<p>Implementing lean manufacturing practices presents many challenges to researchers and industries in general. Change resistance from the employees and the management, as well as extremely high initial investment in technology and training, are significant challenges. Integrating lean principles into existing workflows is difficult and requires a cultural shift toward continuous improvement. Consistently maintaining momentum and gauging the effectiveness of lean programs require constant commitment and strategic alignment at all levels. Also proposed system requires an engaging suppliers and external partners in lean activities increases complexity, affecting the whole supply chain efficiency and collaboration. This research mainly analyzes the utilization and impact of lean manufacturing on overall production performance of Small and Medium-sized Enterprises (SMEs) in Karnataka. A fully developed conceptual model is employed to assess the adoption and performance of lean practices. Findings reveal that 29.17% of SMEs experienced declining or stagnant sales, while 70.83% had improved the overall market share. On profitability, 12.50% of SMEs had a very consistent profits, and 50% experienced profit growth of more than 10%. Management analysis reveals that high involvement from middle and senior management, which is very vital in lean implementation and performance improvement.</p>