This study describes the development of a distributed planning and control strategy for guiding multiple mobile robots in a leader-follower formation framework, which combines together formation planning, navigation and active obstacle avoidance in industrial manufacturing environments. A layered formation control architecture consisting of functional behaviors based on the relative motion states of the robots, classified into two levels is developed. The supervisor level in the framework handles the higher-level missions such as formation and inter-robot communication and the lower level deals with the dynamic control of robots during navigation. Dynamic role switching mechanism through the exchange of leadership is incorporated in this work to tackle the problem of obstacle avoidance in the follower path. The proposed approach is validated through state based laboratory experiments using commercially available robot research platforms and the results obtained are discussed. © 2011 Asian Network for Scientific Information.