Nonhierarchical decomposition-based optimization, especially when compared to the hierarchical one, has the advantage that no restriction is imposed on how the decomposed subsystems should interact with one another. However, the difficulty inherent in nonhierarchically decomposed subsystems is how to coordinate their activities so that an overall optimum design can be achieved. In this paper, a new and simple method for optimization-based design of nonhierarchically decomposed systems is presented. The driving force behind the method is to formulate and iteratively solve a reduced-size problem so that the decomposed subsystems can be coordinated. Since the size reduction measures developed in the method does not include any problem-dependent assumptions, the procedure is applicable to a wide variety of optimization problems. To illustrate the application of the method, a simple numerical and a flywheel design example are presented.