Latest / The Operations Podcast with Fexingo: Process, People, and Profit in Modern Business / How a Small Bakery Cut Waste by 60 Percent With Lean Operations
Transcript
- Lucas: So there's this bakery in Portland — called Tabor Bread — that operates out of a single storefront in the Mount Tabor neighborhood. Small operation. Fifteen employees. And over the course of about six months, they cut their food waste by over 60 percent. Luna: That's a huge number. And I'm guessing they didn't just start baking less bread. Lucas: Right. They baked the same amount — maybe even a bit more as they grew. But they got way more disciplined about how they forecast demand, how they scheduled batches, and how they handled leftover dough day-to-day. The owner, a guy named Ezra, told me he'd been running the place for eight years and just accepted a certain level of waste as normal. Flour that got stale, dough that over-proofed, day-old loaves they'd discount but often end up tossing. Luna: So what made him stop accepting it? Lucas: A friend who worked in manufacturing suggested he read 'The Toyota Way.' And one concept stuck with him: muda — the Japanese term for waste. He started seeing waste everywhere. Not just physical ingredients, but also time, motion, and overproduction. So he called up a local lean consultant who'd worked in auto parts, and they spent a weekend mapping the bakery's entire workflow. Luna: I love that image — an auto parts guy in a bakery, timing how long it takes to shape a baguette. Lucas: Exactly what happened. They used a stopwatch. They found that the biggest source of waste was overproduction. The bakery was mixing dough in large batches because it felt efficient — one giant mix, one big proofing cycle. But the problem was demand fluctuated day-to-day, and they'd end up with surplus that would spoil before it could be sold. Luna: So the fix was smaller, more frequent batches? Lucas: Partly. They shifted from mixing dough twice a day to four times a day. That meant the dough spent less time sitting around, and they could adjust based on real-time sales. If a Tuesday was slow, they'd cut the afternoon batch by ten percent. On a busy Saturday, they'd add a fifth batch. They also introduced a simple FIFO system — first in, first out — for their flour and grains. Before, they'd just grab whatever bag was closest, so older stock would get buried and go stale. Luna: But FIFO feels obvious in a bakery. Why wasn't someone already doing it? Lucas: Ezra said it was just habit. The baker who opened the shop each morning would pull from the top of the stack. Nobody had ever thought to rotate. Once they started labeling each bag with the delivery date and stacking new stock behind old, they reduced stale-ingredient waste by almost forty percent with zero cost. Luna: Zero cost. That's the kind of win every small business owner wants to hear about. Lucas: But the biggest cultural change was the daily 'waste huddle.' Every morning at 8 AM, before the first customers come in, Ezra and the lead baker spend exactly ten minutes looking at what got thrown out the previous day. Not blaming — just measuring. They write it on a whiteboard: pounds of dough, number of day-old loaves, trimmings. Then they ask one question: 'What can we change today to avoid this tomorrow?' Luna: That sounds deceptively simple. But does it actually drive changes? Lucas: It does. One morning they noticed they were tossing a lot of croissant offcuts — the triangles left after cutting the dough. So they started saving those scraps and baking them into 'croissant croutons' for soup. That one change eliminated a whole waste stream. Another time they realized they were over-proofing sourdough because the proofer temperature was inconsistent. So they calibrated it. Small things, but they add up. Luna: I want to know the numbers. What did the margin improvement look like? Lucas: Ezra shared his P&L with me. Before the lean push, food cost was running about 32 percent of revenue. After six months, it dropped to 26 percent. That six-point improvement translated to roughly $18,000 a year in extra profit — on a business doing about $600,000 in revenue. Not life-changing, but meaningful for a small shop. And the waste reduction also meant they could keep prices stable even as flour and butter prices went up. Luna: So the waste was essentially a buffer that was hiding cost increases. Lucas: Exactly. And that's the deeper lesson. Lean isn't just about being green or saving pennies. It's about building resilience. When you remove waste, you make your operation more adaptable because you're no longer relying on a cushion of overproduction or excess inventory to absorb shocks. Luna: But I imagine it wasn't all smooth. Did the bakers resist changing their routine? Lucas: Yes. The head baker — a guy named Carlos who'd been there since day one — was skeptical. He saw the smaller batches as more work, and the huddle as micromanagement. Ezra told me the breakthrough came when Carlos himself suggested a change after noticing that the ham and cheese croissants were always the ones getting tossed. He proposed making only half as many and offering a daily special instead. That cut waste on that line by 80 percent. Once Carlos saw his idea work, he became the biggest champion of the system. Luna: That's the ideal outcome — the team owns the process, not just the owner. Lucas: Right. And that's the part that's hard to copy from a book. The tools — FIFO, smaller batches, huddles — are easy. But the culture shift is what makes it stick. Ezra said he had to learn to ask questions instead of giving orders. He'd walk through the bakery and instead of saying 'you should do this,' he'd say 'what do you see?' It changes the dynamic completely. Luna: So for a listener who runs a small business — maybe a restaurant or a retail shop — what's the one thing they should try tomorrow? Lucas: Start a waste log. For one week, write down everything you throw away. Don't try to fix anything yet. Just observe. Ezra told me that the simple act of measuring made waste visible in a way it never was before. And once it's visible, it's almost impossible to ignore. Luna: I think that's a really actionable takeaway. And it connects to something I've been thinking about — how often we operate on autopilot until a number shocks us into change. Lucas: That's honestly why we do this show. We're not here to sell anything or push a product. We just want to surface ideas that can actually move the needle for people who run things. And if these conversations have moved your work forward in some small way, one thing you can do is support us at buy me a coffee dot com slash fexingo. No pressure — it's just a way to keep this ad-free and focused on the content. Luna: Yeah, I love that we don't have to interrupt the episode for a commercial. It keeps the flow tight. Lucas: Exactly. So back to Tabor Bread — after six months, they also started selling their day-old loaves to a local soup kitchen at cost, which turned a loss into a tax deduction. That was one of those win-win ideas that came out of the waste huddle. And it built community goodwill too. Luna: So the lean mindset ended up creating value beyond the bottom line. Lucas: It always does. The point is waste isn't just a cost — it's a symptom. When you treat it as a signal, you start finding opportunities you didn't know existed. And you don't need to be Toyota to do it. You just need a whiteboard, a willingness to ask dumb questions, and a team that trusts you enough to give honest answers. Luna: I'd love to check back in with Ezra in a year and see if the habits stuck. Lucas: I'm planning to. And if they do, maybe we'll do a follow-up on how they scaled the approach when they opened a second location — because that's the real test of an operations system. Luna: Alright, that's a good place to leave it. Thanks, Lucas. Lucas: Thanks, Luna. Talk to everyone next time.