Building efficient energy systems means designing for less and less entropy. The engineer must balance the heat-transfer and fluid-flow irreversibilities in even the tiniest components of a system. The minimization of entropy generation is a design philosophy that extends over many sections of power and refrigeration engineering. The minimization of irreversibility is a proper way to apply the principles of thermodynamics and to begin the admittedly complex multidisciplinary tasks demanded by the actual design. This paper discusses the mechanism of entropy generation of each system compartment essential in mapping out a strategy for decreasing the entropy generated by the overall system.