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The benefits of applying artificial intelligence techniques are illustrated in this paper by considering an industrial assembly problem. The underlying knowledge base encapsulates experience from the shopfloor as well as academic expertise and improves the productivity of an assembly cell by allowing for recovery actions with very little operator assistance. This can be achieved by providing a general framework for the determination of a successful assembly within a sensor-rich environment together with `intelligentÂ¿ sensor signal processing. Thus the increase in flexibility minimises changeover times between different batches, allowing for smaller batch sizes.