IKM Tani Lestari, a wood processing small and medium-sized enterprise (SME), generates approximately 400 kg of sawdust waste daily. This accumulation, if left unmanaged, can lead to significant environmental pollution. To address this issue, the Green Manufacturing method was applied to analyze and reduce waste, thereby increasing the added value of the products. The research involved direct observation and interviews, revealing that the implementation of Green Manufacturing effectively reduced waste and enhanced the value of the processed products by 50%. The study employed Value Stream Mapping (VSM) to identify and improve waste management processes. Initially, sawdust waste was sold directly every 15 days, generating a maximum income of Rp. 1,200,000. Through the application of Green Manufacturing principles, the waste processing time was reduced to 3 days before being sold, thereby increasing the product's market value and reducing environmental impact. This method not only streamlined waste management but also resulted in a significant reduction in non-value-added (NVA) activities from 15 days to 5 minutes. The improved process highlighted by Future Stream Mapping (FSM) demonstrated a 50% increase in value- added (VA) activities, from 6 minutes to 9 minutes. This enhancement in operational efficiency directly contributed to the welfare of the employees, as the increased profits from the sale of processed waste could be reinvested into improving their working conditions and overall well-being. The findings underscore the potential of Green Manufacturing to transform waste management practices in the wood processing industry, leading to both economic and environmental benefits.