H Smart Manufacturing

How does a smart factory differ from smart manufacturing...and why does that matter?

Jan. 9, 2023
A smart factory maximizes the applications of smart manufacturing “enablers” to improve the existing, traditional manufacturing processes.

By Eric Whitley, L2L director of smart manufacturing

Smart manufacturing and the smart factory are both associated with Industry 4.0, but they are not the same thing. Many people are still misguided by these terms because some countries are still struggling to clearly define the concepts of the Fourth Industrial Revolution.

Before delving deeper into how smart manufacturing differs from the smart factory, consider the definitions of manufacturing and factory separately. Remember that manufacturing is a process, whereas a factory is a facility where manufacturing actually happens. Incorporating the smart or intelligent approach to these terms provides a deeper meaning.

Let’s decipher the difference between smart manufacturing and the smart factory by understanding their concepts, principles, goals, relationships, and impacts on each other.

What is smart manufacturing?

The Fourth Industrial Revolution is more than a decade old, but we have yet to see a standardized definition of smart manufacturing.

In 2019, ISO created the standard definition of smart manufacturing and later on referred to the Fourth Industrial Revolution as smart manufacturing. According to ISO, smart manufacturing is “manufacturing that improves its performance aspects with integrated and intelligent use of processes and resources in 'cyber', ‘physical,' and 'human' spheres to create and deliver products and services, which also collaborate with other domains within enterprise value chains.

ISO also introduced the terms  “enablers” and “enhancers” as the side-effects of smart manufacturing. The “enablers” refer to disruptive technologies that led to smart manufacturing, while the “enablers” are the design principles to make smart manufacturing successful.

What is a smart factory?

Adopting the principles of smart manufacturing in a manufacturing facility can make a factory smart. A smart factory maximizes the applications of smart manufacturing “enablers” to improve the existing, traditional manufacturing processes.

Since data in a smart factory is mostly digital, factories are increasingly going paperless. A smart factory operates in a way that makes the required data accessible in real-time, without physically going to specific factory departments, machines, or workers—everything is automated and inter-connected. A smart factory also uses smart manufacturing software to analyze data for process improvements. 

The reciprocal relationship between smart manufacturing and the smart factory

Smart manufacturing and the smart factory share the common goal of improvement by maximizing the use of advanced materials, processes and technology. However, that doesn't necessarily mean they're the same thing.

Smart manufacturing and the smart factory rely on each other to achieve this common goal. The smart factory takes full advantage of the principles and end-to-end solutions provided by smart manufacturing to reach its peak performance. Since fluctuations in consumer demands and market demands are inevitable, smart factories need to continuously drive improvement, efficiency and productivity to cope with these changes. 

Smart manufacturing also takes advantage of these advancements and initiatives to unlock the true potential of each technology and strategy. As smart manufacturing transforms traditional factories into smart factories, its implementation also drives the digital transformation of the manufacturing industry.

To understand this idea better, you need to be familiar with the way a smart factory operates—to see the role of smart manufacturing in its operation, but also how smart factories affect the smart-manufacturing process.

The role of smart manufacturing in the operation of a smart factory

Let's examine the roles of smart-manufacturing technology and solutions in the manufacturing processes within a smart factory.

    1. Smart manufacturing processes:

Automation and digital technology are already a thing, even in traditional factories. Smart factories, however, have more advanced automation and implement smart technology into their workflows. 

Intelligent machines, instruments and equipment in manufacturing operations maximize the application of IIoT, artificial intelligence, wireless connectivity, and cloud computing. Using sensors and machine learning, these connected intelligent machines can exchange and analyze data. This, in turn, is great for problem detection and prediction, predictive maintenance, and quick adaptation to alternative manufacturing processes or changing conditions in the manufacturing operation.

Industrial and collaborative robots are some of the intelligent machines in a smart factory. They can move—with autonomous mobility—across a factory floor, making the manufacturing process more precise and efficient.

    2. Smart manufacturing systems: 

Almost all processes in smart factories are computer-controlled—this facilitates management and process monitoring. These processes use software and computer programs such as PLM, CMMS, ERP, CAFM, and EAM. These systems are often installed on intelligent machines and computers accessible to human workers, managers, and other related stakeholders in the smart factory, such as suppliers, subcontractors, and customers.

The manufacturing systems empowered by big data, data analytics, cybersecurity, and the IoT provide transparent, real-time data access and analysis, as well as optimized production systems. With the help of these innovative solutions, organizations can achieve immense efficiency gains and cost savings.

Smart factories are reaching their key goals—being connected, optimized, transparent, proactive, and agile—by implementing smart-manufacturing technology, strategies and solutions.

Impacts of the smart factory on smart manufacturing

Despite the obvious benefits of transforming into a smart factory, according to World Economic Forum, the global manufacturing industry has been slow to adopt advanced technology. In fact, the Global Lighthouse Network had only 114 members in 2021. This community includes leading manufacturers applying advanced technology from all over the world. 

These numbers may be small for now: even at the start of 2023 we are still the early phase of transformation to smart factories. However, it is believed that the number will continue to rise. In fact, smart factories drive competitiveness in industry, and the technology from smart manufacturing continuously emerges in different industries.

Going back to the definition of smart manufacturing, let’s see some of the impacts of smart factories on the ‘cyber’, ‘physical’, and human spheres of smart manufacturing:

  1. Cyber spheres—according to a survey conducted by Capgemini, 80% of organizations agree that cybersecurity is a critical component of a smart factory. Security risks have led smart factories and organizations to improve their cybersecurity frameworks. The need for heightened cybersecurity in smart factories has also contributed to the growth of the cybersecurity industry. Cybersecurity may be smart manufacturing’s weak point currently, but the challenge to improve will bring a positive effect on individual organizations and the global industry.
  2. Physical spheres—the development of smart machines and smart materials is clearly one of the benefits smart factories will have on smart manufacturing in the physical realm. Not only does this simplify daily tasks, but it also lessens waste production and energy use.
  3. Human spheres—some are still concerned that robots and machines will replace humans’ jobs in smart factories. What they don't realize is that these factories are actually making jobs easier for people, opening up new career opportunities. 


The concepts of smart manufacturing and the smart factory have been used interchangeably in the last few years. These two terms are completely different, but they both reflect the manufacturing industry’s need to adapt quickly in this era of rapid, digitally driven change. Understanding the key differences between the concepts will enable us to best capitalize on both.