Arungalai Anbarasu serves on Körber‘s Group Executive Board, heads Business Area Technologies and drives the Group’s innovation strategy.
The concept of a smart factory is no longer a futuristic thought at the margins of industry. It has become a reference point in discussions about industrial strategy, operational resilience and competitiveness. Across boardrooms and industry forums, leaders are talking about connected production, AI-driven optimization, autonomous systems, lights-out operations and dark factories with intensity. The reason isn’t technological fascination alone but structural pressure.
Many industrial societies are facing aging populations, tightening labor markets and growing shortages of skilled workers. At the same time, manufacturers are expected to maintain or increase productivity, build more resilient operations, use resources intelligently and advance the twin transition of digitalization without losing sight of sustainability.
In other words, it’s increasingly about doing more with less. An April 2026 Roland Berger report stated that labor scarcity is no longer a cyclical issue but a structural one. That’s why the concept of the smart factory has moved to a strategic necessity.
This context matters because it changes how I think the term should be understood. A smart factory isn’t a more digital factory, nor is it only a synonym for an unmanned “dark factory.” Terms such as “lights-out factory” or “dark factory” may describe a possible end state in selected environments, but in my view, they’re too narrow to define the broader industrial ambition.
What matters more is the idea of an operating model in which machines, systems, material flows and decisions become more connected, automated and intelligent over time. The broader ambition is to build factories that are more adaptive, resilient and resource-aware without losing the human judgment that remains essential in complex environments.
I see the smart factory sitting at the intersection of major industrial trends and megatrends. Demographic change is increasing the need for automation. Technology disruption is expanding what’s operationally possible through AI, digital twins, connected systems and intelligent control. Geopolitical and economic volatility are pushing resilience higher up the agenda. Sustainability is becoming a baseline expectation that must be embedded into operations, not added afterward.
These forces explain why the smart factory has become such a relevant industrial ambition, but they don’t yet explain how companies should approach the road toward it. That’s where I believe the maturity perspective becomes useful.
A Question Of Maturity
The real challenge is how decision makers approach the journey in a way that’s operationally realistic. Too often, the conversation begins with the end state: autonomous response, self-optimizing production or factories that run with little direct human presence.
This can obscure the harder truth, which is that smart factories aren’t built in one leap, and they aren’t delivered through a single transformation project. In some cases, full autonomy may not even be the right ambition.
For me, it’s viable to imagine that journey through five stages of maturity:
1. Manual Or Isolated Operations: Work remains heavily human-driven, and systems are only loosely integrated.
2. The Connected Stage: Machines and systems begin to exchange data and create transparency across operations.
3. Integrated Automation: Production and material flows become more coordinated to improve productivity and reduce manual work.
4. Emergence Of Intelligent Operations: Robotics, sensing, digital twins, unified control and AI-driven optimization enable more predictive and self-improving performance.
5. Fully Orchestrated, Increasingly Autonomous Smart Factory: Regenerative priorities such as energy-efficient manufacturing, circularity and sustainable material strategies move into the operating core.
Avoid Looking Only At The End Game
This staged view changes the leadership question. It moves away from debating how the organization can build the factory of the future and toward determining the next right step for the organization’s current level of maturity.
Most industrial organizations are dealing with legacy systems, established assets, fragmented data landscapes and workforce realities. A maturity-based road map recognizes that transformation must be cumulative, pragmatic and anchored in operational value.
The maturity perspective helps decision makers focus on the next meaningful step rather than an abstract end state. Additionally, the urgency behind this journey is visible. Companies are accelerating automation in production and logistics, reducing manual work through robotics and intelligent systems and pushing toward more data-driven, AI-enabled optimization. Together, these developments reflect a broader shift toward more autonomous and adaptive industrial environments.
What enables progress across the smart factory journey is the ability to integrate multiple capabilities into one coherent system that connects the physical and digital worlds. The real challenge isn’t the introduction of individual tools but the orchestration of hardware, software, digital and AI technologies into an operating model that works at scale.
This is also where I would bring in Industry 5.0. It’s a useful frame precisely because it shifts the discussion beyond automation alone. The relevant ambition isn’t simply to remove labor or maximize machine autonomy at any cost. It’s to create industrial systems that combine people, resilience and sustainability with technological intelligence, as the World Economic Forum analyzed. Seen that way, the smart factory becomes a broader story about balancing productivity, adaptability and responsible resource use in a more integrated way.
For decision makers, the smart factory is best understood not as a one-time breakthrough or a distant autonomous ideal but as a leadership road map. It requires clarity about current maturity, discipline in sequencing the next capability to build and a long-term view of how technologies, data and people must work together in one coherent operating model. Critically, ROI isn’t something that appears only at the final stage of maturity. It’s already realized at stage one.
Factories won’t become autonomous overnight, but they can become more connected, more adaptive, more resilient and more intelligent. That’s the real road of the smart factory journey. For industrial leaders, the task is to lead the sequence of decisions that makes that future real.
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