By the nature of your question, I am assuming you have never worked with a PLC nor have you designed a controls project before. The following answer is based on this assumption. Please accept my sincere apologies if I this offends in any way.
In order to start a design like you describe - replacing an entire control system with a new one - initially it is of little importance what the new control system is or how it works. What is important is how the machine needs to work. This means that you must first understand what the machine does, how it needs to go about doing it, and what makes those things happen.
For example, think about an electric can opener.
First we need to understand what it does: In this simple example, a can is manually inserted into the machine. When the cutting blade is lowered into the can, the can is also wedged between a fixed wheel and a motorized wheel. When the blade arm is detected by the machine in its fully lowered position, the motorized begins to spin causing the can to rotate under the blade. When the blade arm is manually raised, this is also detected and motor stops.
Now that we know how what it does, how does it need to go about doing it? In this example we really only have one "how to": the power to the motor needs to be OFF when the blade is raised and ON when the blade is lowered.
And finally, what makes those things happen? In this case, there are only two electrical devices - a motor and a normally open switch. If a PLC were involved in this, we would think of the motor as and OUTPUT device and the switch as an INPUT device. INPUTS are anything that is monitored or looked at and then used for decision making - things like switches, pushbuttons, feedback signals, etc. OUTPUTS are anything that is controlled or manipulated like motors, lights, solenoids, etc.
Now how does this apply to your problem. Well, first you need to understand your cigarette making machine and how it needs to work; what happens, each and every step. Next you need to understand how it happens; something goes in, it is detected, something else happens, and so on. And once you know all that, you then identify all your INPUTS and OUTPUTS.
Once you have done all this, you will then be ready to start figuring out the PLC itself. The answers to many of your questions will become apparent after all this is done. Until then, though, there is really little point in worrying about it or how it functions.
Hope this helps. I can assure you that this is the kind of process that machine builders actually go through.
Steve
