Industry 4.0, also termed smart manufacturing, has revolutionized the industrial world with cutting-edge technologies such as collaborative robots and artificial intelligence etc. Productivity and efficiency are two key factors that determine the success level of manufacturing. Therefore, many manufacturers have become so eager to adopt adaptive, intuitive, collaborative and smart techniques to improve the production lines, including key manufacturing machines and equipment. Therefore, robotic systems are playing an increasingly vital role in many industrial sectors, as they decrease the need for human labour and increase automation level. In addition, material waste can be also reduced since robots provide stability and accuracy during work. In turn, production times are reduced as well. Consequently, smart manufacturing areas need more advanced, flexible, and smart robotic systems to respond to market size changes and customization processes. As a result, currently, great research efforts are made to enrich the interactions between humans and robots in the work environment. This paper presents an overview of Human-Robot Collaboration (HRC) systems being employed in smart manufacturing to exploit the benefits of human experience and the capabilities of robotic systems. The research gaps, challenges and future work directions on HRC are highlighted and analyzed towards smart manufacturing.