Cell manufacturing (CM) is an approach that can be used to enhance both flexibility and efficiency in today’s small lot and multi-type production environment. Based on CM, in order to enhance the flexibility of the manufacturing system and reduce manufacturing cost, a mixed integer programming model integrating the thought of physical manufacturing cell (PMC) and logical manufacturing cell (LMC) is proposed in this paper. Aimed at minimizing the total manufacturing cost including processing cost, the inter- and intra-jobshop material handling cost, the inter-cell operating cost and the machine relocation cost, the design of flexible manufacturing cell (FMC) model mainly considers three factors: machine layout, routing and production lot sizing. Several agile flexible manufacturing cells are formed by reconfiguring machines to jobshops and manufacturing cells. The correctness and validity of the proposed approach is proved by computational results.