This paper presents the development of a novel vehicle-routing-based algorithm for optimizing component pick-up and placement on a collect-and-place type machine in printed circuit board manufacturing. We present a two-phase heuristic that produces solutions of remarkable quality with respect to other known approaches in a reasonable amount of computational time. In the first phase, a construction procedure is used combining greedy aspects and solutions to subproblems modeled as a generalized traveling salesman problem and quadratic assignment problem. In the second phase, this initial solution is refined through an iterative framework requiring an integer programming step. A detailed description of the heuristic is provided and extensive computational results are presented.