Purpose: In an increasingly competitive business environment, machine reliability problem merits special attention in operations of manufacturing cells. This is mainly due to flow line nature of the cellular layout, interdependency of downstream and upstream of machines related to each other. This study investigates the effect of critical machine reliability improvement on production capacity and throughput time in manufacturing cells. Design/methodology/approach: A discrete-event simulation model was developed to investigate the effectiveness of a reliability plan focusing on the most critical production machines in improving the performance level as an alternative to increasing the reliability of all machines. Four machine criticality policies are examined in the simulation experiments. Findings: The results of this experimental study indicated that an improvement of reliability of a limited number of machines leads to an increase in overall production capacity and speed in cellular manufacturing operations. A reliability plan, that focuses on a set of critical machines, potentially offers a more economical alternative to increasing the reliability of all machines in such facility. Research limitations/implications: The results demonstrate that to achieve higher production capacity and shorter throughput times, managers should consider directing more resources to increase the reliability of critical machines, particularly, those with shorter mean time to failure and higher utilization. Originality/value: The designed simulation model is unique in representing the dynamics of a real world manufacturing cell environment by encoding operational functions such as machine failure, maintenance resource allocation, material flow, job sequencing and scheduling. A new machine availability metric is defined as well.