Smart factory is a small step towards INDUSTRY 4.0 which was initiated by German government in an aim to computerize traditional manufacturing process. It represents a huge jump towards future from a conventional automated system to a fully functional connected system. And also it replaces pyramid flow of information Automation has always been a part of the manufacturing process for decades. We have seen various kind of automation (simple or complicated) across factory floors. However, the word “automation” means single, discrete process. In order to create a smart factory we need to merge this discrete process into continuous process, we can achieve this with the help of cyber-physical systems called Internet of Things (IoT).With recent advancement in Machine learning, sophisticated cyber-physical systems have been developed which combine physical machines with business models. Where machines, products and process are connected to network so they interact with one another and data flow between them is continuous. Using these data/information entire production process can be controlled according to the customer demand. It’s more like combining Business sides with manufacturing side, This in turn improves customer’s relationship with companies.WHAT MAKES SMART FACTORY SO SPECIAL?Smart Factory caught center of attention at HANNOVER MESSE. What makes it so special is that’s its just not automation but beyond that. Smart factories are designed to operate autonomous but they can also connect to a global network. The ultimate goal of smart factory is to be flexible as much as possible, ability to transform and adapt itself to the changing environment – like changing customer needs, expansion of business to new market, production of new products, process and services. Smart factory provides feasible solution for some of the issues. It has the ability to learn and meet changing requirements from data in real time. And can also make a decision which helps companies to avoid operational downtime, failures, delays, cost and other losses.There are various parameters involved in building a smart factory one of them is “connected”. Smart factories require the machines and materials to be connected in order to generate the data which can be used to make real-time decisions. Data generation from new machine is easy because most of them are advanced but in factories there do exists older model machine as a backup or rarely used. Data generation from these machines is not that easy but doable, smart sensors are equipped in and around machines so the data generation is continuous, this data both from new and older machines are verified and updated. Combining data’s from operations, business, suppliers and customers enables us to provide efficient supply-chain processes, and thereby increasing supply network value.Second feature in smart factory is optimization which allows process to be executed with minimal human intervention and more reliable. The autonomous work(job) flows, harmonization of work in progress products or finished products or raw materials, improved job tracking and setting up, and how much energy consumed in the smart factory can increase quality, and reduce costs and also throwaway(waste).Transparency plays a vital role in smart factory. It’s always better to capture Real-time data from processes or work in progress and convert the captured data into actionable insights, either for humans or autonomous decision making. A transparent network can provide a clear vision of what is happening across the factory floor and ensure the company by providing accurate information using aids such as real-time updates on production and real time production positioning, etc.Dedicated system, employees and computers can anticipate when the downtime occurs and can act accordingly in preference to taking actions after problem arises. This feature can include identifying problems, filling up inventory or stocks, identifying and controlling quality related problems and checking safety and maintenance concerns. The benefits of the smart factory to forecast future outcomes based on historical data and real-time data can improve throughput time, tak time, quality, and avoid problems related to safety. Responsive flexibility allows the smart factory to adapt according to changing product demands with little human intervention. An advanced smart factory has the capacity to change its configuration (machines and other devices) and flow of material depending on the customer demand .Additionally; flexibility can improve throughput time and can become more flexible schedulingThese features provide manufacturers greater visibility across their factory floors, and allow them to navigate some of the problems faced by more traditional factories. The goal of a smart factory is to improve product quality, productivity and responsiveness to suppliers and customer demand and services.