A real-time algorithm is developed for scheduling single-part-type production lines with work-in-process inventory buffers. We consider three classes of activities: operations, failures and repairs, and starvation and blockage. The scheduling objectives are to keep the actual production close to the demand, the work-in-process (WIP) inventory level low, and the cycle time short. A three-level hierardhical controller is constructed to regulate the production. At the top level, we determine the desirable buffer sizes and the target production level for each operation. At the middle level is a production flow rate controller that recalculates the production rates whenever a machine fails or is starved or blocked. The loading times for individual parts are determined at the bottom level of the hierarchy. The production scheduling algorithm is evaluated by using computer simulations for a variety of cases. Compared with a transfer line policy, a significant improvement in system performance is observed.