Following the challenges faced by smallholder dairy farmers in sustaining dairy processing industries’ (DPIs) demand, this study sought to propose an operational model to meet DPIs’ demand for milk and enhance the capacity utilisation of dairy processing industries in Tanzania. The study employed a sequential explanatory mixed design, where qualitative insights drawn from 23 dairy stakeholders were supported by bibliometric data from the Scopus database. Qualitative data obtained through interviews was analysed using both content-thematic and SWOT analysis techniques. SWOT outputs were subjected to TOWS analysis, where eco-commercial dairy farms’ strategy was prioritised using the urgency-importance approach. The prioritised strategy was further subjected to a business model canvas to provide a clear blueprint for the operationalization of the eco-commercial dairy farms in Tanzania. In the same vein, the study highlights how commercial dairy farms can co-work with smallholder dairy farmers, enabling them to overcome their limitations and access high-value markets as out-growers. This study contributes to the operationalization of commercial dairy farms in terms of both knowledge and practice. Furthermore, while the existing literature on commercial dairy farms primarily focuses on animal health and milk productivity, this study addresses the linkage gap in the literature between commercial dairy farms and dairy processing industries.