The main drivers for the development and evolution of Cyber Physical Systems (CPS) are the reduction of development costs and time along with the enhancement of the designed products. The aim of this survey paper is to provide an overview of different types of system and the associated transition process from mechatronics to CPS and cloud-based (IoT) systems. It will further consider the requirement that methodologies for CPS-design should be part of a multi-disciplinary development process within which designers should focus not only on the separate physical and computational components, but also on their integration and interaction. Challenges related to CPS-design are therefore considered in the paper from the perspectives of the physical processes, computation and integration respectively. Illustrative case studies are selected from different system levels starting with the description of the overlaying concept of Cyber Physical Production Systems (CPPSs). The analysis and evaluation of the specific properties of a sub-system using a condition monitoring system, important for the maintenance purposes, is then given for a wind turbine.