Demand-side management (DSM) is a significant component of the smart grid. DSM without sufficient generation capabilities cannot be realized; taking that concern into account, the integration of distributed energy resources (solar, wind, waste-to-energy, EV, or storage systems) has brought effective transformation and challenges to the smart grid. In this review article, it is noted that to overcome these issues, it is crucial to analyze demand-side management from the generation point of view in considering various operational constraints and objectives and identifying multiple factors that affect better planning, scheduling, and management. In this paper, gaps in the research and possible prospects are discussed briefly to provide a proper insight into the current implementation of DSM using distributed energy resources and storage. With the expectation of an increase in the adoption of various types of distributed generation, it is estimated that DSM operations can offer a valuable opportunity for customers and utility aggregators to become active participants in the scheduling, dispatch, and market-oriented trading of energy. This review of DSM will help develop better energy management strategies and reduce system uncertainties, variations, and constraints.