Prerequisite for hot water recovery in the dairy and beverage industry is the use of heat storage, such as stratified tanks. Total Site Heat Integration enables the targeting of heat recovery potential, the concrete identification of suitable sinks and source profiles and the dimensioning of intermediate circuits and storages. For a cost and energy efficient storage, the aim to maintain stratification by suitable thermocline control management. Dynamic simulation enables a reliable estimation of energy savings and correct storage/control design considering the changing operation times, source and sink loads as well as thermal inertias. This poses two challenges: model accuracy and acceptable simulation time. A stratified tank model with Variable Layer Height (VLH) is evolved reducing numeric diffusion effects. A sensitive analysis shows the increased accuracy with acceptable simulation time. As part of a case study, thermocline growth due to numeric diffusion is reduced up to approximately 35 % by a VLH model. The model is simulated for a case study in the dairy industry. It is shown that up to 94 % of the total heat recovery target can be achieved by the modelled heat recovery loop based on a stratified tank and the applied system control.