(soft music) Decisions made regarding your market niche, meaning MTO versus MTS impact your production operations and supplier selection. This will affect both inbound and outbound logistics, which represent the movement of material into and out of your facility. MTO often targets a smaller market with less customers and smaller orders. MTS products appeal to a broader marketplace with much higher volumes. The logistics network is also affected by the size of the company. If the company is a large international conglomerate, it's possible they have their own fleets of trucks, ships, and planes. However, a smaller company may have to depend on UPS or FedEx to handle their shipments. An additional consideration is where each company is within the supply chain. A company further up the supply chain is probably moving raw materials, minerals, such as iron or agricultural products, such as wheat, are typically shipped in bulk containers by rail or cargo ship. A company downstream in the supply chain is probably shipping finished products, such as appliances or boxes of cereal. These would likely be shipped by the individual box or case. Logistics has two major considerations, the specific product and the supply chain network. The product considerations are what product, how much volume, and how much variety. The supply chain view considers the complexity of the network, the diversity of the customer base and supplier base. Logistics is an essential component of supply chain management. Understanding how logistics strategies work helps companies understand the key metrics, core processes and longterm goals of their supply chain so they can get the right item to the right place at the right time.