In recent years off-site construction has become popular in North America due to the superior quality of the product, improved productivity, and reduced environmental impact. The panelized construction approach is one of the most readily utilized off-site construction methods. In a wood-frame panelized construction plant, wall panels are customized according to various design parameters such as length; height; number of studs, windows, and doors; panel type; and number of walls. These design parameters affect the processing time at each station in the plant, while the panel sequence affects the waiting time between stations. Due to this dynamic nature of the fabrication process, it is challenging to automatically generate an optimal panel sequence, as a result this task is performed manually in current practice. This paper focuses on integrating discrete-event simulation (DES) with an optimization algorithm in order to automate the panel sequencing process. Processing time at each station is calculated based on a task time formula which is a function of the design parameters of the panel, while delay is calculated based on a distribution derived from historical data. A particle swarm optimization (PSO) algorithm is integrated with the simulation model using a central database in order to generate an optimal panel sequence. The proposed method will eliminate the manual work required for panel sequencing, and is expected to reduce production time up to 10%. The proposed method is implemented in a wood-frame panelized construction plant as a case study.