An operation sequence-based method which integrates intra-cell layout cost
with cell formation to minimize the total cost of the materials flow and ma
chine investment is developed here for designing a cellular manufacturing s
ystem. The method comprises three distinct approaches: part-family formatio
n, cell-formation, and layout configuration. In the first phase, an operati
on sequence-based similarity coefficient is applied in a p-median model to
group the parts to form part families with similar operation sequences. In
the second phase, machine assignment to part families is determined where a
trade-off between potential inter-cell movement cost due to the bottleneck
machine and the potential benefit of assigning bottleneck machines to cert
ain part-family is considered. In the third phase, intra-cell layout is det
ermined for each cell so as to refine the initial layout of the cell furthe
r. Numerical examples are employed to demonstrate the mechanism of the proc
edure throughout all phases. A comparative study is also performed to suppo
rt the present method.