While it is well recognized in the literature that modularity is a very important enabler for reconfigurability in manufacturing systems, there is very limited practical guidance on how the various required functions of a production system should be grouped into modules. In this work, a new heuristic approach is developed and presented, to aid the system developer in the identification and synthesis of potential modules during the early design stage of a reconfigurable manufacturing system. The work involves the identification of key module drivers for such systems, and of key criteria that can be used to facilitate the optimization of the granularity and effectiveness of the system. The results are presented in the form of a semi-algorithmic design tool that can be easily understood and used by the developer. The tool is applied to three very different industrial case studies, and is shown to be applicable to various manufacturing scenarios and sub-sectors. The use of the new tool is compared to the use of a design structure matrix approach to function clustering for module synthesis, and is shown to be easier and more objective in its application.