Laser diodes and diode laser bars are key components in high power semiconductor lasers and solid state laser systems. During manufacture, the assembly of the fast axis collimation (FAC) lens is a crucial step. The goal of our activities is to design an automated assembly system for high volume production. In this paper the results of an intermediate milestone will be reported: a demonstration system was designed, realized and tested to prove the feasibility of all of the system components and process features. The demonstration system consists of a high precision handling system, metrology for process feedback, a powerful digital image processing system and tooling for glue dispensing, UV curing and laser operation. The system components as well as their interaction with each other were tested in an experimental system in order to glean design knowledge for the fully automated assembly system. The adjustment of the FAC lens is performed by a series of predefined steps monitored by two cameras concurrently imaging the far field and the near field intensity distributions. Feedback from these cameras processed by a powerful and efficient image processing algorithm control a five axis precision motion system to optimize the fast axis collimation of the laser beam. Automated cementing of the FAC to the diode bar completes the process. The presentation will show the system concept, the algorithm of the adjustment as well as experimental results. A critical discussion of the results will close the talk.