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Explores the principles of value chain management, as they apply to both public and private products, and explores the impact of e‐commerce and collaborative planning through the Internet on reducing costs and uncertainty in supply chains. Drawing on experience from global initiatives with e‐centre^uk, and recent applications within Nestlé UK, makes a plea for simplicity and standardisation in electronic commerce, to support speedy and certain value chain management across the globe.

Asserts that by examining value chain management (VCM) in a systematic and consistent way, overall speed, certainty and cost‐effectiveness can be improved. Seeks to promote the full benefits of VCM by encouraging the maximum degree of common expression, procedures and communication, and suggests ways in which this can be done. Identifies four key steps in the successful application of VCM: agreement of fundamental objectives; measure current performance; define current and potential partners; and redefine the key processes by which the objectives are to be met more cost‐effectively.

Since the late 1950s it has been recognised that the systems used internally within supply chains can lead to oscillations in demand and inventory as orders pass through the system. The uncertainty generated by these oscillations can result in late deliveries, order cancellations and an increased reliance on inventory to buffer these effects. Despite the best efforts of organisations to stabilise the dynamics generated, industry still experiences a high degree of uncertainty from this source. The “supply chain complexity triangle” describes the interaction of deterministic chaos, parallel interactions and demand amplification. It provides a framework for understanding the generation of uncertainty within supply chains. The implications for supply chain strategy and manufacturing logistics are discussed.

Discusses the effect of electronic commerce on the management of the supply chain. Particular emphasis is placed on electronic data interchange (EDI). EDI has in the past been confined to larger companies. However, as more companies are becoming switched on to the benefits, so it is becoming a prerequisite for all businesses. The benefits and costs associated with electronic commerce are highlighted using results from a survey and follow‐up cases. Analysis showed that the main benefit is faster transactions. Additionally, better co‐operation between trading partners, reduced administration costs and improved accuracy resulted. The impact of the Internet on electronic commerce, including possible future directions, is then discussed. The paper closes by proposing a framework to assist companies with the change towards introducing electronic commerce into the supply chain.