Adaptive multiscale prognostics and health management (AM-PHM) is a methodology designed to support PHM in smart manufacturing systems. As a rule, PHM information is not used in high-level decision-making in manufacturing systems. AM-PHM leverages and integrates component-level PHM information with hierarchical relationships across the component, machine, work cell, and production line levels in a manufacturing system. The AM-PHM methodology enables the creation of actionable prognostic and diagnostic intelligence up and down the manufacturing process hierarchy. Decisions are made with the knowledge of the current and projected health state of the system at decision points along the nodes of the hierarchical structure. A description of the AM-PHM methodology with a simulated canonical robotic assembly process is presented.