One-piece flow is a design rule that entails production in manufacturing cells on a 'make one, check one, and move-on one' basis (Black, J.T., 2007. Design rules for implementing Toyota Production System. International Journal of Production Research, 45 (16), 3639-3664), which reduces manufacturing lead time significantly. This paper proposes a sequential methodology comprised of a mathematical model and a heuristic approach (HA) for the design of a hybrid cellular manufacturing system (HMS), to facilitate one-piece flow practice. The mathematical model is employed in the cases of small- and medium-sized problems, and it attempts to minimise the total number of exceptional operations, while considering machine capacities and alternative machines. The machine-part matrix achieved by the mathematical model is input into the flow line design stage of the HA, where backflow within the cells is eliminated. However, for industrial problems, the proposed HA is utilised. After the formation of the cells by clustering, the HA attempts to eliminate exceptional operations of a given cellular configuration together with a functional structure by employing alternative machines, based on the decision rules developed. Later, unidirectional flow within the cells is achieved and the capacity and budget constraints are satisfied. A medium-sized problem is solved by using both of the approaches, namely, the model integrated with the flow-line design stage of the HA and the complete HA. The results are discussed and the limitations are explained.