The main focus of this work is simulation-driven product development methodology for MSc students’ education. The educational process is built around real product development process; small Unmanned Aerial Vehicle is used as a case-study. The bunch of simulation and optimization tools (NX CAD, Simcenter 3D, LMS System Synthesis, LMS Amesim, ANSYS, STAR-CCM) is used in the educational process for creating so-called “digital twin” of a real product and to achieve the continuity and transparency of the development process. Product Lifecycle Management (PLM) system is used to manage requirements, changes and integrate all simulation results. The global trend in engineering education is in the transition from the training of narrowly specialized engineers for high-tech industries. In the new reality, the industry needs specialists with broad knowledge and system thinking, which are able to solve problems that require cross-disciplinary expertise. These specialists should be able to use the most advanced methods and tools of numerical simulation, optimization, product lifecycle management, configuration management, advanced manufacturing techniques. The aim is to enhance the classical methodology for systems engineering with a digital environment in order to develop an MSc level courses teaching latest practices for innovative product design based on real case problems. A modeling of the system to be developed enables the comprehensive analysis and its quantitative assessment. Such approach demonstrates both a thorough investigation of a problem and quantitative estimation of the system’s efficiency.