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This work presents an algorithm for design of cellular manufacturing system. It includes important production data such as Operation sequence, operation time, production volume & Intercellular travel loss. Adapted design activity organizing model & image representation model in computer vision is used to incorporate production data into model. Machine sequence Part Load Volume Matrix is formed. Orthographic view part grouping analysis is used for part family formation. Machines are allocated on basis of their utilization for a part family. A new performance measure is proposed considering effect of occupied elements, void, and exceptional elements. The performance of algorithm is examined and compared with existing methods in its class. The result show performance of proposed algorithm is comparable & of good quality with existing methods. Proposed algorithm has immense industrial application. It can be implemented by using free software, Scilab. It can also be implemented by use of commercial softwares.