The continuous development of production processes is currently observed in the fourth industrial revolution, where the key place is the digital transformation of production is known as Industry 4.0. The main technologies in the context of Industry 4.0 consist Cyber-Physical Systems (CPS) and Internet of Things (IoT), which create the capabilities needed for smart factories. Implementation of CPS solutions result in new possibilities creation – mainly in areas such as remote diagnosis, remote services, remote control, condition monitoring, etc. In this paper, authors indicated the importance of Cyber-Physical Systems in the process of the Industry 4.0 and the Smart Manufacturing development. Firstly, the basic information about Cyber-Physical Production Systems were outlined. Then, the alternative definitions and different authors view of the problem were discussed. Secondly, the conceptual model of Cybernetic Physical Production System was presented. Moreover, the case study of proposed solution implementation in the real manufacturing process was presented. The key stage of the verification concerned the obtained data analysis and results discussion.