material sourcing can be accomplished before the start of the CNY Holiday on 1’st February, 2021.

January 2021 - Final orders are shipped before CNY

Last chance to change order details 5’th January, 2021

Last PO will be sent by FTLD to the factory on 10’th January, 2021

Last pre CNY shipment departs our factory for Canada/USA on January 29 2021.

All orders accepted, but shipping can only begin as early as 15’th March 2021, as long as materials were sourced before the holiday. Peruse design proofs, communicate with FTLD about changes/editing a max of 2 revisions, final PO sent by FTLD to factory. Production will start in the end of February 2021.

February 2021 - CNY

Most workers take time off 1’st February

Last working day is 10’th February (factory closes officially), but production is greatly diminished between 1’st and 10’th.

Workers begin returning, factory comes back online ~ 50% capacity by 26’th February 2021, 100% capacity by 3rd March, 2021.

March 2021 - New Production

First possible shipment after CNY is on 18’th March, 2021

Follow The Leader Distribution Co. Ltd. is fully stocked with all strategic SKUs so you can focus on your business and customers without delays or stockouts! ASCERA vape hardware or mylar bags, CR box packaging or glass syringes, we’ve got your production line covered before-during-after CNY 2021!

Call our sales reps at 778-244-8303 or email us on info@ftldistribution.ca and place your pre CNY orders today!