This document discusses Industry 4.0 and smart factories. It begins by outlining the stages of the industrial revolution and key technologies of Industry 4.0 like IoT, cloud computing, and augmented reality. It then describes the philosophy of Industry 4.0, including how new information technologies can help address sustainability issues. System architectures for smart factories are presented, involving physical resources connected through an industrial network to cloud systems and supervision terminals. Technical challenges of implementing smart factories are discussed, along with examples of smart factory prototypes and their benefits.