The layout is an important and difficult problem in industrial applications like sheet metal manufacturing, garment making, circuit layout, plant layout, and land development. The module layout problem is known to be non-deterministic polynomial time complete(NP-complete). To efficiently find an optimal layout from a large number of candidate layout configuration a heuristic algorithm could be used. In recent years, a number of researchers have investigated the combinatorial optimization problems by using neural network principles such as traveling salesman problem, placement and routing in circuit design. This paper describes the application of Self-organizing Feature Maps(SOM) of the Kohonen network and Simulated Annealing Algorithm(SAA) to the layout problem of the two-dimensional rectangular shapes.