Traditionally the design of Inter-cell layout and Material Handling System (MHS) of the manufacturing system is being carried out in step by step. This leads to sub-optimal solutions for facility layout problems (FLP). In this work an attempt is made to concurrently design Inter-cell layout and the MHS using a Genetic Algorithm (GA) based methodology using simulated annealing algorithm (SAA) as local search tool for a Cellular Manufacturing System (CMS) environment under open field configuration. The proposed algorithm is employed to simultaneously optimize two contradicting objectives viz. 1. Total material handling cost 2. Distance weighted cost of closeness rating score. The algorithm is tested on two different bench mark layouts and with different initial problem data sets. It is found that the proposed algorithm is able to produce approximate pareto-optimal solutions. © 2012 Springer-Verlag.