Thanks very much for getting back to me... unfortunately my boss doesn't want me to share the whole schematic
I'm still keen to learn what I can though.
The relay coil is activated by a 5v circuit from your generic miniature pc device I/O (400ma) It's switching the 12v circuit via the relays.
The original power supply was absolutely awful... it looked like a big ripple on the scope.
Our device +12v is not decoupled or filtered at all... its the dips in the 12v that I think are resetting it...
When you say filter caps did you mean an electrolytic, poly box cap, or usually ceramic type decoupling caps? Or what sort of inductor. I know it's a bit of an ask but if I can improve it at all it's going to go down well. Thanks.