Small and medium-sized enterprises make crucial contributions to job creation today. However, there are issues with this kind of enterprise such as financing, which is reflected in the inaccessibility of the capital necessary for their establishment and development. The development of the economy and the enterprise itself is valued through management systems that, along with a number of people, business plans and financial flows, have to be aligned with other factors in the field of production in order to survive. Managing such enterprises is an on-going process that drives and directs business activity and helps achieve the envisaged goal. Thus in order to survive on the market, small and medium-sized enterprises, along with various efficiency parameters (innovation, financing, supervision, marketing, promotion, employee motivation), must learn to use these parameters to improve their production management. The aim of this study (research) was to identify and define the efficiency parameters of the SME's management system and propose a more efficient management system. The research helped in determining the current status of SME management as well as the contribution to efficiency. In addition, certain parameters of SME performance have been demonstrated. Basic information was obtained by email, direct interviews and phone calls. Analysis of collected data was conducted by descriptive statistics, Chi-square test and AHP method. Descriptive statistics included the mean, median, standard deviation and variance. The new model was established and proposed based on the obtained results. The problems identified in the studied enterprises were insufficient equipment in the working premises as well as the use of classic technology employed by manual tools and machines (more than half of the respondents). The obstacles in enterprises included III slower and inefficient performance of certain tasks and aprolonged time to place a much larger amount of products on the market. Chi-square test showed that the effectiveness factors such as leadership and company goals, preparation and mistakes in manufacturing and business processes, etc. were significantly different, while the organized workspaces, work conditions, personal sales, etc. were statistically highly significantly different. The ranking of parameters according to the AHP method, starting from the most significant parameter to the lower-range parameters has shown that the market, promotion and marketing have the most significant influence on the SME's production management system, followed by the production program and product quality. The third important factor is the information and contemporary production technology, followed by the process culture, management processes and production deadlines, human resources, leadership, policy and organizational structure of enterprises. Least importance has been attributed to ecologically clean production. The research results confirm the hypothesis that the SME's production management system is inefficient due to the lack of staff. In addition, it is necessary to invest in employees and increase their number so that they can take on their responsibilities and actively engage in improving the company's business.