Smart Factories have dominated discussions and conferences for the past few years. It is, in fact, a ground-breaking concept and has the capability of being a game changer, which can create a sustainable competitive advantage. They have the potential to address many challenges that the manufacturing world faces today. So much so that, sometimes they are projected as “panacea” to most of the problems. Experience of early adopters does suggest that they can help us solve many problems. However, companies face challenges in terms of structuring their smart factory journey into phases, identifying the pre-requisites, selecting the right vendor(s), justifying the ROI, forming the right teams, etc. This paper attempts to provide a high-level approach to set up a smart factory and tries to answer some of the questions raised.