Industry 5.0 introduces a transformative approach to manufacturing by integrating artificial intelligence with human expertise to create smart and sustainable production systems. Industry 4.0 focused on automation and connectivity, this new phase emphasizes on human-AI collaboration, efficiency, and environmental responsibility. AI-driven predictive analytics, digital twins, and collaborative robotics improve operational flexibility, optimize resource utilization, and improve quality control. The success of Industry 5.0 depends on a strategic approach that aligns technological advancements with ethical, economic, and environmental considerations. Implementing AI in manufacturing not only improves productivity but also ensures long-term sustainability, positioning industries for a future that balances innovation with responsible industrial practices. The main goal of this paper was to develop a theoretical model for smart and sustainable production in enterprises.