I have a map in CAD 2002 format with 20 layers all with different features.
I need the procedure and steps on how to convert these layers to shape files so as to be able to work on it in ArcGIS Desktop.
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In ArcMap, you can add the DWG. The DWG will show up as multiple layers (points, lines, etc) representing all of the different geometries in the DWG. You can right click on one of those layers and do a Data Export to convert the CAD elements to shapefiles. Alternatively, you can export the entire DWG to a Feature Dataset if you would like to use a Geodatabase (this is the preferred method if you're trying to export annotation out of the DWG.)
2 things to keep in mind:
I just found this blog posting entitled Importing CAD data in ArcGIS Desktop 10 which should give you a good introduction to how to do this. The embedded links were added by me and prior to these steps you add your DWG file to your map (as a CAD layer).
Best practice CAD conversion tools can be opened directly from the shortcut menu when you right click a CAD feature layer in the table of contents. These tools open already populated with the selected input feature layer and output to your default geodatabase. Clicking OK runs the tool and adds the output to your map.
To convert CAD to shapefile, you should convert each layer in CAD to shapefile by using select by attributes and export data
This tutorial may help you https://www.youtube.com/watch?v=Mr9XwnawSbE