A common problem of cellular manufacturing systems is the formation of part families and machine cells. The total number of inter- and intracellular movements have to be minimized because both contribute to lower productivity. Nevertheless, we show here that intracellular movements are not so important compared with the intercellular movements. We give an efficient algorithm based on minimizing the total intercellular movements, pointing out the importance of being very careful in the selection of the key workstation of each cell. The algorithm has been tested with problems selected from the literature. The results show that in all cases we get a higher utilization rate and lower central processing unit times that other algorithms published in the past.