Rapidly developed information technologies (IT) have continuously empowered manufacturing systems and accelerated the evolution of manufacturing system paradigms, and smart manufacturing (SM) has become one of the most promising paradigms. The study of SM has attracted a great deal of attention for researchers in academia and practitioners in industry. However, an obvious fact is that people with different backgrounds have different expectations for SM, and this has led to high diversity, ambiguity, and inconsistency in terms of definitions, reference models, performance matrices, and system design methodologies. It has been found that the state of the art SM research is limited in two aspects: (1) the highly diversified understandings of SM may lead to overlapped, missed, and non-systematic research efforts in advancing the theory and methodologies in the field of SM; (2) few works have been found that focus on the development of generic design methodologies for smart manufacturing systems from the practice perspective. The novelty of this paper consists of two main aspects which are reported in two parts respectively. In the first part, a simplified definition of SM is proposed to unify the existing diversified expectations, and a newly developed concept named digital triad (DT-II) is adopted to define a reference model for SM. The common features of smart manufacturing systems in various applications are identified as functional requirements (FRs) in systems design. To model a system that is capable of reconfiguring itself to adapt to changes, the concept of IoDTT is proposed as a reference model for smart manufacturing systems. In the second part, these two concepts are used to formulate a system design problem, and a generic methodology, based on axiomatic design theory (ADT), is proposed for the design of smart manufacturing systems.