The International Organization for Standardization (ISO) has just completed a major effort on a new standard ISO 10303-242 titled “Managed Model Based 3D Engineering.” It belongs to a family of standards called STEP (STandard for the Exchange of Product model data). ISO 10303-242 is also called the STEP Application Protocol 242 (STEP AP 242, for short). The intent of STEP AP 242 is to support a manufacturing enterprise with a range of standardized information models that flow through a long and wide “digital thread” that makes the manufacturing systems in the enterprise smart. One such standardized information model is that of tolerances specified on a product’s geometry so that the product can be manufactured according to the specifications. This paper describes the attributes of smart manufacturing systems, the capabilities of STEP AP 242 in handling tolerance information associated with product geometry, and how these capabilities enable the manufacturing systems to be smart.