Meeting customer demands require manufacturing systems with a high degree of flexibility in the same time as the use of automation is becoming critical for competition. This is challenging, especially for SMEs with their inferior economical and competence conditions. This paper presents a new set up where the Factory-in-a-Box concept has been realized for a small manufacturing company with a profile of craftsmanship and small volumes. The objective of this paper is to discuss the possibility for SMEs to use automation and the Factory-in-a-box-concept to stay competitive and also the Factory-in-a-Box concept as means for realizing a Product-Service System.