This thesis addresses the entire layout design problem of a manufacturing facility of discrete parts which includes unique as well as functionally identical machines. The problem has been addressed in two distinct stages. The first stage consists of grouping the available machines into manufacturing cells and the parts into part families. The second stage addresses the determination of proximity of cells and the proximity of machines for inter-cell and intra-cell layouts respectively. The objective in both states is to minimize the weighted traffic of parts in the system. New heuristics have been proposed for both these problems. The cell-formation heuristic is based on a bottom-up approach which minimizes the total inter-cell material flow within the system. The handling of the functionally identical machines in this formulation is novel and is based on capacity considerations, which are critical in a manufacturing company. The solution in the second stage is based on the method of Simulated Annealing. For some classical layout problems, the proposed method provided results superior to those obtained using existing layout formulations. An industrial application of the entire design methodology has also been presented.