To carryout an operational design of Cellular Manufacturing System (CMS), a two stage methodology has been developed in this research. First, the problem of Machine-Part grouping (CMS design) is solved, and then sequencing and scheduling of parts on machines is carried out. Since each cell is like a Job-Shop, therefore the scheduling part of the problem is solved using a similar approach as in case of a Job-Shop scheduling problem (JSSP). The effectiveness of both the tools developed during this research has been verified separately before combining them together.