I don't believe that "supply-side" communism will work under modern conditions. "Supply-side" communism entails that the workers own — in the contemporary sense of "own" — the means of production, i.e. constant capital: equipment, tools, land*, etc. Under "supply-side" communism, the role of the government is limited to protecting and enforcing the ownership of constant capital by the workers who employ it.
*Marx, IIRC, did not consider land to be capital, because it was not itself produced by human labor. However, land can be bounded in space and time, owned, and is required for the production of some commodities. It therefore functions enough like human-created capital to deserve the designation.
The problem is that if government appropriates some production for any use other than mitigating legitimate externalities (building roads to facilitate trade, cleaning up pollution, etc.), i.e. for the benefit of someone other than the workers, then the government necessarily compromises ownership.
We must, however, appropriate the production of commodities for the benefit of those who do not produce commodities: people who produce services, people who produce for the good of general culture, and people who do not produce at all.
Furthermore, there are large-scale macroeconomic issues. For some issues, there are resolutions that are mutually beneficial, but because of "Prisoner's Dilemma" conditions, independent entities, however rational, cannot achieve these resolutions. It's all the same whether the government makes these decisions directly or makes supposedly "external" decisions to force independent entities to make the right decision. Either way, the government must compromise ownership.
I don't want to bullshit around about what really is and is not "ownership"; it's better to grasp the nettle firmly: the government owns the constant capital. This move will at least decisively end private absentee ownership.
Rather than implement "supply-side" communism, it's better to implement "demand-side" communism: the government is obligated to provide the necessities of survival to every citizen, regardless of his or her productive status. The government will use its ownership of all capital to fulfill this obligation.
The government will directly manage the production of necessities. Every citizen is responsible for providing his or her share of labor to operate this production, either directly or indirectly through taxation. You either sign up for a government job in food production, or you pay the equivalent in taxes. Given that labor costs for survival are a fraction of total available labor power, it's expected that each citizen will need to contribute about 1/4 to 1/8 of the normal high-intensity average individual labor power: In short, anyone can work hard for 10 hours a week or work lazily for 20 hours a week to fulfill his obligations.
To make "demand-side" communism work, the government owns the capital and the people — including but not limited to the workers who use capital to create commodities — own the government. Stalin and Mao did not fail because they did not distribute ownership of capital to the workers; they failed to put the government firmly in the hands of the people and begin this task on day one. By the time Mao clued in and started the Cultural Revolution, the ownership of government by its own members has become too entrenched to reverse.
We need formal, well-defined social, political and legal constructions that ensure that the people control the government, so that the government retains real popular legitimacy. More importantly, we must use these constructions to ensure the government lacks incentive and ability to shape public opinion to the ends and interests of its members. We must begin creating these social constructions immediately; it is disingenuous and too dangerous to defer creating these democratic social constructions until the revolutionary government has "sorted things out." As Heinlein notes, "There's nothing so permanent as a temporary emergency."
We must begin creating direct democracy, where every citizen participates directly in local political and economic decision making. To facilitate more abstract decisions that affect more citizens that can comfortably manage direct democracy, we can implement immediately recallable delegates from local bodies to regional and national bodies.
We must begin the transition to direct democracy immediately, but we cannot immediately finalize the transition. There are too many capitalist traditions, social and legal constructions and psychological habits of thought prevalent in the population to make an instantaneous transfer of power feasible; we'd just end up with a capitalist pseudo-democracy like we have now.
It cannot be assumed that a revolution will have the active and informed consent of even a majority of the people. A revolution can occur only when the existing government and social structure retains the consent of a tiny minority of the population, and the revolutionary forces have the consent of a minority only somewhat larger than the existing government, as well as the uninformed toleration of a majority of the population. "I'm not quite sure what these Bolsheviks are all about," many Russians might have said, "But they sure as hell are better than that fucking Tsar!"
The active members of the revolutionary government (arbitrarily designated the Communist Party, explicitly denying any reference to existing political parties) should not directly participate in direct democracy: Communist Party members must be disenfranchised. The Party holds the reins of government by conquest, not by popular legitimacy, and this fact must always be emphasized and never discounted. If a member wants to vote and participate in democracy, she must first resign her membership and whatever political or economic office she holds by virtue of that membership.
Furthermore, there are some "bourgeois" institutions and social constructions that deserve immediate implementation and indefinite perpetuation under a communist society: The rule of law; an independent judiciary to interpret and apply those laws; freedom of speech and peaceable assembly, formal equality and the prohibition of discrimination on the basis of sex, race, physical ability, religion, national origin, sexual orientation, etc. (We need also need constitutional protection that nonviolent protest — even if the protesters otherwise act illegally — will be met by the bare minimum of force necessary to ensure eventual (and explicitly not speedy) compliance with the law.)
Assuming this disenfranchisement, I can think of three good ways to manage the transition from direct Communist Party rule to direct democracy.
The first is to simply let the Communist Party die of attrition: accept no new members in the party, and as members resign, retire and die, transfer administrative control directly to democratic institutions.
The second is to keep administrative control in the Party on a long-term basis, but place induction of new members and promotion of existing members directly and completely under the control of democratic institutions. In this way, the Communist Party will be "infiltrated" and eventually replaced by the people, but the founders and initial members will leave their stamp on the social constructions inside the party.
The third is to set up the Communist Party as a "civil service" under the high-level control of democratic institutions, much like the UK (and to a lesser extent the US) civil service.
This method creates an interesting dialectic between the people and the civil service. In the initial stages the party (the civil service) will be relatively strong and the democratic institutions relatively weak; the party will influence the democratic institutions. As the people become more confident and competent, they can exercise their formal democratic power more forcefully, eventually subordinating the party to their own ends.
Bottom-up "supply-side" communism sounds like a good idea, and was probably a terrific idea in late 19th and early 20th century Europe, when the vast majority of people were employed making commodities and there were fuew large-scale macroeconomic issues. However, there are too many limitations in today's complicated economy with too few people actually creating commodities. The proletariat in its literal meaning (industrial commodity-producing workers), is too narrow today to exercise political privilege. Capital must be placed in the hands of the people, not just the proletariat, and the only way to place capital in the hands of a people without strong social and psychological constructions to cooperate is to make the government the intermediary of this ownership.