One of the important lean manufacturing techniques is Value Stream Mapping (VSM). Lean approach is implemented by using VSM. It collects the detailed information at every workstation. This information includes set up time; Work in Process Inventory (WIP), resource utilization, Value adding activities, non-value adding activities and detailed information about the flow from raw materials to finish products. Process simulation performs what – if analysis and helps management to take decision for the investment. In this work, application of VSM is presented by a case study in reputed Switchgear manufacturing company for the assembly line of Circuit Breaker. Packing of current transformer was selected for this study. After the analysis of current state, various gap areas were identified and future state map was proposed in which four layouts were simulated using Arena simulation software. Process was simulated under different circumstances to obtain optimal solution. There was considerable reduction in Work in Process (WIP) inventory, Cycle time, Manpower, handling, accidents, rejection and lead time. This has also helped to improve the quality and image of the organization. Thus, practitioners can use these tools to take correct decision for manufacturing new products. This study can also be extended for Cost analysis.