For years, Silas ran his business on intuition. "The cost of doing business is the cost of doing business," he'd say, shrugging as he paid his gas and green coffee bean bills. His profit margins were shrinking, but he blamed the usual suspects: rising rent and fickle customers.
Gas consumption vs. Hours of roaster operation. The line was jagged and inefficient. "Silas, your head roaster, Giacomo, fires up the big 50-kilo drum roaster for every batch—even for a 5-kilo test batch of a new single-origin. That’s like using a freight train to deliver a letter. Your cost driver isn't 'pounds roasted.' It's 'number of batches, regardless of size.' " cost driver analysis
Across the river, Elena, the CEO of Aurora Beans, faced the same market. But while Silas saw a blur, Elena saw a series of levers. She practiced cost driver analysis . For years, Silas ran his business on intuition
Silas felt a cold dread. He wasn't losing to a competitor with better coffee. He was losing to a competitor who understood why costs happened, not just what they were. Gas consumption vs