Traditionally, the design of physical layout of the manufacturing system, I/O station location determination and subsequently the design of Material Handling System (MHS) is being carried out in isolation. In this work an attempt is made to concurrently design 1. Cell System Layout (CSL) or Inter-cell layout, 2. Determining optimum location of input, output (I/O) stations of each cell and 3. The flow path of the MHS using a Genetic Algorithm based methodology for a Cellular Manufacturing System (CMS) environment under open field configuration. The proposed algorithm is employed to optimize one of the classical objective namely Total Material Handling Cost (TMHC). The algorithm is tested on four different bench mark layouts and with different initial problem data sets. It is found that the proposed algorithm is able to produce satisfactory solutions consistently within a reasonable computational limit. ? 2012 Asian Network for Scientific Information.