Globally, small and medium-sized enterprises (SMEs) constitute a significant industrial segment. However, their energy-efficiency potential has remained largely untapped due to several barriers. The prevailing approaches on energy optimization in the energy-intensive SMEs are focused on the technological improvements at the operational level and lack a strategic approach. This study developed an energy management system (EnMS) for SMEs by integrating technical and managerial energy saving activities (ESAs), suggested in energy management literature. The proposed EnMS adopted a PDCA (Plan-Do-Check-Act) process approach for consistent energy efficiency and cleaner production. For the validation of the proposed EnMS, a case of small-sized Indian paper mill was selected. The case exhibited the ramp of continuous improvement in the energy efficiency at the mill by illustrating two PDCA cycles. Step I (Plan) involved creating energy management roles with management support, energy auditing, identifying energy-saving opportunities and developing action plan; step II (Do) was about creating communication, awareness and motivation before the implementation of the action plan; step III (Check) involved periodic monitoring, analysis and reporting of the energy key performance indicators (KPIs), and benchmarking enterprise energy performance. The case analysis showed a 35% reduction in specific energy consumption (SEC) of one of the Paper Machine's (PM) vacuum system by the implementation of ESAs for vacuum optimization, generating an annual energy-saving of 0.3 GJ/t. In step IV, the subsequent PDCA cycle was triggered by the biannual management review for exploring the new energy saving opportunities at the enterprise. The next improvement cycle targeted at steam and condensate system optimization in another PM resulted in an additional energy cost saving of USD 26,900.