A number of grouping measures have been developed in the literature to evaluate the efficiency of block diagonal forms in cell formation. The commonly known grouping efficiency measures will be discussed in this paper. The most used measure in the literature is grouping efficacy. These measures do not have the ability to distinguish between two or more alternative optimal manufacturing systems with similar voids and exceptions. Moreover, none of these measures can evaluate the block systems and sub-systems at the same time. In this paper a modified grouping measure, called the Grouping Cell Indicator, is proposed to overcome the above limitations. The main features of the proposed Grouping Cell Indicator are: First, Grouping Cell Indicator can distinguish between two or more alternative optimal cell formations with similar voids and exceptions. Second, Cell Indicator () reflects the quality of every cell in the formed problem, which will lead to compare between ill-structured cell and other types of cells. Third, Grouping Cell Indicator can be used to evaluate the efficiency of block diagonal forms in cell formation where optimal solution does not exist and the results of using this measure were very close to grouping efficacy. Forth, grouping cell indicator provides the designer with the opportunity of choosing between alternative cell formation solutions. Finally, the proposed measure is tested and the result demonstrate the ability of this measure to distinguish between alternative optimal systems, compared with other measures and demonstrate the ability to compare between different types of cells.