This paper introduces a formal modeling approach for compositional specification of both functionality and timing of manufacturing systems. Functionality aspects can be considered orthogonally to timing aspects. The functional aspects are specified using two abstraction levels; high-level activities and lower level actions. Design of a functionally correct controller is possible by looking only at the activity level, abstracting from the different execution orders of actions and their timing. As a result, controller design can be performed on a much smaller state space compared to an explicit model where timing and actions are present. The performance of the controller can be analyzed and optimized by taking into account the timing characteristics. Since formal semantics are given in terms of a (max,+) state space, various existing performance analysis techniques can be used. We illustrate the approach, including performance analysis, on an example manufacturing system.