Wikipedia
A microfactory refers to a small dimension factory able to produce small dimension products. The term was proposed by the Mechanical Engineer Laboratory (MEL) of Japan in 1990. The microfactory main advantages are to save great amount of resources like space, energy, materials and time.
Due to their reduced dimensions, microfactories should be highly automated. They might contain automatic machine tools, assembly systems, quality inspection systems, material feed systems, waste elimination systems, a system to evaluate tool deterioration and a system to replace tools.
At least one proposed microfactory is being designed to make many of its own parts, i.e., is a partially self-replicating machine.
Local Motors has microfactories in Phoenix, Ariz. and Knoxville, Tenn. The company builds its signature products, like the Rally Fighter prerunner sports car right in its microfactories.