AI-Driven Smart Factories: Transforming Manufacturing Through Intelligence and Automation

Abstract

The rapid adoption of artificial intelligence in manufacturing promises transformative benefits but introduces complex challenges. The balance between these dynamics remains underexplored. This study examines how AI-driven smart factories, central to Industry 4.0, optimize production while addressing risks like cybersecurity, algorithmic biases, and regulatory gaps. Through a systematic literature review and case study analysis of industries like automotive and pharmaceuticals, the paper evaluates AI’s role in enhancing efficiency, sustainability, and customization, alongside ethical and environmental concerns. The study proposes a stepwise framework for responsible AI integration, offering actionable insights for manufacturers. By addressing these issues, the paper contributes to sustainable and ethical manufacturing innovation, guiding industry leaders and policymakers toward resilient smart factory ecosystems.