What is Smart Manufacturing? 


Over the past few years, the concept of Smart Manufacturing has been evolving among early adopters, expert practitioners, and industry strategists. CESMII, The Smart Manufacturing Institute, has been a key organization working with industry leaders on the Smart Manufacturing journey from its inception as the continuation of work that started at the Smart Manufacturing Leadership Coalition (SMLC).

To realize CESMII’s mission to democratize Smart Manufacturing innovation, it is not only necessary to democratize the technology, but also necessary to provide wide access to the knowledge required to implement the strategies and leverage the solutions and insights in a more digitally enabled manufacturing ecosystem. In the last few years, organizations including SMLC, NIST, and MESA International have been providing guidelines and documenting the progress of manufacturers towards Smart Manufacturing. They have all agreed on key ingredients for Smart Manufacturing including real-time integration and information-driven collaboration for a highly efficient digital manufacturing ecosystem.

Smart Manufacturing researchers, architects, and practitioners in the CESMII community have been developing, implementing, and refining the integration and analysis methodologies and CESMII has published an updated definition of Smart Manufacturing along with additional guidance to help industry and educators accelerate the next phase of the journey, the democratization of Smart Manufacturing.

Definition of Smart Manufacturing

The 15th Anniversary of Smart Manufacturing

On the 15th anniversary of Smart Manufacturing, co-founder Jim Davis celebrates the people, partnerships, and events that led to Smart Manufacturing as a national priority. The paper takes us from Smart Manufacturing’s beginnings, to how CESMII (the Clean Energy Smart Manufacturing Innovation Institute sponsored by DOE) came into being, and to CESMII as a key public-private partnership for catalyzing Smart Manufacturing’s broad impact on global competitiveness and environmental sustainability throughout U.S. manufacturing.

15 years ago the term Smart Manufacturing was coined as a shortened version of Smart (predictive, preventive and proactive), zero-incident, zero-emissions Manufacturing. This year is a singular moment in time to account for SM’s origins, celebrate (just a little) how far SM has progressed, and look forward to SM’s full impact now that its roots in AI have come full circle.”

Jim Davis

CESMII Principal CIO Adviser, UCLA

Original Smart Manufacturing Definition

Smart Manufacturing is the information-driven, event-driven, efficient and collaborative orchestration of business, physical and digital processes within plants, factories and across the entire value chain. ​

In Smart Manufacturing, resources and processes are integrated, monitored, and continuously evaluated with the sensing, information, process modeling, predictive analytics, and workflow needed to automate routine actions, and prescribe action for non-routine situations. ​

In Smart Manufacturing, organizations, people and technology work in synergy via processes and technology-based solutions that are secure​, scalable​, flat & real-time​, open & interoperable​, proactive & semi-autonomous​, orchestrated & resilient​, and sustainable​.

Smart Manufacturing is transformational, radically impacting the performance of the manufacturing ecosystem through measurable improvements in areas such as: speed, agility, quality, throughput, costs/profitability, safety, asset reliability and energy productivity. ​ Consequently, improving profitability which in turn accelerates investments in innovation.

This Smart Manufacturing definition is for all to use, however we would prefer to have attribution –  “by CESMII – The Smart Manufacturing Institute”

What Smart Manufacturing means to CESMII

First Principles of Smart Manufacturing

CESMII defines these First Principles of Smart Manufacturing™ to ensure development and deployment of SM technology-based solutions that are tied to the desired strategic outcomes of manufacturing businesses. True Smart Manufacturing is an “and” strategy requiring all principles to be followed to ensure success

First Principles of Smart Manufacturing

Written by Conrad Leiva, CESMII’s Vice President of Ecosystem & Workforce Development, this paper summarizes the practices that define smart manufacturing as developed by the industry leaders, early adopters, and expert practitioners working in the ecosystem at CESMII. It will further explain how the Seven Principles of Smart Manufacturing work collectively to achieve new levels of connectivity, intelligence and automation in the manufacturing ecosystem.

Open & Interoperable

Openness and interoperability in Smart Manufacturing empower a connected ecosystem of devices, systems, people, services, and partners communicating in a natural yet structured manner. Smart Manufacturing works across on-premise, edge and cloud computing platforms, exchanging information in a collaborative ecosystem with broad adoption of machine-to-machine (M2M), application-to-application (A2A), and business-to-business (B2B) integration standards and APIs that enable multi-vendor hardware and software plug-and-play solutions.

Sustainable & Energy Efficient

Smart Manufacturing drives sustainable manufacturing of products through processes and systems that optimize use of resources, minimize negative environmental impacts, and maximize positive socio-economic impacts. Smart Manufacturing optimizes the use of energy as a direct ingredient, instead of treating it as overhead, and contributes to a circular product lifecycle by facilitating information for reuse, remanufacturing, and recycling scenarios.


Smart Manufacturing provides broad, secure connectivity among devices, processes, people, and businesses in the ecosystem, securing data integrity, protecting intellectual property, shielding against cyberattacks, and maintaining business continuity with minimal impact to performance of the overall network of networks. Security starts with identity verification schemes for every “thing” in the ecosystem, implementing schemes for access control, data traffic monitoring, fault-tolerance, high availability, anomaly detection, issue containment, and seamless data recovery.


Smart Manufacturing scales across all functions, facilities and the entire value chain with cost and performance growing linearly—instead of exponentially—as load and complexities increase. Systems, components and resources are added, modified, replaced, or removed with ease to accommodate changing demands. Smart Manufacturing is democratized for adoption by the entire value chain, including smaller manufacturing suppliers.

Resilient & Orchestrated

Smart Manufacturing adapts to schedule and product changes with minimal intervention, easy reconfiguration, and optimized process and material flows. Smart Manufacturing is quick to react to changes in demand, resilient to disruption and capable of maintaining business continuity through adaptability, modularity, and minimal redundancy. An Smart Manufacturing ecosystem leverages collaborative decision-making and orchestration to get the right product to the right place at the right time.

Flat & Real-time

In Smart Manufacturing, resources and processes are digitally integrated, monitored, and continuously evaluated based on all available contextual information to support near real-time, informed decision making. Near real-time means: (i) event driven versus waiting on periodic updates, and (ii) as close to real-time as possible where needed. The information flow across the enterprise and value chain is flattened, enabling more autonomy and faster decentralized decisions with enhanced visualization of information, metrics and analytics.

Proactive & Semi-automous

Smart Manufacturing moves beyond static dashboards and reporting practices to proactive and semi-autonomous processes that act on near real-time information. Automated, predictive analyses trigger automated decisions on routine situations and alert employees to act on non-routine situations with prescriptive recommendations. Predictive and prescriptive software techniques leverage digital versions of the physical products, equipment, and processes, including simulations and mathematical models.


Smart Manufacturing is transformational, radically impacting the performance of the manufacturing ecosystem through measurable improvements in areas such as:

    Cost & Profitability

    Automation reduces cycle time, labor time, and quality errors. Continuously monitored resources and AI-driven insights alert on unusual patterns and suggest improvements on use of resources.

    Asset Reliability

    Asset performance monitoring leads to higher levels of utilization and predictive insights leads to higher reliability.


    Monitor quality aspects of the product and process in real-time to reduce process variability, eliminate undetected errors and catch issues as early as possible.

    Energy Productivity

    Energy cost is directly saved as processes are optimized based on energy usage insights, and indirectly saved as waste of resources is reduced by reducing defects, scrap, and overproduction of inventory in a more efficient supply chain.


    Insights drive event-driven autonomous actions for routine situations and enhanced human decisions for non-routine situations with higher levels of transparency and speed in the manufacturing ecosystem.

    Agility & Resiliency

    Modular solutions integrated with open interoperable APIs to quickly reconfigured to scale up or down, introduce new products, create one off runs, or high-mix manufacturing opportunities.


    Technology and information enabled enhanced operating models, personalized product and service offerings, and innovative partner ecosystems to drive higher revenue and customer value.

    Partnering Opportunities

    Ready for the speed and data exchange demands of the new digital manufacturing ecosystem.