In the competitive world of manufacturing, the companies would like to produce their products at reduced price and superior quality. In the production system, the company faces many problems during the production of their products. Over the past years the manufacturing industry follows suitable techniques in their production system for the improvements in production. Still, companies are in search for new technology or techniques to improve their production in radical ways during a short period of time. Many researchers have discussed the development of production system through continuous improvements. Techniques like lean, kaizen etc are implemented in the production system but the effect of these techniques is realized in production unit only after many years. Kaikaku is another technique in lean production which occurs in a radical way to eliminate waste to provide a greater value. It is a radical process improvement which takes place in short period of time. Kaikaku is normally used when Kaizen techniques are not providing enough positive results to keep an organization effective. Still, radical improvements often need capital investment. It is often focused on introducing new technology, new strategies, or completely new production system. This main objective of this thesis is to understand and analyze the production system development process in manufacturing industries and suggest how it is effective to keep an organization competitive. The basic conception and research aid of various authors are explained in the theoretical framework, and is done for the enhanced understanding of the reader and also a new conceptual theory structure framework is done to introduce the new concept of process innovation for radical improvements in the company. The proposed structure framework can help companies to practice the process innovation in the production system for development in short period of time.  Based on the conceptual structure and relevant theoretical understandings, the interview questions are framed and case companies are analyzed for the process improvements and process innovation performance in the production system. The empirical data is collected from case companies through interviews. With the help of empirical results and the related theoretical results, an analysis and discussion is made which clearly explains about the problems faced in the production system and how they can be solved through in a radical way.