Operating cost reduction. through and supply The potential for operating cost reduction logistics chain management is considerable. Because a large proportion of costs in a typical business are driven by logistics decisions and the quality of supply chain relationships, it is not surprising that in the search for enhanced margins many companies are taking a new look at the way they manage the supply chain. handling and order processing It is not just the transportation, storage, a total costs within the business that need to be considered. Rather pipeline view of costs on a true'end-to-end' basis should be taken. Often the upstream logistics costs can represent a significant proportion of total supply chain costs embedded in the final product.