“The future lies in business models that remove complexity from the shop floor and tie costs directly to output, allowing engineers to focus on productivity rather than paperwork.” Johan Huss, Head of Digital Offerings at Sandvik Coromant
Imagine running a machining shop where tooling logistics, purchases and inventory headaches are no longer a problem — you just focus on making parts. For many manufacturers, administrative overheads tied to tool sourcing and management still drain time and profit. As Johan Huss, Head of Digital Offerings at Sandvik Coromant explains, the future lies in business models that remove complexity from the shop floor and tie costs directly to output, allowing engineers to focus on productivity rather than paperwork.
The India tooling market continues to grow strongly, driven by increasing automation and adoption of advanced manufacturing technologies across the automotive, aerospace and engineering sectors. In 2024, the precision tools market was valued at around US$ 1.4 billion and is projected to reach US$ 2.2 billion by 2030, while the machine tools market is expected to grow from US$ 1.7 billion in 2024 to over US$ 3.4 billion by 2033.
This growth reflects rising demand for efficient, reliable tooling solutions that support productivity, reduce waste and enable manufacturers to meet global standards. Cutting tools, a core segment of this demand, are expected to see continued expansion as companies increasingly prioritize automation, digital integration and outcome-based production models.
As the Indian tooling and machine tools markets grow, global providers like Sandvik Coromant are bringing outcome-based solutions locally, helping manufacturers adopt more efficient, predictable production models.
Manufacturers in India face logistical and supply chain costs that add to procurement complexity. A recent assessment from the Department for Promotion of Industry and Internal Trade estimated logistics costs at nearly 8% of GDP and over 9% of non-services output (which includes manufacturing) in 2023 24, underscoring the weight of these expenses on operational workflows.
From complexity to control
This is exactly where outcome-based models can make a measurable difference, especially for those working in busy machine shops.
Let’s begin by examining how a traditional tool procurement practice works. A batch of parts is scheduled, and the first step is to check tool availability. Now, imagine stock is low and an engineer or buyer in an Indian machine shop needs to raise a purchase order — often across multiple suppliers. Lead times then need to be tracked, deliveries monitored and invoices reconciled. In many cases, teams also hold excess “just in case” inventory that ties up capital and storage.
For a busy machine shop, this cycle repeats endlessly, consuming valuable production time that could be better spent improving processes or solving engineering challenges. This is where outcome-based models can turn that tooling strategy on its head. Instead of purchasing tools as consumables, manufacturers pay a fixed cost for every finished component.
The pay-per-use model is like buying groceries: the purchaser only pays for what they use. In this model, manufacturers pay for a service or product based on how much they use it, rather than a flat fee. So, if a machine shop uses more, it pays more; if it uses less, it pays less. It’s a flexible, cost-effective way of accessing services or products.
For example, at Sandvik Coromant, the Pay per Part service is designed to remove complexity from the machining process and provide customers with full transparency of their production costs. The journey begins with a close analysis of the customer’s situation, and the team takes time to understand business objectives and reviews the existing tooling strategy to identify areas for improvement.
This may reveal that too many tools are held in stock, or that valuable time is being lost searching for the right tool across the shop floor, for example. With these insights, experts at Sandvik Coromant can then design a tooling strategy tailored to the customer’s specific components and challenges. This involves selecting the most efficient tools, setting the right process parameters and integrating digital solutions for transparency and performance tracking.
Crucially, the outcome is a fixed cost per part, allowing the customer to enjoy total predictability and control. Instead of managing tool costs separately or worrying about unexpected downtime, every aspect of the machining process is covered in a single, reliable cost structure.
Performance made simple
The benefits of this model are clear. Costs become transparent and predictable, with no hidden expenses. Day-to-day operations are simplified, as there is less time spent managing tools and more time focusing on production. Process reliability improves, helping to reduce downtime and scrap, while measurable year-on-year savings are guaranteed through a commitment to continuous improvement.
Sustainability is also at the core of a pay-per-use model, as tool reconditioning, reduced packaging, smarter logistics and longer tool life all contribute to less waste and lower environmental impact.
The service is not static; continuous optimization is built into the model, with adjustments made over time to improve tool life, process stability and overall efficiency. By combining advanced tooling expertise with ongoing data-driven improvements, the Pay per Part model ensures that production is not only reliable, but increasingly effective as time goes on.
Through Pay per Part, Sandvik Coromant offers more than tools — it offers time, stability and a partner in performance. Manufacturers gain the confidence of knowing that every part produced carries guaranteed quality and a fixed cost, while the complexities of tooling, logistics and optimization are handled by an expert dedicated to keeping production running at its best.
Manufacturers today simply cannot afford to be weighed down by administrative tasks. Instead, they need a model that acknowledges their needs and offers value-driven support that works with their performance in mind. This starts with tool logistics and opting for a partner that can deliver predictable, transparent and easy-to-comprehend tooling support, which paves the way for more productive machining.
