As the industrial requirements change at a rapid pace due to the drastic evolution of technology, the necessity of quickly investigating potential system alternatives towards a more efficient manufacturing system design arises more intensely than ever. Manufacturing systems simulation has proven to be a powerful tool for designing and evaluating a manufacturing system due to its low cost, quick analysis, low risk and meaningful insight that it may provide, improving thus the understanding of the influence of each component. Simulation comprises an indispensable set of IT tools and methods for the successful implementation of digital manufacturing. It allows experimentation and validation of product, process, and system design and configuration. This paper investigates the major historical milestones in the evolution of manufacturing systems simulation technologies and examines recent industrial and research approaches in key fields of manufacturing. It describes how the urge towards digitalisation of manufacturing in the context of the 4th Industrial revolution has shaped simulation in the design and operation of manufacturing systems and reviews the new approaches that have arisen in the literature. Particular focus is given to technologies in the digitalised factories of the future that are gaining ground in industrial applications simulation, offering multiple advantages.