The objective of this research is Study of the existing layout of a machining process unit and to design a lean plant layout using SLP (Systematic Layout Planning) to increase its productivity and reduce the material handling cost. Factory layout involves the arrangement and selection of machines, material handling devices, material handling path, resulting in the reduction of cost and time involved in manufacturing a product. The facilities layout problem, which is an integral part of facilities design, aims to spatially locate the production units within a facility subject to some design criteria and area limitations, with one or multiple objectives. In this, a hybrid model that combines a facility allocation technique and a software analysis of the layout is done. Select the best block layout of the machining section with the help of Relative Allocation of Facilities Technique. After selecting the best block layout detailed layout is constructed and this detailed layout is analyzed using ARENA. The installed utilization of the layout is checked. The utilization of the layout is increased by changing the position of the equipment or by introducing a new machine into the layout. With the advent of software which allowed the user to build models and move them around the screen and analysis can be done. Re-layout can also be done until the satisfactory result is obtained.