Most current manufacturing facility layout problem solution methods aim at minimizing the total distance traveled, the material handling cost, and/or the time spent in the system (based on distance traveled at a specific speed). The methodology proposed in this paper solves the looped layout design problem for a looped layout manufacturing facility with a looped conveyor material handling system with shortcuts by using the operational performance metric, i.e. the work-in-process on the conveyor in a manufacturing facility, as the design criterion. © 2011 IEEE.