In response to the escalating demands and heightened competition within industries, a shift beyond mass production has become imperative. The advent of Industry 4.0 technologies has proven instrumental in meeting the requirements of mass personalization, paving the way for the integration of smart products in the industrial landscape. While the pursuit of smart solutions is on the rise, conventional appliances continue to be in regular use, highlighting the need for a seamless transition with minimal disruption to established production lines. The evolution towards smart products extends beyond individual devices to encompass broader systems like smart homes and smart buildings, ultimately contributing to the realization of smart cities.

The transformation from traditional to smart homes has been catalyzed by Industry 4.0, with the Internet of Things (IoT) emerging as a key player in facilitating real-time data collection and offering cost-effective predictive maintenance. The interconnected web of sensors, facilitated by IoT, opens avenues for personalized services through extensive Big Data analytics. As smart devices yield substantial benefits, industries are embracing digital transformation, driven by IoT, with a focus on enhancing energy efficiency, enabling personalization, and implementing advanced predictive maintenance practices.

While reaping the advantages of Industry 4.0 is appealing, it presents challenges, particularly in developing countries where manufacturing, often centered around industries like home appliances, serves as the backbone of the economy. The incorporation of essential data, sensors, actuators, and advanced technologies into traditional production lines poses an initial hurdle. Additionally, leveraging IoT platforms to enrich data and transform it into valuable information proves to be crucial for the successful manufacturing of smart appliances. Furthermore, academia faces obstacles in providing practical, IoT-enabled industry-led experiments to pave the way for the next generation of smart home systems.

Industry 4.0 bestows appliances with an array of benefits, encompassing personalization, predictive capabilities, energy conservation, defect reduction, and quality enhancement. IoT acts as the linchpin connecting diverse elements with its characteristics such as heterogeneity, scale, sensing capabilities, location awareness, and personalization. The amalgamation of intelligence and real-time connectivity results in the creation of smart systems, often fortified with edge computing and IoT to access Cloud services. This convergence facilitates seamless integration between physical components, networks, IoT, big data, artificial intelligence (AI), Cloud capacity, and processes, giving rise to sophisticated smart systems.

IoT’s role extends beyond mere connectivity, fulfilling four essential functionalities: real-time monitoring, controlling, optimization, and autonomy. Through IoT, smart systems benefit from a monitoring dashboard and notification system, providing immediate and direct insights. The transformative power of IoT lies in its ability to convert data into information, knowledge, and wisdom (DIKW), enabling real-time monitoring, notification, and predictive maintenance at both the product and service levels within smart environments.

IoT has revolutionized traditional business models, ushering in a digital paradigm characterized by heightened real-time connectivity, enhanced data-gathering capabilities, and advanced analytics. Consequently, data has evolved into a valuable resource, empowering businesses to cater to customer demands for cost-effective Smart Personalized Systems (SPS) with unprecedented levels of personalization. The home appliance sector, an early adopter of cutting-edge technologies like IoT and Cloud since the early 2010s, stands out as a pioneer industry in this transformative wave.