MANY MEDIUM-SIZE JOB SHOPS IN THE U.S. ARE IN THE PROCESS OF IMPROVING THEIR BUSINESS PRACTICES VIA STREAMLINING MANUFACTURING. SOME OF THEM HAVE MODIFIED THEIR PLANT LAYOUT BASED ON CELLULAR MANUFACTURING PRINCIPLES, BUT ARE STILL STRIVING TO ACHIEVE A WORLD CLASS MANUFACTURING STATUS. THEY ARE FACED WITH A PRACTICAL DILEMMA OF HOW TO TAKE THE NEXT STEP. CONTINUOUS FLOW MANUFACTURING (CFM) PRINCIPLES ARE GEARED TOWARDS ACHIEVING A HIGH RESPONSE-LOW INVENTORY STATUS. THE PROCEDURE PROPOSED IS A METHODOLOGY CURRENTLY BEING UTILIZED IN A MEDIUM-SIZE MANUFACTURING COMPANY IN THE U.S.