An idle machine or lab technician is a lost earnings opportunity. The incentive, then, is to fill those seats for any dollar amount. Once a plane takes off, all empty seats are lost potential revenue. The challenge is in anticipating increasing demand because of the long lead times required to increase capacity. At Xcelience, we find that in most cases, we can maintain a load around 70% without having to turn any customers away. Our industry lacks statistics regarding load capacity, and even if such figures existed, they would vary widely based on the equipment and service involved. A load factor of 70% would result in 21% being turned away.
#A fully booked flight vs an underbooked flight full
The airlines have compromised with a load factor of about 60%, at which point 7% of flights are full and unavailable. In our industry, more than in the airline industry, a client scorned due to lack of capacity is a client lost. But neither industry will ever achieve that ideal, because it means turning away customers when capacity is reached. The CDMO wants to run every machine, all day. The airline wants to fill every seat, every day. Like the airline industry, CDMOs suffer from capacity issues. And yet, when you scratch a little deeper, our industry flight paths are not so different. Most passengers switch airlines constantly based on schedules and routes a CDMO partners with a client for months or years at a time. Most of the planes you fly on cost between $200 and $300 million an Xcelodose costs $500,000. In my opinion, there is no industry more similar to ours. Let’s take a moment, then, to reflect on the similarities between the airline business and our own.
I spend a lot of time up here, and there’s a good chance you do too.
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