Indian medical textile industry is having a wide range of market demand for the gauze bandage, but the supply is in such a way that there is a continuous demand gap exists, which can be used to create opportunities for small scale industries.The specific process selected for automation is gauze roll cutting with customized size and length, rolling and packing machine. In existing technique there are no single machine available in India for such processing, there is need to develop a compact machine to make it more economical and easily available for the small scale and micro industrialists. In manually operated machines, the huge roll of gauze is rolled to the customized length and after that they move to cutting machine were the roll is cut according to the required width for which it requires 2 HP motor. The difference between manual and fabricated machine is that the use of high power motor is eradicated. The highlighting feature in proposed equipment when compared with the other machines is that the production rate is increased, the labor requirement is reduced and the power consumption is also reduced drastically. Arduino microcontroller is used for controlling the automation and that is powered with the switched mode power supply. By using this machine we can reduce the wages, investment cost and the floor space required.