An important element in the design and management of cellular manufacturing systems is the ability to determine capabilities. This paper describes a generic methodology of Capability Analysis (CA) which can be used for the integrated assessment of various capability factors. The main aspect of CA is the ability to compare di erent factors alongside one-another. This is done by determining priority con® dence scores (PCS values) which are capability scores (measures of performance) represented as proportions of required capability scores adjusted to take into account improvement potential, factor importance and ® nancial considerations. CA is used to form a recovery schedule of targets for improvement ranked in order of priority and is produced by ranking the PCS values for each capability level (cell, product, part, workstation and operation). Targets at a higher level can be broken down into more detailed targets at a lower level using the concept of transparency. The workings of CA are demonstrated using an example.