Global competition and increased variety in products have created challenges for manufacturing companies. One solution to handle the variety in production is to use reconfigurable manufacturing systems (RMS). These are modular systems where machines can be rearranged depending on what is being manufactured. However, implementing a rearrangeable system drastically increases complexity, among which one challenge with RMS is how to design a new layout for a customized product in a highly autonomous and responsive fashion, known as the layout design problem. In this paper, we combine several Industry 4.0 technologies, i.e., IIoT, digital twin, simulation, advanced robotics, and artificial intelligence (AI), together with optimization to create a smart layout design system for RMS. The system automates the layout design process of RMS and removes the need for humans to design a new layout of the system.