This paper focuses on supply chain management of essentials medicines, equipment’s needed for all services in the hospital. SCM is widely used in almost all kind of industries across the world. There is the key importance of implementing supply chain in an organisation and some changes which must be made in supply chain practices of hospitals across India. Having a better SCM will reduce the overall cost of operations and shows more profit without compromising the quality of services. Essential medicine distribution and flow in the hospital use RFID (radio frequency identification) which enables to trace medicines used in various department of the hospital. Some hospital faces various challenges like Provider preferences, patient demand/need etc. for applying supply chain management in the hospital.