PRESENTED IS A REPORT FOR THE DEVELOPMENT OF AN AUTOMATED ASSEMBLY SYSTEM FOR THE ASSEMBLY OF DIAL INDICATOR GEAR BOXES WHICH ARE CURRENTLY BEING ASSEMBLED MANUALLY. THE ASSEMBLY SYSTEM CONSISTS OF ROBOT INTEGRATED WITH A PLC CONTROLLED PALLET TRANSPORT SYSTEM. COMMUNICATION IS THROUGH BINARY INPUT/OUTPUT SIGNALS. THE ASSEMBLY TASKS PRESENTED THE REQUIREMENTS OF GRIPPING THE HAIRSPRING AND GEAR ASSEMBLY, THE ORIENTATION OF THE HAIRSPRING AND GEAR ASSEMBLY, AND MESHING OF THE FINE TOOTH GEARS WITHOUT DAMAGING THE TEETH. ALL THESE REQUIREMENTS WERE OVERCOME WITH EMPHASIS ON USING LOW-COST AUTOMATION TECHNIQUES.