Manufacturers who seek to integrate their supply chain may invest in vendor development. This is typically appropriate in situations of sole sourcing, where a long-term relationship withthe supplier is expected.
Achallengewithbidirectionalsupplychainsisthatthereisseldomanassured long-term relationship with the customer-suppliers. This can discourage any development of customer-suppliers, who may defect to other service providers at any time. However, there are some services in which customer-supplier development can be accomplished in an effective manner. For example, the theoryofmanagedhealthcareisthatifcustomerstakebettercareoftheirbodies, such as through preventative actions, the health careprovider can doa better job of promoting their good health. Health maintenance organizations and insurance companies implement customer-supplier development by providing programs to promote good health and train customers in healthy practices. The companies benefit from lower occurrence of insurance claims, and the customers benefit frombetterhealth.