Supplier Diversity Development Supplier Diversity at Lilly

Supplier Diversity Development Company Confidential Copyright © 2009 Eli Lilly and Company Why is Supplier Diversity important for Lilly? Compliance – Lilly is a federal government contractor –We have small business spend goals to meet Competitive Advantage/Business Imperative –Diversity fosters creativity. Creativity drives innovation. –Innovation leads to business success –Individual patient outcomes –We need the BEST! Key piece of the puzzle to Lilly’s corporate diversity strategy –Enables us to effectively market our products to a diverse market place

Supplier Diversity Development Company Confidential Copyright © 2009 Eli Lilly and Company What is 2 nd Tier? Any supplier, regardless of type or size, that is contracted through a 1 st tier supplier to Lilly.

Supplier Diversity Development Company Confidential Copyright © 2009 Eli Lilly and Company Why partner with Lilly on 2 nd Tier? We cannot do it alone – We need the unique opportunities that YOUR company can provide to qualified small/diverse businesses Left un-addressed, these challenges will diminish competitive access to opportunities for qualified small/diverse businesses We view YOU as our partner willing to share the responsibility to ensure growth in the market place Your partnership will strengthen our supply chain management process and increase both our competitive advantage

Supplier Diversity Development 2 nd Tier Process at Lilly

Supplier Diversity Development Company Confidential Copyright © 2009 Eli Lilly and Company Objectives  Address frequently raised concerns on 2 nd Tier  Identify the two methods of 2 nd tier reporting  Diverse categories we track for 2 nd Tier  2 nd Tier process

Supplier Diversity Development Company Confidential Copyright © 2009 Eli Lilly and Company 2 nd Tier – Top 4 concerns from 1 st Tier Supplier  Do not understand the importance of 2 nd Tier to Lilly  Do not understand Lilly’s 2 nd Tier process  Do not have the ability to track 2 nd Tier spend  Do not know who the potential 2 nd Tier diverse suppliers are in their space

Supplier Diversity Development Company Confidential Copyright © 2009 Eli Lilly and Company 2 nd Tier Reporting – 2 Methods  Direct List the spend $$ and names of small and diverse suppliers that you subcontract with on Lilly business  Indirect Determine what percent the Lilly sales revenue is to your overall sales and then multiply that percentage by your diversity spend amount

Supplier Diversity Development Company Confidential Copyright © 2009 Eli Lilly and Company Direct 2 nd Tier Direct 2 nd Tier Subcontractor's Name Q1 Q2 Q3 Q4 MBE (Names of subcontractors used for Lilly Projects) $ - (Insert additional lines as necessary) TOTAL MBE SPEND $ - TOTAL MBE YTD $ -

Supplier Diversity Development Company Confidential Copyright © 2009 Eli Lilly and Company Indirect 2 nd Tier Indirect 2 nd Tier Quarter 1Quarter 2Quarter 3Quarter 4Total Your Company's Total Sales Revenue 0 Sales Revenue from Lilly Business 0 Revenue from Lilly Business as a Percentage of Your Company's Total Revenue#DIV/0! Amount Spent with Diverse Suppliers by Your Company by Category* Minority Owned 0 Woman-Owned Business Enterprise 0 Small Business 0 Small Disadvantaged Business 0 Woman-owned Small Business Enterprise 0 HUBZone Business 0 Veteran-owned Small Business Enterprise 0 Service Disabled Veteran-Owned Small Business 0 Total00000 Indirect Spend Attributable to Lilly Business by Category Minority Owned#DIV/0! Woman-Owned Business Enterprise#DIV/0!

Supplier Diversity Development Company Confidential Copyright © 2009 Eli Lilly and Company Definitions for Diverse Categories SBESmall SDBSmall Disadvantaged Business WOSBWomen-Owned Small Business VOSBVeteran-Owned Business SD-VOSBService Disabled Veteran-Owned Small Business HUBHUBZone Business MBEMinority-Owned Business WBEWoman-Owned Business

Supplier Diversity Development Company Confidential Copyright © 2009 Eli Lilly and Company 2 nd Tier Process….  notification from Lilly to 1 st Tier suppliers requesting 2 nd Tier spend Send last week of the quarter Lilly provides 2 nd Tier Templates Submit 2 nd Tier spend data by 24th of the following month  Lilly compiles the 2 nd Tier data  Tracks 2 nd Tier spend by supplier and report internally