The rise of Industry 4.0, which employs emerging powerful and intelligent technologies and represents the digital transformation of manufacturing, has a significant impact on society, industry, and other production sectors. The industrial scene is witnessing ever-increasing pressure to improve its agility and versatility to accommodate the highly modularized, customized, and dynamic demands of production. One of the key concepts within Industry 4.0 is the smart factory, which represents a manufacturing/production system with interconnected processes and operations via cyber-physical systems, the Internet of Things, and state-of-the-art digital technologies. This paper outlines the design of a smart cyber-physical system that complies with the innovative smart factory framework for Industry 4.0 and implements the core industrial, computing, information, and communication technologies of the smart factory. It discusses how to combine the key components (pillars) of a smart factory to create an intelligent manufacturing system. As a demonstration of a simplified smart factory model, a smart manufacturing case study with a drilling process is implemented, and the feasibility of the proposed method is demonstrated and verified with experiments.