Purpose: The purpose of this paper is to achieve cost reduction and quality improvement in SME by implementing define, measure, analyze, improve and control (DMAIC) stages of Six Sigma. Design/methodology/approach: The application of DMAIC stages of Six Sigma was carried out in an SME. The cause of the wear out of the guide wheel was discerned in the define stage. In the measure stage, details from the field gathered and sigma level was determined. Using the paired comparison test and FMEA, various causes of the wear out of wheel was analyzed. The alternate material as a solution obtained was compared with present material in the improvement stage. The alternate material was implemented and ensured with proper documents, process change sheet and adoption. Findings: With the application of easy to use tools a cost reduction of INR10,98,096 per annum and the quality improved from 2.9 to 4.4 sigma. Originality/value: Easy tools were attempted in DMAIC model vs multiple and complex tools usage in large-sized organizations, which was not that much wide spread in SMEs. The study was carried out by changing the raw material of the outer layer of the guide wheel, by applying DMAIC model. A better grade rubber was used for solving the higher wear of the outer layer of the guide wheel. Significant cost reduction and quality improvement can be obtained in SMES by DMAIC model which leads to better brand image. © 2019, Emerald Publishing Limited.