This paper presents a correlation analysis-based heuristic for the machine-part cell formation in the context of cellular manufacturing systems. Two new indices, viz. ‘‘mean correlation index’’ for forming the part families and ‘‘relevance index-modified’’ for identifying the appropriate machine cells are proposed. Themachine-part cells formed by the proposed heuristic resulted in a higher grouping efficacy (GE) for 14.3% of the test instances gathered from the literature, and it performed equal to the best in class heuristics available in theliterature for 80% of the test instances. The method presented in this paper has set a new benchmark GE for 5 of the 35 test instances used by the researchers in the context of machine-part cell formation without singletons.