The thesis deals with the principles of Lean and Agile Manufacturing Systems and theirrnappropriateness in Ethiopian context. Inflexible mass-production methods that producernvoluminous of standardized products were inadequate for demands of increased variety. Inrnpursuit of greater flexibility and elimination of manufacturing wastes, Lean ProductionrnSystem has been developed. More recently, demand for further responsiveness to the everchangingrncustomer demand and turbulent business environment, led to a formulation ofrnAgile Manufacturing concept with the intention of greater adaptability. Thus, it isrnnecessary to study their vital principles and adopt the appropriate system to improve therncompetitive capability of industries.rnUsing available literatures, Internet, industry survey and analyzing the gathered pertinentrninformation, the thesis reviewed the main principles of lean production system. Takingrnauthentic pilot cases, enhanced value stream map is generated and lean ManufacturingrnCell for cutlery production is designed. The fundamental principles of agile manufacturingrnsystem and then, the comparison of the two systems are also discussed. Finally thernsuitability of these systems in Ethiopia context is analyzed.rnIt is found that Lean Manufacturing is a collection of technical and operational systemsrnfocused on productivity improvements with limited resources (44). LPS focuses onrnminimizing manufacturing wastes, continuously improving methods, utilizing flexiblernproduction system to produce variety of defect-free goods. Agile manufacturing (AM), onrniiirnthe other hand, is a comprehensive manufacturing system focused on thriving inrnunpredictable business environment. AM focuses on enriching customers, reorganizingrnproduction system for greater flexibility, cooperation to enhance market responsivenessrnand increased use of Information technology.rnThe comparison between these systems shows a difference in viewpoint and perhapsrnstrategy with regard to change, but not in method or approach. Cases on the implementationrnof Lean techniques indicate that industries can enhance competitiveness by adapting Lean.rnThe survey revealed that Industries are experiencing forces that lead to morernresponsiveness. More over, it is found that most industries believe that the Lean Productionrnis more appealing in current Ethiopian Industries Situation.