Statement of Work

Optimal Consulting Daniel Heronemus Wes Hiott Yang Lei Kristi Stiles Lex Xia Ericsson Inventory Management Region North America Supply February 17, 2014

Project Sponsor & Subject Matter Expert Cathy Allan Jeffery Preston

1. Introduction The Ericsson inventory management team is responsible for tracking the movement of inventory throughout the company. By making efforts to decrease inventory costs, the team provides quick and efficient solutions for internal and external customers. Optimal Consulting will be working with the client to enable additional reporting capabilities in a more accessible format at both the managerial and individual contributor level. 2. Project Business Direction 2.1 Project Background Region North America (RNAM) Supply is responsible for all of the North Americas inventory management, which as of February 3, 2014 consisted of $246 million in inventory. Ericsson RNAM Supply has recently begun using Tableau which reduced the time for compiling data from days to hours. This has allowed the RNAM Supply team to spend more time analyzing the data and improving their processes. 2.2 Project Statement RNAM Supply does not currently have usable metrics to monitor and evaluate performance of their inventory management systems. They currently have $40 million of inventory that has not moved in within 120 days and $5 million of which has not moved in over 365 days. Given the costs associated with storing inventory, there is an opportunity to make improvement by determining the most effective way to track inventory movement. Additionally, several key processes used by the organization are not formally document, which poses a process risk. 3. Project Scope Descriptions 3.1 Project Scope The primary objectives of the project are to document the process used for gathering inventory data; to suggest realistic inventory movement tracking goals by benchmarking data for inventory levels against industry averages; and to create a key metrics dashboard that can accurately depict inventory aging and the rate of inventory movement. 3.2 Project Deliverables Optimal Consulting will provide the following on or prior to completion of the project: Process documentation Industry inventory metric research Dashboard for reviewing key inventory metrics 3.3 Scope Assumptions Information provided about the processes should be accurate and exhaustive. The data provided should be restricted to Plant 2507. Additionally, it should include all of the data for Plant 2507. The clients Tableau programmer will be responsible for the coding of the document in the Tableau software.

3.4 Included in Scope Plant 2507 Data that is currently available for Plant 2507 Processes used to gather data for Plant 2507 Processes used to evaluate movement and rate of movement Process documentation up to level 3 Layout, key metrics, and graphical presentation of the dashboard 3.5 Excluded from Scope All other RNAM Supply locations Processes used to gather other data Processes used in other locations Any non-value added processes Technical design and coding of the dashboard Data mining Data warehousing Process design exceeding level 3 3.6 Scope Change Control Any change in scope will require the approval of the OC team. The implications of that change will be discussed and a majority decision on effects and expectations of the scope change will have to be reached before implementation of the change.

4. Project Plan WBS

WBS 1 1.1 1.2 1.3 1.4 2 2.1 2.2 2.3 2.4 3 3.1 TASK Initiation Team formation Initial meeting with Sponsor and SME Identify the scope of the project Statement of Work Planning Interview Process Map Draft Interview Research Benchmarking Metrics Execution Analysis of Data Draw conclusions and make inferences to help create metrics and dashboard information Update team, Sponsor, SME, and Professor on progress made regarding process map and data analysis Flush out the 'Determining Inventory Levels' process map to at least a Level 2 map Meet with project sponsor to determine other processes to be documented as deliverables Compare Ericsson to their competitors and note areas to be improved Using process map, data provided by client, and information from interviews - design and create a mock up of the dashboard. Begin work on the presentation to the client Update team, sponsor, SME, and professor on progress made regarding benchmarking, dashboard, and other pending process maps Finalize all documents, PowerPoint, and presentation materials Return any Ericsson proprietary data used over the course of the project Include detail of what was accomplished and how the deliverables can be implemented 2/17/2014 3/3/2014 0% Interview with sponsor, SME, and team members at Ericsson finalize the scope Initial drafting of 'Determining Inventory Levels' process Interview with SME to get information for the first process map Find best-in-class metrics for inventory management amongst Ericsson competitors 2/14/2014 2/17/2014 2/24/2014 2/17/2014 2/14/2014 2/24/2014 3/14/2014 3/3/2014 100% 0% 0% 0% Assigning responsibilities 1/27/2014 2/3/2014 Reduce information recived from sponsor to a concise scope 2/10/2014 2/10/2014 2/3/2014 2/3/2014 2/14/2014 2/17/2014 100% 100% 100% 100% TASK DESCRIPTION START END PROGRESS

3.2

3.3

3.4 3.5

Status Report 1 Process Map Development and Completion Interview for additional process mapping Analyze Benchmark Research

3/3/2014

3/3/2014

0%

3/3/2014

3/24/2014

0%

3/15/2014 3/4/2014

3/28/2014 4/7/2014

0% 0%

3.6 3.7

Dashboard Proposal

2/25/2014 4/7/2014

4/7/2014 4/21/2014

0% 0%

3.8 3.9 4 4.1 4.2

Status Report 2 Proposal Close Out Project Close Return of Ericsson Data Deliver Final Document

4/7/2014 4/21/2014

4/7/2014 5/12/2014

0% 0%

5/9/2014 5/12/2014

5/9/2014 5/12/2014

0% 0%

5. Project Organization and Team Responsibilities 5.1 Project Organization and Stakeholders Ericsson Inventory Management, Region North America Supply Cathy Allan- Project Sponsor Jeffery Preston- Subject Matter Expert 5.2 Project Sponsor and SME Responsibilities The project sponsor and SME are responsible for providing the OC team with data, process details, and other key information needed for successful execution of the project. They are responsible for providing feedback and guidance throughout the project to ensure client expectations are met. 5.3 Project Team Roles and Responsibilities Wes Hiott, Team lead- To collaborate with the team and sponsor to ensure direction of the project Kristi Stiles-To collaborate with the team and ensure the timeliness and progression of the project Daniel Heronemus- To provide analysis of the data and technical aspects of deliverables Lex Xia- To elaborate and strategize the team approach on a high level of work force, determine and monitor substantial impacts under our implementations to our sponsor and SME Yang Lei- To maximize productivity of the team and ensure quality of deliverables 5.4 Communication Plans External - Communication will be made with the project sponsor via e-mail at least once a week. Additional phone calls will be made as needed. Given the aggressive timeline for the project, it is crucial that responses to information requests are received within 48 business hours. Internal - The team will communicate through calls, email, and group meetings several times weekly. 6. Risks and Key Success Factors 6.1 Assumptions Ericsson will use the recommendations and deliverables to implement new inventory monitoring techniques to assist them in reaching their goal of being best in class in the area of inventory management. RNAM Supply and our sponsor will assist in understanding key processes and goals so that Optimal Consulting can make the best logical decisions and recommendations to help them reach these goals.

6.2 Project Team Needs Optimal Consulting will need specific details on how the deliverables should be structured. The team will also need timely responses to all communication and honest feedback on all questions. Fulfillment of these needs will ensure that the team provides the best solutions as effectively as possible. 6.3 Risks Timeline risk The project has a very short timeline to complete the required deliverables. The team will have to exhibit teamwork, dedication and remain cognizant of scope creep to ensure key project tasks are completed. Resource risk Data regarding key metrics used by competitors that is required for benchmarking may not be available. While the OC team will make every effort possible to obtain this data, as it is not within the direct control of the client or the OC team, we cannot guarantee its availability. If external data is unavailable, we will provide benchmarking recommendations based on previous years data from the client. 6.4 Key Success Factors Accurate depiction of the processes Benchmark data needs to be valid metrics to provide accurate analysis points The dashboard should be both aesthetically pleasing and user friendly 7. Project Hand-Overs 7.1 Hand-overs to Project Sponsor Research results for benchmarking levels Process documentation All work on dashboards Any Ericsson proprietary data that was used