To quickly respond to the diverse product demands, mixed-model assembly lines are well adopted in discrete manufacturing industries. Besides the complexity in material distribution, mixed-model assembly involves a variety of components, different process plans and fast production changes, which greatly increase the difficulty for agile production management. Aiming at breaking through the bottlenecks in existing production management, a novel RFID-enabled manufacturing execution system (MES), which is featured with real-time and wireless information interaction capability, is proposed to identify various manufacturing objects including WIPs, tools, and operators, etc., and to trace their movements throughout the production processes. However, being subject to the constraints in terms of safety stock, machine assignment, setup, and scheduling requirements, the optimization of RFID-enabled MES model for production planning and scheduling issues is a NP-hard problem. A new heuristical generalized Lagrangian decomposition approach has been proposed for model optimization, which decomposes the model into three subproblems: computation of optimal configuration of RFID senor networks, optimization of production planning subjected to machine setup cost and safety stock constraints, and optimization of scheduling for minimized overtime. RFID signal processing methods that could solve unreliable, redundant, and missing tag events are also described in detail. The model validity is discussed through algorithm analysis and verified through numerical simulation. The proposed design scheme has important reference value for the applications of RFID in multiple manufacturing fields, and also lays a vital research foundation to leverage digital and networked manufacturing system towards intelligence.