When developing a new manufacturing system or reconfiguring an existing system, it is desirable to have a simulation model for test and evaluation. However, there is often a disconnect between the real system and the simulation model; it is difficult for them to have exactly equivalent behavior. The highest-fidelity “model” is always the system itself. In this paper we propose a framework in which modular models of the manufacturing system components (robots, machines, conveyors, controllers) can be interchanged with their real counterparts, forming a hybrid process. We focus on both the connections between components and the most pertinent aspects of the processed parts. The transfer of parts between the real and virtual domains is particularly challenging; we describe how parts can transition between real and virtual without making substantial changes to the system itself. We discuss how the proposed hybrid process simulation can be used for the design of new manufacturing systems. As the new machines and components are built and installed, they can be “swapped” in for the virtual machines, and testing can be done incrementally. We also discuss how the proposed hybrid process simulation can be used for the upgrade or reconfiguration of existing manufacturing systems. When a new machine or cell is added, or the part flow is reconfigured, the relevant new parts of the system can first be built in simulation and tested as part of the hybrid process, with the new machines. A case study describing the implementation of the hybrid process simulation on the Reconfigurable Factory Testbed at the University of Michigan is presented.