If you need something to be performed systematically you need to follow some rules and guidelines. Similarly Scorm is also a set of rules and standards to be used by e learning products. It tells programmers to write their program code so that they can also compatible with other e learning softwares. Specifically Scorm helps in communication between online learning content and learning management system.  It is a technical design and has nothing to do with the instructional design and pedagogical concern.

Example to understand the concept

Lets take an example of DVD player and DVD's, when you purchase a DVD you are not concerned with the purchase of DVD player as your prospective DVD can be played on any DVD player irrespective of its brand e.g. Toshiba and Sony. This is because of the fact that each DVD is manufactured on the basis of some rules that make it compatible  with every type of DVD player if this was not the case than  people has to purchase different DVD players for their DVD or only those DVD to be purchased that can be played on  the existing player.

Who can produce Scorm?

You can not produce a scorm. The authority is only given to the research group in unites states of America sponsored by department of defence. An independent company Rustici is helping other companies in becoming scorm conformant.

Scorm stands for

It stands for "sharable content object reference model"

Sharable content object means learning material that can be shared across systems and Scorm standards helps in creation of SCO that can be reused in different systems.

"Reference model" means that scorm is not based on standards that are newly built and developed bur there were some rules that already exist in market and scorm only refer to those rules and tell the programmers how to use and interact with them.