This paper addresses the problems involved in the control of Advanced manufacturing systems. An intelligent auction-based distributed decision-making system is developed for the control of activities at the factory and cell level within the advanced manufacturing system. It utilizes the hybrid control system, taking advantages offered by both hierarchical and heterarchical control structures. Such a system has proved to have greater fault tolerance of unforeseen events. Assignment of operations to various machines are not performed according to a prescribed schedule, rather decisions are made in real time as to what machine will process what task leading to the term real-time scheduling.