This paper deals with the design and loading of a cellular manufacturing system in the presence of alternative routing. The problem is decomposed into a cell design phase performed once and a cell loading phase performed on a recurrent basis. Two alternatives for the cell design problem are proposed: either the process plans of each part type are treated as if they were separate part types; or aggregate part types are considered. In either case, a conventional cell formation method is used to group machines. The cell loading problem is modelled as a multi-period LP formulation that determines the quantity of each part type that will follow each alternative route in each period of the planning horizon in order to minimize total transportation and holding costs while keeping both machine and cell utilizations approximately balanced.