Efficient utilization of the equipment distributed in different enterprises and optimal allocation of these resources is an important concern for networked manufacturing. The third party based equipment sharing approach is put forward to optimize the utilization of distributed equipment for networked manufacturing; Taking advantage of the shared equipment offered by equipment providers by means of lease agreement, the third party carries out production by establishing networked virtual factory. Operational mechanism of the third party based equipment sharing is discussed, and characteristics of this approach in achieving resource allocation are analyzed. Shared equipment planning is formulated as an optimization problem with the objective of maximizing profits for equipment coordinator, a mathematical model for shared equipment planning is developed. Finally a case study is discussed to show the effectiveness of the planning model. Efficient utilization of the equipment distributed in different enterprises and optimal allocation of these resources is an important concern for networked manufacturing. The third party based equipment sharing approach is put forward to optimize the utilization of distributed equipment for networked manufacturing; Taking advantage of the shared equipment offered by equipment providers by means of lease agreement, the third party carries out production by establishing networked virtual factory. Operational mechanism of the third party based equipment sharing is discussed, and characteristics of this approach in achieving resource allocation are analyzed. formulated as an optimization problem with the objective of maximizing profits for equipment coordinator, a mathematical model for shared equipment planning is developed. Finally a case study is discussed to show the effectiveness of the planning model.