This paper describes an integrated approach for a cognitive machine shop. A review of existing approaches in the area of production sciences is given and shortcomings and chal-lenges that need to be dealt with are outlined. Following, a con-cept that combines necessary research areas for realizing a Cognitive Machine Shop is introduced. The main achievement of the proposed concept is the realization of the cognitive-perception-action loop (CPAL) for the Cognitive Machine Shop in a hybrid manner. The CPAL comprises the decomposition into local and global planning and control entities as well as the equipment of the factory’s resources and products with innova-tive sensor technologies in order to achieve a flexible and reli-able production.