The small and medium enterprises (SMEs) have always played a major role for a country’s Gross Domestic Product (GDP) and employment. However due to lack of expertise, unavailability of proper technological know-how, enormous use of makeshift arrangements, the manufacturing systems of SMEs have become less productive, complex, and non-robust. This leads to overtime expenses in achieving the manufacturing targets. Several productivity improvement methodologies have developed over the years to improve the productivity. But, mostly these approaches has been developed with an implicit assumption of a large industry. A number of attempts have also been made to implement these methodologies in SMEs. Based on the empirical study, it was observed that single methodology approach is not holistic enough to deal with the incumbent challenges. Moreover, these methodologies fail to make a judgement on the basis of cost analysis. This research proposes a framework which tries to improve productivity systematically while analysing the modification cost to choose the most economical solution such that it can minimise the additional expenditure.  As a case study, an Indian SME is considered to illustrate how the proposed framework can be utilised to improve productivity.