Recent advances in information technologies and artificial intelligence are enabling the creation of intelligent and highly reconfigurable factories which will lead to unprecedented production development. The notion of Cyber-Physical Production System (CPPS), denoting a system where mechatronic components are coupled to a smart logical entity that enables these factory units to interact in an adaptive way, has been presented as one of the cornerstones of what is perceived to be the 4^th Industrial Revolution. However, more than two decades of research have shown that such a vision is not as new as recent programmes suggest and that certain developments are only now reaching a maturity stage that renders them usable with limitations. These are due to a set of persistent design challenges that undermine their acceptance along with the fact that the preconditions for operating such systems globally are far from being satisfied. This paper provides an integrated, clear and critical view on pending design issues that still need to be satisfied. In this context, the paper concentrates on the conceptual and technical design barriers that relate to the development of cyber-physical production components and their operation in the context of a CPPS.