Cell formation problem in CMS design has received the attention of researchers for more than three decades. However, use of sequence data for cell formation has been a least researched area. Sequence data provides valuable information about the flow patterns of various jobs in a manufacturing system. Therefore, it is only natural to expect that use of sequence data must result in not only identifying the part families and machine groups but also the layout (sequence) of the machines within each cell. Unfortunately, such an approach has not been taken in the past while solving CMS design problem using sequence data. In this paper, we fill this gap in the literature by developing an algorithm that not only identifies the cells but also the sequence of machines in the cells in a simultaneous fashion. The numerical computations of the algorithm with the available problems in the literature indicate the usefulness of the algorithm. Further, it also points to the untapped potential of such an approach to solve CMS design and layout problem using sequence data.