With the hope that you have understood the concept discussed in previous lectures, let us proceed now, with lecture for organization drivers and matrix you can see the corresponding B okay reference on the screen. Well, the learning objectives are to recognize key driver of business and how key metrics and scorecards are developed as well as its impact on the entire organization. I hope that you might have heard about Forbes Global magazine, fortune 500 magazine, etc. They come out with a list of outstanding companies in the world in terms of business performance, how does they conduct it? Certainly, there should be some performance measure that could be compared with each other Well, those are performances, measure and metrics chosen by organization by which they could measure or reflect the success of business strategy they adapt. Often organization use piles of metric.

Some even doesn't have any purpose or link, whether strategy or success. However, this is not the case of outstanding enterprises. They always select appropriate key performance indicator or KPI for measuring their success, they have it in the form of an executive dashboard, reflecting the deviation from objectives, or ensuring they are at the required speed and desired direction. Similarly, to a driver using the dashboard metrics to control the speed direction of his vehicle fine. The key performance indicator KPIs could be both financial and non financial metric. It is also known as critical success factors in order to have an effective monitoring of the business and organization should keep in mind while defining the KPIs that the KPI are in measurable or quantitative terms.

And also, there are some process related and strategy related measures in it, as well as time bounded. The best way of defining KPIs are based on the balanced scorecard approach. The balanced scorecard approach developed in the early 1990s is the benchmark for defining KPIs for any organization balance scorecard separates organization metrics into four perspectives, namely financial prospective, customer prospective, internal process prospective learning and growth perspective in financial and organization could measure its success by assessing its returns on investment returns on capital, return on equity and economic value added. Similarly, the customer perspective metrics could be customer satisfaction level, customer retention rate, reference rates, quality, timely delivered etc. for internal purpose prospective defects rate, cycle time, throughput rates, quality percentage timely delivered etc. for learning and growth, the metrics could be absentee rate, employee satisfaction, turnover rate, and internal promotion etc.

However, the metrics we discussed could only be considered as a starter set, organization could add more onto it appropriately. Organizational metrics do not end with KPIs or metrics down to the individual process level may be required to support KPIs and to provide deep, meaningful and actionable insight for organizations to effectively conduct and run their businesses. How to Six Sigma as a metrics aligned with the internal process prospective of balanced scorecard, Six Sigma metrics provide benchmark for defect rates and quality respectively, as 3.4 defects per million opportunity or 99.99966% of accuracy. Often we accept an accuracy of 99%. But Ever wondered, what does the accuracy mean? accuracy of 99% means we are making 10,000 defects in 1 million opportunities.

This is unimaginable accuracy for companies striving for growth or a process that operates as Six Sigma capability, only 3.4 defects in million opportunities to take it further. Astonishing facts of 99% accuracy and 99.99 966 percent accuracy only thousand lost articles of mail or our were unsafe drinking water 15 minutes per day 5000 incorrect surgical operations per week and so on. This is same as what we have just discussed. Let us review the table that depicts the defects per million opportunities, dp mo accuracy and their corresponding sigma level for a process operating in one sigma level, the accuracy is just around 30% and 69,700 defects. For process operating three sigma accuracy is 93.32% and DP mo 6000. Finally, see the process operating in Six Sigma accuracy of 99.9966% and 3.4 dP mo fine, we have covered the stated objective asper be okay.

But it's time to move forward to the next lecture on organizational goals and Six Sigma projects. Thank you