In the textile industry, the demand for high-quality fabrics and cost-efficient production processes has increased significantly. Heat setting is a crucial step in fabric finishing and plays a vital role in determining the quality and stability of spandex-based knitted fabrics. As mechanical properties of fabrics and operational efficiency often fall short in conventional heat setting, innovative approaches, such as pre-heat setting, have gained significant attention in recent times. This research demonstrates the integration of a pre-heat-setting process within the conventional heat-setting framework for spandex-based knitted fabrics (i.e. Lycra single jersey, Lycra terry, and Lycra viscose). Through a series of industrial trials, the research presents the effects of pre-heat setting on fabric dimensional stability, coefficient of variation % of fabric grams per square meter, bursting strength, and abrasion resistance. Findings indicate that fabrics treated with pre-heat setting show improvements in increased bursting strength, reduced shrinkage, and decreased spirality compared to those treated using traditional heat-setting methods. Moreover, the pre-heat setting process reduces the heat-setting time by ranging from 28 to 60%, depending on the fabric type, and the machine speed increases by around 43% on average across the fabric types. This study also evaluates the detailed production cost analysis and shows that production cost decreased from 0.064 to 0.040 USD/kg when pre-heat setting was incorporated. These findings underscore the transformative potential of pre-heat setting as a highly effective solution for enhancing fabric quality and operational efficiency, offering substantial production cost savings for the textile industry.