The smart manufacturing regime with the aid of AI-IoT introduced into the cell of the CNC machining section altered the efficiency, sustainability of operations, and the engagement of workforce to a considerable degree. With the adoption of vibration, temperature, spindle load, and current sensors on conventional CNC machines, the local edge devices would process the real-time machine health data via Message Queuing Telemetry Transport (MQTT) to transmit the data in real-time. Predictive maintenance based on cloud-based AI models allowed anticipating the failures of tools with 4–6 h accuracy and reducing the problem of dimensional deviation. The shopfloor AR ensures that the operators and supervisors on the shopfloor have the situational information and agency that Industry 5.0 strives towards through its human principles. Moreover, intelligent energy scheduling based on AI resulted in an enormous decrease in the peak-hour power consumption. In six months the plant reported 40 percent reduction in unplanned breakdowns, savings of 6.2 lakh through reduction of scrap rate, an increase of 9 percent on time delivered and a decrease of 18 percent in the cost of peak energy.