Engineering systems are becoming more complex with every day. Amount of information that a person needs to process has become too much, but as the amount of information continues to grow, even a group's knowledge and information-processing capabilities are exceeded. Therefore, technics for manipulating vast amounts of information had to be developed if they were going to understand, control and improve systems. Design Structure Matrix or DSM is just one of those techniques, and it will be used for making this thesis. It’s necessary to analyze current division into departments within design department of “Končar Energetski transformatori” and try to optimize existing structure and suggest new division. Company has problems meeting contract deadlines due to sudden rise in number of contracts, and rise in number of new constructions and decrease in ordered series of power transformers had resulted in maximum that current division can withhold. Through better system understanding via DSM new division of department will be advised and system efficiency increased.