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Author's profile photo Ulhas K

Basic Process Steps of Tool Management in Machine Shops

The purpose of this document is to explain the basics Process of Tooling Process in Machine shops.


In Manufacturing industry, Tool is very important role in Machining Operations  like cutting, facing, Milling, Drilling, etc. In a machine shop, machinists use machine tools and cutting tools to make Product.

Basic Process of Tool Management System in Machine Shops

         Tool Management Process divided in Four Category,

         1)    Tool requirement Planning

         2)    Tool Procurement

         3)    Tool Receipt & Issue

         4)    Tool Consumption       


Tool Requirement Planning

Tool Requirement Planning will be generated on the basis of number of tools used in operation wise and compare specific storage location stock as per schedule plan of Material. 

In Tool requirement commonly below parameters calculated like,

Tool/Operation: No. of Insert uses in Operations.

Component/Insert: Useful life of Insert(Tool).

Required Tool Qty.:  Schedule Qty. / Uses Values.

Tool Cost Rs/Pc: From Material Price.

Mc Rs/Pc: (Tool/Operation * Tool Cost Rs/Pc) / (Component/Insert).

Mc Rs/Month:  Mc Rs/Pc * Schedule Qty.


Tool Procurement Process

For Procurement process first Tools Drawing send to Suppliers & as per Supplier Quotation comparison to Procure the Tools by Purchase department. Requirement of new Tools define as per provided Production plan by planning dept. and from Tool Crib Store.

In this procurement process of Tool is purchase by normal way or either transfer Tools for Re-Sharping Process at vendor side for the purpose reuse.

For in SAP, Tool Re-Sharpening process carried out after Tool Consumption against cost center, The Tool qty.(Stock) is to be Manually Increases to Material Code for further RE-Sharpening process by concern Dept.

Tool Receipt & Issue :

Receipt Process: After approval of Purchase Department, Gate in =>GRN =>Quality check (Especially Costly Tools QA Check) process is done & then Tool is move to Store Department. If Tools is rejected during QA check, then proceed to purchase return. And OK Tools added to stock card.

Issue Process: when Tool crib department required Tools from store department then Tool crib person raised material requisition slip against store department ( i.e. Reservation slip) and at the time of new Material Issue, Old Material is collected by the user.

Tool Consumption :

Commonly Tool consumption process is done by the reason of Tool breakage or Tool life is Over.

when all Insert corners life gets over against one insert then Tool consumption process is proceeding.

If Old Tool is Break, Why-Why Analysis is performing & also breakage report is updated in Sheet.

At the end of the day daily tool consumption sheet is updated by Tool crib person.

When tool is break the balance life/Consume life is noted by Tool crib department.

Basic Re-Sharpening Process :

When Shop floor person submit Tools/Inserts to the Tool Crib Dept. after uses in machining then Tool crib person check the inserts/Tools Damage or not & as per inspection Tool crib. Dept. decide the Tool is Scrap or go for Re-sharpening.

Process Flow :


Above are the basic Process flow of Tool Management in Machine shops

 Pain Areas for Mapping Tool Management ( system vs Physical) :

Below is the identified Issues against system as well as physical Process,

  1. No tracking of Tool/Inserts corner life in system because of absence of serial number on the corner of Tool/inserts.
  2. No inventory tracking due to absence of serial Number on the corner of Tools/inserts.
  3. In System, Serial number wise tools assignment not possible in Routing Operations.
  4. During Material Production many time tool changes, due to that actual uses tools not updated in Routing Operations.
  5. In System, Tools will not have any direct consumption in production.
  6. If we assign this Tools as the components in BOM then system will consume the stock. Then stock not available in system for transfer to Re-Sharpening process or either again uses this Tools for In-house production.
  7. System only track how many finish goods produced with tool ‘A’ but not track tool life against Inserts Corners.

Required Mapping in System :

  1. Calculate Balance Tool Life
  2. Tool Inventory tracking
  3. Tool Consumption Qty./Tool Consumption Cost
  4. Calculate Consume Tool Life
  5. Tool Re-Sharpening & its Life of Re-Sharp Tool.


Summary :

Regarding Tooling process  the Tool Mgmt. Process is very critical  to mapped in system because of various scenarios run against Tool mgmt. like Consume Tool Life,Total Tool life,Tool Cost,Tool tracking ,Tool requirement,Tool Resharpening & its increase life of Re-sharp Tool.

So need to mapped this required Tooling processes in one platform for customer satisfaction.

Dear All,

Suggest any additional information about that OR If you have any other process or method apart from this then let me know.




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      Author's profile photo Sharat Sugur
      Sharat Sugur

      Hi Ulhas,

      Nice blog with business process steps on machine shop Tool Management Process. Do you have any further plans on mapping these processes in SAP? Good information, thank you.