This study follows the DMAIC of six sigma tools to find out the major defects, their root causes, and the logical solutions in Bahir Dar Textile Share Company. The research has studied on the results of the investigation conducted on yarn tensile strength, yarn evenness and the grey fabric defect. The goal of the study was to investigate the root causes of the problems and their effect on the fabric quality. For this investigation Pareto analysis and cause and effect analysis tools were used on rotor yarn, warping, sizing, and weaving processes for the investigation purpose. The possible causes and their potential effects were identified by online inspections and root cause analysis and brainstorming. Based on this analysis 74% of the defect is miss pick in weaving, 83% are yarn entanglements, machine speed, and steam variation in sizing, 88% of the defects are yarn knot, broken end, and entanglements in warping, similarly thin place, coefficient of variation and uniformity index are responsible for more than 80% of the defect in rotor. From this analysis it was determined that 80% of the tensile strength and evenness problems are responsible for the grey fabric to be defective. For these problems experimental investigations have been conducted and a new model has been developed from the experimental results using SPSS software regression analysis. This model has predicted to reduce the cost from 918,310.45 ETB to 183,662.09 ETB per the six-month production rate. The amount of remnant cones has been reduced from 10.56% to 4.04% through 5S application. Hence, this lean six sigma approach provided a significant benefit to the case company through its dual focus on reducing waste and increasing value while resolving quality variation issues So that, to sustain the system, action plot and SPC have been designed in control phase. Furthermore, for future directions researchers and practitioners can more focus on prioritization of significant barriers to tackle them during DMAIC implementation in manufacturing sectors so that continuous improvement can be easily achieved.