The scope of design optimization differs from one industry to another. In various situations, new part design is an instance of previously designed part i.e. it differs only in some dimension from the previous part. This can be due to change in functional parameters of the product, building part family or continual improvement in existing design etc. A hybrid approach for part geometry optimization of such parts is presented in this paper. It includes finding relationship between part geometric and functional parameters at assembly level. The designed part is simulated using finite element analysis (FEA) for validation and a set of feasible part geometry parameters along with their effect on objective function (functional parameters) are obtained through knowledge enabled design of experiments (DOE). The optimum solution is sought among them and validated through structural analysis of part / product. The process has been applied successfully in design optimization of electrode_holder in spot welding equipment for automotive industry.