Milk loss in dairy factories in Thailand is a complicated problem that results from several steps in the dairy manufacturing process. Further losses may result from processing inefficiencies, including spills, broken equipment, and antiquated technologies. The cleaning process, filling, and packaging method frequently cause spoilage, exacerbating the problem. Significant technical expenditures, sophisticated processing, and packaging solutions are all part of the effort to minimize spoilage and shrink these losses. Furthermore, this study investigates creative waste valorization techniques to turn wasted milk into valuable byproducts that support sustainable manufacturing and the circular economy. It is crucial to accurately quantify milk loss and identify its specific occurrence points within the production process. Implementing the waste hierarchy and valorization strategies mitigates adverse environmental consequences and provides financial benefits, including cost savings and additional revenue. When taken as a whole, these ambitions aim to increase sustainability, lower milk loss, and boost the profitability of Thailand’s dairy industry.