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Component-based software development (CBSD) is based on the idea of developing software systems by selecting appropriate off-the-shelf components and integrating them under a specified architecture. Such an approach prevents a software developer from having to reinvent the wheel, reduces software development cost and time, and promotes flexibility and maintainability. In this paper, we describe the application of CBSD in developing a system for automated inter-library loans between the libraries of two major universities of Singapore. Currently, inter-library loan (ILL) is a cumbersome and manual process. Our system helps promote resource-sharing and interoperability and reduces the difficulties involved in the current manual loan system between libraries. Specifically, we describe the CBSD approach, present the design and implementation of the MILLS (managing inter-library loan services) system, and describe how MILLS was developed taking the CBSD approach into consideration. The lessons learnt from this case should be of value to software developers.