The study took place on small and micro enterprises that produce cultural clothing aroundrnGulele subcity. These enterprises apply an informal ways of grouping for the products theyrnproduce. This act results in spending too much time looking for the exact product; estimatingrninaccurate price; spending too much time negotiating and explaining the characteristics of arncertain product, This research mainly focuses on proposing an appropriate classification andrncoding system for Ethiopian cultural clothing. And it is expected that, application of grouprntechnology will assist in minimizing the problems stated above. A sample of 111 small and micrornenterprises was studied for this research; in order to understand more about the features ofrncultural clothing. A questionnaire and a semi-structured interview were conducted to collect thernrequired information regarding the attributes of cultural clothing and the problems that arisernfrom applying an informal way of grouping. Therefore it was possible to create a part familyrnbased on the shared characteristics of cultural clothing. This act was assisted by applyingrnDCLASS coding system for Tibeb kemis, Netela and Buluko. It is expected that users willrnunderstand the principle of this code and apply it for improvement. The cloths can also berndocumented for later use, so than producers will save energy and time from preventingrnduplication of effort when they try to draft previously designed cloth for the second and thirdrntime; estimate accurate selling price and minimize the time spent for negotiation. The codingrnsystem can also assist them to come up with new designs for the future market. Finally futurernresearchers can apply group technology to the rest of Ethiopian cultural clothing.rnKey words: Group Technology, SMEs, Ethiopian Cultural Clothing