Case Study

SCOR Early Adopter Ericsson AB

Continues to Benefit From the
Tool 15 Years Later

Aligning supply chain processes Goals

̥̥ Increase efficiency of supply chain processes and
with SCOR enables Ericsson AB IT development
professionals to achieve a unified, ̥̥ Utilize a neutral and consistent set of definitions,
optimized and digitized global metrics and standards
̥̥ Establish a cross-functional framework of defined
supply chain. processes, practices and skills across the enterprise
̥̥ Strengthen management’s understanding of supply
chain performance

Approach
̥̥ Make a long-term commitment to implement SCOR
̥̥ Re-brand internal supply processes and align job
descriptions to correlate with SCOR
̥̥ Conduct SCM “awareness sessions” for employees
to strengthen their understanding of supply chain
performance
̥̥ Utilize SCOR scorecards and performance measurement

Results
̥̥ Global supply chain cost alignment
̥̥ Business warehouse design allows faster delivery of
tangible solutions
̥̥ Alignment of development efforts based on a neutral
reference model
̥̥ Capital reduction from well-designed supply solutions
resulting in lower capital expenditures, which supports
Ericsson’s overall business strategy
̥̥ Reduce the time and cost to prepare quotes for
customer contracts, going from weeks to days
Global telecommunications technology and services leader “Being able to activate the most relevant
Ericsson AB was one of the early adopters of the Supply Chain
reports transformed Ericsson’s level of
Operations Reference (SCOR) model. The company began using
SCOR in 1997, just one year after its development; SCOR then was
supply chain insight.”
applied more formally across Ericsson’s global networks beginning
Ericsson held its first official in-house SCOR training in
in 2004. In the years since, SCOR has evolved to become the
2005, which led to continued progress in supply chain and
foundation of Ericsson’s global outbound supply chain strategy. In
sourcing processes as well as in information technology (IT)
fact, it is so integrated in the company’s supply chain culture that
development. The model provided a common set of definitions
no one employee or team is tasked with managing SCOR as a
and standards for team members who had been struggling
standalone part of his or her day-to-day activities.
with communications, particularly across continents.
Shortly thereafter, Ericsson rebranded both internal supply
“We do not need to highlight SCOR itself, as it has grown into our
processes and job descriptions to correlate with SCOR. This
supply chain DNA,” says Lars Magnusson, SCOR-P, the business
made it much easier to link training opportunities to the
architect at Ericsson who led the SCOR implementation efforts.
requirements of certain roles and responsibilities. Employees
“We have moved from a program-driven structure for specific issues
would be invited to take part in SCOR, APICS Certified in
to the applied use of SCOR in all supply chain processes and
Production and Inventory Management or APICS Certified
business-development activities.”
Supply Chain Professional training, depending on their
particular job functions.
Today, SCOR enables Ericsson to make significant, long-term
performance improvements. By fully adopting the architecture
The following year, the business began using SCOR skills
and actively employing scorecards for performance measurement
definitions to develop internal roles and responsibilities. Then,
and benchmarking, the supply chain organization has achieved
in 2010, Ericsson restructured its SAP platform to align with
enhanced operational control, improved data quality, more efficient
SCOR Level 2 terminology (make-to-order, make-to-stock and
measurement and technology solutions, and meaningful bottom-line
engineer-to-order). More recently, the SCOR Project Model
improvements.
“racetrack” has been used to create an aligned delivery
governance model for the large-scale, project-driven business.
The Early Adopter The front-loading of the process with early supply chain
Ericsson leaders first decided to implement SCOR in order to preparation is intended to deliver both capital and execution
standardize metrics across the global outbound supply chain. cost reductions.
While the methodology brought about immediate improvements,
this preliminary effort was somewhat limited by the company Ericsson also is actively developing the Design Chain
failing to fully apply the process portion of the model. Operations Reference, Customer Chain Operations Reference,
Product Life Cycle Operations Reference and Managing for
Fast-forward several years, and the need for greater structure and Supply Chain Performance frameworks from the APICS
metrics consistency was at the forefront once again. Ericsson enterprise model portfolio. Currently, all are being tested as
decision-makers then chose to no longer be passive SCOR users, part of the business architecture for the Ericsson group.
but to fully embrace the solution and all its possibilities. Ericsson
then introduced SAP Business Warehouse to its supply chain.
After 18 months of designing everything from raw data extractors A SCOR-Centric Supply Chain
to the graphical presentation layer, the business had the ability Ericsson employees report that the greatest benefits are the
to create a single report. It was a valuable piece of knowledge, holistic supply chain understanding SCOR has given them
but so slow to load and inflexible to work with that its utility and the ability to work from a common point of reference. As
was compromised. terminology and related issues are standardized, the internal
process-development community also has grown more unified
But when SAP incorporated SCOR metrics into its new product as team. Now, collaboration happens quickly, so there’s no need
release in 2004, suddenly the business had access to a repository to start from scratch on every project.
of SCOR-based reports spanning source, make, deliver and return.

1 ASCM Case Study: Ericsson

“Before SCOR, valuable time was lost
defining supply chain basics.”
Ericsson professionals also note the advantages of aligning
technology-development efforts from a neutral and consistent
model and establishing a cross-functional framework of defined
processes, practices and skills. These advantages have helped
them complete projects faster and bring about significant
savings. Furthermore, both formal and informal SCOR
benchmarking enables the business to compare performance
data to that of its customers, suppliers, competitors and others
within the APICS community. “The SCOR-based alignment
has been a significant enabler for our global supply chain
management strategy,” Magnusson says.

Training and Awareness

Ericsson has enjoyed positive results from both on-site SCOR
training with APICS and public courses led by APICS partners in
Paris, Malmo, Dubai and Atlanta. To date, more than 100 supply
chain employees have completed SCOR training and 20 have
earned SCOR-P endorsement. One employee has been certified
as a SCOR instructor and will oversee the in-house training
going forward.

The company also holds supply chain management awareness

sessions to strengthen people’s understanding of supply
chain’s impact on overall company performance. More than 600
Ericsson employees — plus external audiences such as large
customers and development partners — have participated in
these sessions to date, further demonstrating that alignment
under SCOR significantly improves the speed of change.

Ericsson continues to broaden its use of SCOR and the SCOR

Project Model, and even more advancements are on the
horizon: Currently, the business is participating in the testing
and development of a SCOR digitization project. Once the work
is mature, Ericsson leaders look forward to formally introducing
the new digitized solution.

ASCM Case Study: Ericsson 2

About ASCM
The Association for Supply Chain Management (ASCM) is the
global leader in supply chain organizational transformation,
innovation and leadership. As the largest non-profit association
for supply chain, ASCM is an unbiased partner, connecting
companies around the world to the newest thought leadership
on all aspects of supply chain. ASCM is built on a foundation of
APICS certification and training spanning 60 years. Now, ASCM
is driving innovation in the industry with new products, services
and partnerships that enable companies to further optimize
their supply chains, secure their competitive advantage and
positively impact their bottom lines. For more information,
visit ascm.org.

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