The ever-increasing emphasis on product quality with increased productivity has been driving the automotive manufacturing industry to find new ways to produce high quality products without increasing production time and manufacturing costs. In addition, automotive manufacturing plants are implementing flexible manufacturing strategies with computer numerical control (CNC) machining centers to address excess capacity, shifting consumer trends and future volume uncertainty of products. Over time, plants have used several preventative and predictive maintenance methods to address machine reliability. Such systems include, but are not limited to, scheduling machine down times at regular intervals to check/replace bearings and other spindle/slide components before they can have an adverse affect on part quality. However, most of these methods and traditional systems are not cost effective and cause significant machine down-times, safety concerns and labor overheads and do not reliably monitor other process issues, such as, clamping, incoming stock variations and thermal phenomena. This paper describes an advanced real-time vibration based machine health and process monitoring system that has been developed to address the above issues. The system, called Condition Indicator Analysis Box for CNC (CIAB-CNC), is easily configurable, and provides real-time data and historical trends of machines, processes and tooling, enabling manufacturing plants to make accurate predictions regarding future production runs. The system also aids in the optimization of preventative maintenance tasks in a cost effective manner. The developed system monitors machine spindle and slide for unbalance, misalignment, damaged/spalled bearings, mechanical looseness, and ball screw issues. Additionally, it performs in-process monitoring during machining as well as non-machining by individual tool and/or feature to detect tool breakages, quality issues and other gross process or machine anomalies. Innovative statistical trending algorithms enable the system to automatically adapt to valid process/parameter changes and significantly reduce the chances of false alarms and warnings. The developed system provides manufacturing plants with a tool to analyze machine tools and their associated components in an effort to gather information they can use effectively to make decisions regarding flexible machines, processes and tooling.