When to build your supply chain function — and what to build first
Most early-stage biotech companies wait too long to build a real supply chain function. And the ones that don't often build the wrong things first. Both mistakes are expensive — one in crisis management, the other in rework.
The moment most companies realize they have a problem
It usually happens the same way. Clinical trials are running. A CMO relationship is in place — or several are. Someone on the ops team is managing supply chain alongside three other jobs. Things are moving. Then something goes wrong: a batch fails, a shipment is delayed, a supplier misses a deadline, or an IND filing surfaces a gap in your documentation. And suddenly the supply chain problem that felt manageable becomes the most urgent thing in the building.
By that point, you're not building a supply chain function. You're triaging one. Those are different activities with different costs.
The better question isn't "when did we realize we had a problem?" It's "what would have told us earlier?" The answer, almost always, is that the signals were there — informal processes, unclear ownership, reactive planning — and the organization didn't have a framework for reading them.
When to start building
The short answer: earlier than you think, and less than you think.
The practical trigger is the moment supply chain decisions start affecting your clinical timeline. Not when you're about to file an IND — when you're making the decisions that will matter for that filing. CMO selection. Starting materials sourcing. Cold chain requirements. Those decisions have supply chain consequences that compound over time, and they're much easier to get right when someone is thinking about them systematically rather than reactively.
For most companies, that moment arrives somewhere between seed stage and Series A. Not all companies need a full-time supply chain leader at that point. But they do need someone who owns the function — accountable for the decisions, the relationships, and the documentation — even if that's a fractional or part-time arrangement.
The question isn't whether you can afford supply chain leadership at this stage. It's whether you can afford the decisions you'll make without it.
The three decisions that matter most in year one
If you're building a supply chain function from scratch, there's a sequencing problem: everything feels urgent and important, but not everything is.
1. Establish ownership before process. The most common early mistake is trying to build processes before anyone owns them. Processes without owners don't get followed — they get worked around. Make supply chain someone's actual job first. Processes can be built once you have an owner who will use and maintain them.
2. Get your CMO relationships right. Your CMO is your most important supply chain relationship. Most early-stage companies underinvest in CMO governance — they have a manufacturing agreement but no oversight structure. No regular business reviews, no performance metrics, no escalation process. Building that governance structure in year one is one of the highest-leverage things you can do.
3. Build a planning process, not just a plan. A plan is a document. A planning process is a cadence — a regular rhythm of reviewing demand, supply, inventory, and risk. A monthly S&OP meeting with the right people asking the right questions is more valuable than a complex planning tool that nobody uses.
What not to build yet
Early-stage supply chains frequently over-invest in systems and under-invest in process. A sophisticated ERP isn't an asset if your underlying processes aren't defined. At this stage, a well-maintained spreadsheet with clear ownership beats a half-implemented system that nobody trusts.
Resist the urge to hire your way out of a supply chain problem before you understand what the problem actually is. A senior leader who can diagnose the situation and define what needs to be built is more valuable than three junior hires working without direction.
A note on maturity
One of the most useful things a supply chain leader can do for an early-stage organization is help it understand where it is on the maturity curve — not as an academic exercise, but as a practical way of deciding what to build and in what order. A Stage 1 company needs different things than a Stage 2 company. Trying to build Stage 3 governance on a Stage 1 foundation is a waste of time and money.
If you're not sure where your organization sits, that's usually a signal in itself. Start there.