The authors propose a synergy of Systematic layout planning (SLP) and Simulation modeling (SM) as tools for shipyard layout design aiming towards an optimal material flow. At present, most of shipyard layout designs are based on the conventional methodology initiating with benchmarking. Such approach can be misleading. For more reliable and efficient results, the authors suggest a novel approach, using a combination of mentioned two methods. Firstly, Systematic layout planning is used for generating larger number of suboptimal shipyard layout design alternatives.  Then, these alternatives are analyzed through an objective decision making tool to reach an optimal layout design alternative. Further, such optimal alternative is tested and evaluated by Simulation modeling. Finally, the presented methodology is confirmed on a case study as a viable approach for an efficient and reliable shipyard layout design. It features both the simplicity of the design process and the objectivity of the multiple-criteria decision making and evaluation process.