Improvement of productivity is need of the hour for overall growth and development of an organization. The present work deals with a problem of low production tractor industry. The machining operation being one of the most important stages in manufacturing of various components has been focused in the present work. A thorough study of existing process plan revealed that there is enough scope of improvement in cycle time by modifying fixtures and cutting tools. The study has been carried out by identifying the machining of two critical components. About 30% Cycle time has been reduced by modifying jigs & fixtures and by implementing latest cutting tools. Fixture has been modified to accommodate 8 Cylinder Heads at time, Cutting tools with improved geometry and TiAlN coating. After implementing the modifications 41 % improvement in machining productivity has been achieved for Cylinder Head and 20% reduction in machining cost of one Cylinder Head. Machining cost of one Main Transmission Housing has been reduced by 16%.Further this study has resulted in annual savings of approx. Rs. 6.5 lakh and Rs.5 lakh in case of Cylinder Head and Main Transmission Housing respectively.