This paper addresses the problem of manufacturing cell formation, given multiple part routings, and multiple functionally similar work-centers. The suggested choice of part routings favors the decomposition of the manufacturing system into manufacturing cells in a way that minimizes part traffic, along with satisfying the part demand and work-center capacity constraints. The proposed heuristic, iteratively solves two independent problems: (i) routing selection, and (ii) cell formation. The common objective is to minimize the inter-cell traffic in the system. The first problem is formulated as a linear-programming problem, while the latter is approached by an existing bottom-up aggregation procedure, known as Inter-Cell Traffic Minimization Method (ICTMM), enhanced appropriately. Applications of the proposed system include: (i) the design of a manufacturing facility with respect to machine layout, (ii) selection of part routings for changing product mixes, and (iii) assignment of new parts to part families, given the initial layout.