1. A method of drilling a formation, comprising: acquiring real-time drilling data; acquiring a bit wear equation; determining a real-time bit wear prediction by using the real-time drilling data to predict a bit efficiency factor and to detect changes in the bit efficiency factor over time; determining a real-time lithology prediction by processing the real-time drilling data through a multilayer neural network; and adjusting the drilling parameters for the drilling operation in real-time based on the real-time bit wear prediction and the real-time lithology prediction.