This study investigates the systematic application of Value Stream Mapping (VSM) to identify and eliminate waste in a small-scale iron assembly line producing 17,700 units monthly. Despite adequate theoretical capacity (takt time: 13.661 minutes vs. cycle time: 7.80 minutes), the operation experienced prolonged lead times and workflow inefficiencies. Through comprehensive time studies of 21 production operations and detailed waste analysis following Taiichi Ohno's classification, this research quantifies process bottlenecks, capacity imbalances (ranging 64-370 units/hour), and non-value-added activities. The methodology employed direct observation, time-motion studies, operator interviews, and statistical hypothesis testing to validate improvement significance. Current state VSM revealed critical constraints including excessive motion waste (46% of assembly operations), sub-assembly bottlenecks, and unbalanced line capacities creating 42.9% unused capacity. A future state VSM incorporating Kanban pull systems, supermarket buffers, and 5S workplace organization was developed and validated. Quantitative results demonstrate: lead time reduction from 8.1 to 5.1 days (37%, p<0.05), assembly process time decreased from 5.6 to 5.0 minutes (10.7% improvement), and sub-assembly process time reduced from 1.2 to 1.0 minutes (16.7% improvement). Statistical validation confirmed improvement significance across all metrics. The study contributes actionable insights for resource-constrained electronics manufacturers, demonstrating that systematic waste elimination yields greater returns than capacity expansion. This research extends VSM literature by providing detailed bottleneck analysis methodology and statistical validation frameworks applicable to small-scale assembly operations in emerging economy contexts.