Even for the most experienced operators, optimizing their system's operation while experiencing changing seasonal demands fluctuations in daily demand, emergency incidents and other operating variables, represents a complex problem. Adding water quality constraints further compounds the problem. Most water system operators do not have reliable, real time, generalized computer models to solve this complex equation. Instead, they rely on trial and error methods to determine the best actions to take in response to operating variables. From case studies, the paper reviews the current state of engineering tools, techniques and generalized software that has been employed to optimize operation and reduce costs in water supply and distribution systems. Since water system operators have to achieve very high standards of service, the review places emphasis on generalized, and field proven engineering techniques, rather than theoretical desk top studies. The paper concludes by presenting some of the benefits to utilities and their customers, that can be achieved by re-engineering their system to optimize its operation.