Prepping for Potential EMS Disruption: 100-Day Countdown to Lunar New Year

Lunar New Year festivities begin on January 22nd, 2023. Globally, this is the largest annual human migration event on the planet, and it begins a long period of disruption in Asian electronics manufacturing.

Over half of global electronics exports come from countries celebrating the Lunar New Year, so you need to begin planning early. You will likely see some impact on your electronics sourcing, manufacturing, and delivery schedule even if you don’t produce within the APAC region. This is due to shifting manufacturing trends as companies look for alternative ways to keep production rolling.

You have 100 days left to prepare, so here are the top things to do now:

1. Build forecasts now. Forecasting what product you’ll need for the first quarter of 2023 will give you an advantage over your competitors in ensuring you have enough stock on hand to make it through LNY. If you provide an early forecast to your supplier or manufacturing partner, they will be able to better understand your needs in the coming months. This is especially useful if you work with a CM within the APAC region where some factories expect to lose a portion of their staff over the holiday and need to hire and retrain to meet after-holiday demand, leading to longer delays.

2. Increase inventory levels now. If you know exactly how much product you’ll need in Q1, increase your inventory levels as soon as possible. In the current environment of extended lead times for components, this may not be feasible, but if you can pivot your production and get inventory early, you’ll be well-positioned to meet customer needs. Ensure shipments are scheduled before mid-December to avoid shipping backlogs caused by factories trying to get products to customers before the holiday begins.

3. Invest in a more distributed approach to manufacturing to support your business. With a China-plus-one strategy, you can diversify your supply chain and reduce LNY pressure. It is possible to avoid some of the most impactful issues related to the Lunar New Year by moving some of your manufacturing to a secondary CM outside of the APAC region.

With MacroFab, you can minimize ties with overseas suppliers while taking advantage of North American manufacturing and flexible options across many factory lines located in Mexico, the United States, and Canada. This Lunar New Year, let our expert support team help you pivot production to meet your delivery deadlines. Want to know more about preparing for the upcoming Lunar New Year? We’ll be holding a live webinar on November 10th where our VP of Product Joey Rodriguez will answer your questions about the Lunar New Year and why you shouldn’t put off electronics manufacturing resilience planning. Submit your questions in advance to marketing@macrofab.com.