Smart factory evolves by adding new functions or upgrading existing functions to meet the needs of manufacturers in the use stage of the life cycle. To reduce complexity of smart factory, these functions must be carefully designed considering interactions with other functions. This study analyzes integration of functions situated in the different layers in the functional hierarchy of smart factory. In this study, a health monitoring system for cutting tools in a shop floor, which offers a function to manage the lifetime of cutting tools, is presented. The system is integrated with a production scheduling system, which offers a function to schedule machining processes considering efficient usage of machines as well as cutting tools, while maintaining the quality machining processes. Primary evaluation of the functional integration shows that activities in the shop floor regarding selection and replacement of cutting tools are considered in defining production schedules. It also shows that such functional integration results in increase in complexity regarding the behavioral model of humans in smart factory.
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