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Thread: China eliminates May holiday

  1. #1
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    Default China eliminates May holiday

    The Chinese national government recently announced the May national holiday will no longer be observed. This means businesses will now be required to remain open during the first week of May starting in 2008. With this change however, a few single day holidays will be added during the year. Here are just some of my initial thoughts on the impact to global and local supply chains. Other considerations are as always welcome.

    What does this mean for the supply chain? With the recent changes, production and planning schedules should adjust to revise previous lead time and inventory estimates and requirements from March to June, depending on the product. As this previous downtime, in most cases, will no longer exist, companies can better stabilize their demand planning following the Spring Festival holiday in February (February 7-13, 2008).

    With summer product line production, we should see lower inventory levels around March/April and increased flexibility to respond to actual customer demand. In this sense, some business models may shift to account for this change. Early season product testing in smaller batch sizes can allow for production shifts as customer buying habits are determined. Without the May holiday, higher inventory does not need to occur prior to the season, lowering the costs of obsolesce and promotional discounts.

    Demand scheduling as well should stabilize, as the risks of receiving delayed product should be reduced. The important point is to account for this shift. If previous year forecasts are utilized for 2008 planning, there will undoubtedly be added costs and demand planning will inaccurately synchronize with a manufacturers revised production schedule.

    Other things to consider are the now lengthy duration between the two remaining major Chinese national holidays in February and October. As the summer will drag on, we can see the potential for productivity/quality declines in the later part of the summer due in part to fatigue/employee welfare. With the change in upstream scheduling, downstream raw-material and work-in-process inventory will also have to adjust. With limited real supply chain knowledge in downstream operations, we do see costs continuing to rise based on the initial change and increased variability instead of stabilization. These two factors will most greatly impact the Western holiday season demand scheduling in August/September. Also, we must consider, although this will only occur in a limited number of cases, the companies that choose to continue observing the national holiday by defying the new policy. In this event, these companies will dramatically effect the upstream operations creating a greater potential for variability in production scheduling, lead time, and inventory management.

  2. #2
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    Default Re: China eliminates May holiday

    I am just trying to wrap my brain around the idea that China just eliminated a holiday like that. I don't know how important the May holiday is in China, but I know that if suddenly the U.S. decided to eliminate a holiday there would be rioting in the streets. Even a lame holiday like Columbus Day would be the source of a lot of trouble if it went away.

    I suppose this is a month-long holiday? Either way I think I might be wary about doing business in China in the next few years, especially around May when disgruntled workers will be doing all they can to sabotage the operations.

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    Default Re: China eliminates May holiday

    These are events that may easily be instituted without any resistance by regimes such as that in China without any resistance. I doubt if whether this could have happened in a Western country without there being some form of protest. The closed-type political regime which prevails in China ensures that government usually has a free hand in instituting whatever policy it decides without much uproar. I can still remember that Tiananmen Square situation many years ago. The government has an important strategy that it's seeking to introduce and they are seeking to use it to maximize the benefits which that period could bring to the country.However, the workers would only be getting back a small portion of the usual time-off that would have been allowed later in the year and I know there should be many disgruntled workers, but I doubt if they would try any means of sabotage or protest.

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    Default Re: China eliminates May holiday

    Well that's China for you, is my first thought when reading about this news. Here in the UK I very much doubt if the government here would be able to get away with doing something like this, but in China it seems that the government can get away with doing anything it want's with no backlash.

    I can see why the Chinese government have done it, but I have to say that I'm not sure if I actually agree with it, and I know that if I was employed in China, I wouldn't e happy that all of a sudden one of my holidays as just all of a sudden ceased to exist.

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    Default Re: China eliminates May holiday

    I understand that holidays have a direct effect on business because I notice my businessmen friends to scramble for supplies a month before the Christmas season in order to fill up their inventory in preparation for the surge of sales. But with a holiday that is not declared anymore, I don't think that one day will have a major effect on business. But in fairness to the workers, they have lost the holiday pay and their earning for that day is just the regular pay. For the company, it is an advantage since they have been freed of the holiday pay.

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    Default Re: China eliminates May holiday

    To be honest I think that the only country in the world that could get away with doing something like this IS China. Just totally getting rid of an holiday in a country like the UK or the US simply couldn't happen because for one thing the employees rights are better protected than they will be in a country like China to start off with.

    Businesses still rule in places like China, whereas in other countries the employees rights are looked after just as well as the actual companies so even if something like this was to happen there would be that much of an uproar that it would soon be overturned and the holiday would be restored. In countries like China if the employees don't like something then it's tough and they just have to get on with it.

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    Default Re: China eliminates May holiday

    Quote Originally Posted by pwarbi View Post
    To be honest I think that the only country in the world that could get away with doing something like this IS China. Just totally getting rid of an holiday in a country like the UK or the US simply couldn't happen because for one thing the employees rights are better protected than they will be in a country like China to start off with.

    Businesses still rule in places like China, whereas in other countries the employees rights are looked after just as well as the actual companies so even if something like this was to happen there would be that much of an uproar that it would soon be overturned and the holiday would be restored. In countries like China if the employees don't like something then it's tough and they just have to get on with it.
    As you have rightly put it this kind of development will be resisted in other more developed countries of the world. It's like when it comes to that part of the world it's a different system all together. I'd also think the business or labor associations should react to this new change.

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