The objective of this research is to design and develop an integrated pharmaceutical supply chain management(SCM) system for optimizing inventory control and reducing material handling costs based on B2B collaboration and information sharing.

We have analyzed business processes of material handling in hospitals and reviewed system requirements for efficient supply chain management. VMI(Vendor-Managed Inventory), which is one of important applications of SCM, has been adopted. Online procurement system and Web-based information sharing system are developed for the integration of the SCM.

The SCM system composed of VMI, CAO(Computer Aided Ordering), and Web-based information sharing system enables hospitals to optimize the procurement processes and inventory control of pharmaceutical products. By sharing information with hospitals, the wholesaler can get information more timely and use exact data about inventory status and drug usage volumes of hospitals, so that it can forecast future demand more accurately, which facilitates needed products to be supplied timely and cost-effectively.

By the B2B collaborations and information sharing among SCM participants, the SCM system have been implemented successfully in the medical center. It improves material handling of hospitals, reducing inventory management costs and ultimately improving quality of patient care.