Smallholder farmers provide the foundation for food security in South Asia. However, increasing seasonal labor scarcity caused by rural out-migration has resulted in growing agricultural labor costs, presenting challenges to cash-constrained smallholder farmers that hire manual labor for land preparation, sowing, harvest and post-harvest operations. Technological innovations in small-scale agricultural machinery appropriate for the small field sizes and limited resource endowments of South Asia's farmers have been proposed as a potential solution to this problem. An increasing number of development initiatives also promote rural entrepreneurial approaches to mechanization, whereby smallholder farmers can access and use machinery in their own fields on an affordable fee-for-service basis offered by machinery owners. This approach reduces capital constraints for smallholder farmers while enabling entrepreneurs who can afford equipment to enter into business serving stallholder farmers as clients. This approach is now widely practiced in Bangladesh, where machinery entrepreneurs play a crucial role in providing access to productive technologies for smallholder farmers who could not otherwise afford direct purchase of labor- and cost-saving machinery. In order to maintain low machinery purchase costs for emerging yet capital constrained rural entrepreneurs, while also assuring high quality standards, cost-effective domestic production of agricultural machinery is increasingly championed as an important long-term national development objective. With no safety standards or guidelines for best production practices, the few manufacturing workshops that exist within Bangladesh operate inefficiently and without clear rationalization of manufacturing processes. Haphazard copying of prototypes or imported available machinery is common. This leads to inefficient production and poor product quality in an emerging but potentially highly beneficial industry. This paper addresses these problems and presents a case study to increase machinery manufacturers' capacity while improving manufacturing operations and workplace safety through equipment selection, workshop layout, and usability. Janata Engineering (JE) is a small-scale machinery manufacturing enterprise in Bangladesh, specializing in two-wheel tractor attachments such as bed planters, local derivations of power-tiller operated seeders, and other equipment for planting, irrigating, and processing crops. JE was expanding and setting up a second factory for which the authors provided assistance on its design. Our research question was whether participatory action research (PAR) supported by empirical data could provide improved factory design in terms of functionality, safety and human interactions, when compared with conventional approaches driven by technical efficiency concerns alone. Using PAR, we developed a number of alternative process and layout recommendations for JE to increase the efficiency of labor and machinery through improved workflow, throughput, and output. While immediately useful for JE, the process and protocols proposed in this paper are relevant for emerging agricultural machinery manufacturers in Bangladesh and more widely in South Asia.