A numerical simulation on the heat transfer and flow field was carried out to improve the performance of the shell and tube heat exchanger. The steady incompressible 3-D Navier-Stokes solution is obtained with the actual operational condition and geometry of the heat exchanger. Based on this study, it is noted that the present geometry of the heat exchanger causes poor heat transfer since the air inside shell does not flow through the tube bundle, but around it. The enhancement of the heat transfer can be achieved by the variation of the design factor like the sealing strip located on the top/bottom and middle of the baffle, but it causes the increasement of the pressure drop. In this paper, the effects of the location and size of the sealing strips and flow rate through the heat exchanger on the heat transfer and pressure drop are studied.