This article discusses the issues of how to reduce pasteurized milk defects as part of waste in a lean production system. Product defects are the most important problem faced by the dairy enterprise daily. This problem makes production costs higher and decreases the profit. A set of seven tools and methods is used to identify and analyse the defect problem, and then make a solution plan. Value Stream Mapping is used to describe the current condition of the production system and make improvement planning. The lean production concept has been successfully used not only to find ways to reduce product defect, but also to plan and eliminate other wastes in the pasteurized-homogenized milk production process. Waste found and eliminated are production lead time, transportation, waiting time, defective products, and downtime machines. Overall, the research results in a reduction of overtime for 41 minutes, and make downtime on the packaging machine to become 0 minutes.