Inventory: An Unseen Opportunity for Cutting Tool Cost Saving

Gardner Research (part of the same company that publishes Modern Machine Shop) recently conducted a study among machining facilities related to their use and purchase of cutting tools. The study was performed for another company, so not all of the findings can be shared, but two sets of findings that can be shared—and that say something significant when brought together—are presented on the two graphs above.

Figure 1 illustrates the relative importance of shops’ various expectations of cutting tool suppliers. Cost reduction is number-two in priority on this list. Arguably, though, priority number one—free sample tools—is part of cost reduction as well, because this first priority speaks to reducing the cost of testing new tooling.

Meanwhile, Figure 2 shows the adoption of various tool-related technologies and management techniques. Among small shops, two closely related ones—automatic restocking and shop floor vending systems—score lowest in adoption.

What do these two findings together suggest? One possibility is this: Small shops eager to save cost on their cutting tools are insufficiently aware of the extent to which inventory management is a factor in that cost. Cutting tools are a high-variety product ordered frequently—suggesting that finding a means to streamline and simplify the ordering and managing of this product stands to deliver significant value.

It even seems that larger facilities come to recognize this very point. Automatic restocking and shop floor vending both increase as plant size increases.

Here are articles detailing solutions various shops have found for managing their cutting tools:

• Inventory Storage, Distribution and Control Systems Boost Lean Manufacturing Efforts
• Tool Vending Systems: Value Beyond Cost Control
• Tool Management Drives Process Standardization
• Tool Management System Cuts Scrap
• Tooling Management Saves Aerospace Manufacturer $1.5 Million