This paper presents an algorithm for the design of manufacturing cells and part families. This algorithm is suitable for arriving at a good block diagonal structure for a cellular manufacturing design problem with part machine incidence matrix as input. The objective of this algorithm is the maximisation of grouping efficacy (GE), which is one of the most widely used measures of quality for cellular configurations. Assignment of machines to cells is using genetic algorithm, and part assignment heuristic is based on an effective customised rule. A comparison of the proposed algorithm is made with seven other methods of cell formation by taking 36 problems from the literature and found that the proposed algorithm is performing much better than the others. Finally, the algorithm is extended to form configurations with good GE when there are alternative routes.
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