Brian McAvoy from InsideOutTrading.com compares Lexus's manufacturing consistency to profitable trading. He argues traders should invest in quality training and stick to consistent methods rather than chasing quick wins.
What you can learn from Lexis to make more money as a trader is brought to you by Brian McAvoy. That's me of InsideOutTrading.com There are a number of very valuable lessons that you can take from Lexus, the carmaker that will directly benefit you as a trader. You may not realize it, but the leaders of many successful companies will intentionally look at what the leading companies in other industries are doing. They do this specifically to see if there's something that they can take and apply in their own industry and gain advantage. This video will cover several things that Lexus applies that you can take advantage of in your trading. You may recall from a short while back that Lexus began using the slogan in their advertising the relentless pursuit of perfection. While the message is clear, Lexus is all about the highest quality. Back in the 70s, the Japanese cars had the position of being cheap and of considerably lower quality than their American competitors. This had a direct impact on their business. Their reputation was not good, which affected sales, profits and their selling price. Their scrap rates were high, rework costs were high, efficiency was inconsistent, production was inconsistent and profits were subsequently inconsistent and lower than desired. Their futures as carmakers was not particularly bright. It's tough to compete when you're on the low end and your operation has a lot of inconsistencies. What the Japanese learned from Deming, whom the Americans largely shunned, was that quality is really where business success is to be found. The Japanese have been focusing primarily on the short term, trying to make as much money as possible each month through running their machines every possible minute, buying cheaper materials, accepting inconsistent work from their people, accepting inconsistent production on their lines, skipping periodic maintenance, buying cheap equipment to make the cars, doing marginal repairs on broken equipment instead of fixing things right, cutting back on research and development, and cutting back on training. They discovered that this focus was the root of their problem. What they learned is to focus on the long term and give primary attention to consistency and quality in their management, their operation and in their day to day activities. They also learned that they previously had held an incorrect view of quality. They had been looking at it as a cost center. Such views as well, the better materials just cost too much, the better running equipment costs too much. We can't afford the downtime to fix the machine properly, just get it running. We can't afford the downtime for preventive maintenance. We can make this month look good by dropping the training programs, or we can cut labor by eliminating the quality inspectors. At the end of the process they learn that these costs that they had been associating with quality were were much lower than the cost of poor quality in their operations. They learned that they had been looking at the matter all wrong. Viewing those expenditures to produce good quality as costs and expenses. What they needed to do was change their perspective and realize that these expenditures were indeed very wise investments. Investments in quality are just that, money put into something to realize a return. By investing in the better equipment that would run reliably and produce more consistently, they would save both downtime and scrap. Same for buying better materials with which to make their cars. By investing the time and money to perform the periodic maintenance, the machines would also have better efficiency and consistency. By investing in training, their people would perform better and more consistently. Thus again lowering cost of scrap, rejects and rework. By standardizing procedures to the known best practices, then documenting them and training their workers, their their entire operation improves. Consistency is at the heart of the success of Lexus. By focusing on their operation with an intent of consistency, reliability and repeatability, and seeking continuous improvement, their quality continues to go up along with their reputation, sales and profits. Lexus now has a very respectable position as one of the best carmakers, in addition to providing its owners the security of being consistently and predictably profitable. Okay, so what does this have to do with trading? Everything. Trading is a business operation and your end goal is to make money both short term and long term. You have tools and equipment that you use to produce profitable trades, and you want production of high quality trades with a low scrap rate consistently over time. You have a trader that needs to be trained to do the best work possible and in a consistent, reliable and repeatable manner. So you want to focus on quality control because it pays handsomely. You want to focus on consistency and reliability. Focus on research and development. Focus on training and skill building. The biggest lesson that the Japanese learn and that Lexus has come to exemplify, is that you focus solely on making money. Short term, you'll struggle. Focus on quality and the money will come. Same goes for trading. Being a trader, business consultant and a certified quality engineer, I've seen it in action. It works. As a matter of fact, it works amazingly well. You are at the heart and soul of your trading business. Invest in yourself and the quality of your operation. You will see the benefits both short term and long term. In this brief video, you have seen how Lexus made a fundamental change to the way they do business and how it proved to be a wise decision for you to make it happen. In your trading, though, you will need more detail than what you have just received. If you want more on how to put quality into your trading to realize the benefits, visit the link below, visit InsideOutTrading.com ACPT and register for the webinar, which will show you how to achieve consistently profitable trading very intentionally and by design. If you enjoyed this video and found it helpful, please share it with your friends. Again, Visit the link InsideOutTrading.com ACPT we'll see you there. Cheers.
