A Dissertation Submitted in Partial/Fulfillment of the Requirements for the Master’s Degree of Science in Procurement and Supply Chain Management of Mzumbe UniversityThe study aimed at analysis of local dairy value chain for smallholder pastoralists. The first objective was to identify the structure of local diary value chain and key actors’ roles. This study found that, the local dairy value chain in Simanjiro consist five (5) distinct stages, namely; input supply, milk production, trading, processing and consumption. The main actors in the dairy value chain were input suppliers, milk producers, milk traders, milk processors and milk consumers. The second objective was to explore chain strategies developed by chain actors in market milking. Results showed that; actors’ chain-strategies developed were; contractual agreement between pastoralists and milk buyers, actors often attending trainings on milk marketing, and pastoralists’ collective actions whereby benefits are accrued by being member of milk marketing groups. Third objective was to identify business challenges facing local dairy value chain actors in the study area. Findings revealed that, challenges identified to exist were; Seasonal fluctuations in milk availability, Livestock diseases, lack/few market channels for milk and milk products, poor cold chain infrastructures, facility breakdowns, quality aspects and low capacity of existing processing units. The conclusions attained through findings discussion recommended the following; Sensitize value chain concept as an economic tool to develop milk and milk products value chain, Improving efforts of milk producers on milk production and livestock management, and improvement of existing small scale milk processing units.