The authors present a number of observations on the current state of supply chain management (SCM) for small and medium sized companies, and on the impact of electronic commerce on SCM. These observations include adaptation to accelerated delivery schedules, shortened product life cycles, and required product customization. Collaboration between companies may range from loose cooperation to total integration of supporting information systems. The advent of the Internet has spawned an enormous increase in outsourcing, due to a reduction of coordination costs (through online ordering, order status tracking, shipment tracking, and so on), and a reduction of transaction risk. The Internet has also increased the threat of new market entrants and customer switches to substitute products.

Also discussed in this paper are four developments facilitated by the Internet: vendor-managed inventory, in which the vendor is made responsible for delivery of product just in time; supplier hubs, which are essentially stocking distributors serving multiple industries; electronic markets; and more capable production planning systems. According to the authors, the applicability of these methods is related to the degree of product customization and supplier lead times.