This paper discusses the integration of Smart Factory technology into Industrial and Systems Engineering education, focusing on its transformative impact and educational implications. Smart factories are revolutionizing the modern manufacturing industry by leveraging Cyber-Physical Systems (CPS) and cutting-edge technologies. Through the integration of Artificial Intelligence (AI) and the Internet of Things (IoT), these factories enhance production efficiency, minimize costs, and elevate the overall quality of their goods and services. Understanding the impact of smart factories and the educational implications that follow from this technology is crucial. Doing so enables us to prepare students for the challenges of the modern manufacturing industry, fostering a more informed, skilled, and adaptable workforce. Therefore, this research highlights the benefits of incorporating smart factory concepts into industrial engineering education to prepare students for “Industry 4.0” challenges. By providing hands-on experience with smart factory technology, this research aims to enhance industrial engineering students' theoretical knowledge and practical understanding of smart factories.