The paper deals with the intelligent functional model for optimizing the product design and its manufacturing process in hybrid manufacturing systems consisting of people, machines and computers. The knowledge‐based framework of an intelligent functional model has been developed. It furnishes the possibility for a product designer and manufacturer to find an optimal production plan in the early stage of the product design. The mathematical model formalization is provided. A consecutive optimization scheme has been applied for selecting an optimal alternative of a product design and its production plan. The proposed model is being implemented both in industry and university education process.