Duangpun KritchanchaiRawee SuwandechochaiMahidol University2018-09-242018-09-242010-01-01International Journal of Services, Economics and Management. Vol.2, No.2 (2010), 211-22417530830175308222-s2.0-84874185689https://repository.li.mahidol.ac.th/handle/20.500.14594/28872Logistics and supply chain management play an important role in Thailand industry. We believed that logistics and supply chain management could be a means to improve competitive performance in service sector. This paper diagnoses the hospital’s internal supply chain and logistics system in Thailand by business process analysis. This paper also investigates the inventory policy. Our results show the unconnected link at the case study’s internal supply chain in the medicine inventory system between medicine storeroom in each ward, central warehouse and the hospital purchasing department. ‘MSale’ is used to represent average monthly demand; however, ’it does not reflect the end customer. This leads to inaccurate reorder point and order quantity at the central warehouse. The paper illustrates the business process analysis by using Integration Definition (IDEF0). The re-engineering business process will be proposed. Finally a new inventory system and software development for connecting this internal supply chain is presented. © 2010 Inderscience Enterprises Ltd.Mahidol UniversityBusiness, Management and AccountingEconomics, Econometrics and FinanceArticleSCOPUS10.1504/IJSEM.2010.030920