In recent fast and busy world of manufacturing industries, everything changes rapidly and new challenges are arising which require new solutions. Hence, use of technology is necessary for the industries. Digital manufacturing (D.M.) is an emerging technology in the field of industrial manufacturing to visualize the facility virtually for planning an optimized approach to obtain maximum production rate. Also, Lean manufacturing techniques are useful for the optimization of manufacturing facility. The Fluid Controls Private Limited is a leading medium scale company deals in design and production of high performance instrumentation products. One of the company’s manufacturing setup has three floor manufacturing facility. Incidentally, the material has to travel on all three floors. The company wanted to digitize the manufacturing facility for optimized approach to satisfy the continuous increasing demands of customers. It had been noticed that there was a scope to introduce digital manufacturing and lean manufacturing techniques integrated for the digitization and optimization of space utilization and parameters related to material flow. The information about layout, product, processes, resource data were collected and analyzed, after which the facility was modeled and simulation was done using digital manufacturing software ‘DELMIA’. After study of virtual model and practical constraints, the alternate layouts were produced using a lean manufacturing concept, ‘Systematic Layout Planning (S.L.P.)’. A suitable and optimized layout was selected, validated and recommended for implementation. After comparing the existing manufacturing facility layout and the theoretical results of the recommended layout, it is found that the new layout makes free space of 143.3083 m2from the total space occupied on the second floor. This free space can be utilized for the expansion of company in future. Along with this, it increases the space utilization by 13.29 %. It also results to enhance the material flow distance and material flow cost by 52.09 km per month and INR 9.54 per trip, respectively. The use of digital manufacturing and lean philosophy in industry optimization advantageously boosts up the production rate and provides an opportunity to expose these advanced areas of the technology to the industry.