This paper presents a study that uses simulation to improve shop floor performance by means of two layout types and certain operational parameters. In this study, an overview of the plant layout problem is covered for the particular company. The original motivation for redesigning the entire shop floor was the need to realize improvements in material flow and output level. First, the performance of the existing system was evaluated by using ARENA. Second, manufacturing cells were formed and group technology layout was developed by means of Rank Order Clustering (ROC) method and Computerized Relative Allocation of Facilities Technique (CRAFT). Finally, the performance of the new system was evaluated and compared with that of the current system.