Picture this: You’re producing components in repeated batches. But instead of managing tool sourcing, logistics and performance issues, you focus solely on delivery. No worries about restocking, no concerns over quality and no last minute panic that you’ve ran out of tools to complete the job.
Manufacturers today cannot afford to be weighed down with administration that hinders productivity. As Johan Huss, vice president digital products and services at Sandvik Coromant explains, the future lies in business models that remove complexity from the shop floor and tie costs directly to output.
He says 44% of engineers are spending at least six hours per week on procurement, according to the latest State of Manufacturing report by Fictiv. The report revealed that 19% of the engineers surveyed spend over eight hours per week, an entire working day, on procurement tasks in 2025. This is up from 13% in 2024, highlighting the growing burden on engineering teams tasked with handling an increasingly complex supply chain.
“And it’s not just the time spent ordering new tools. Sandvik Coromant’s own research finds that while tooling accounts for only 3–5% of total production costs, mismanaging it impacts many other areas, from operator downtime to scrap and emergency purchases. In fact, as much as 20% of an operator’s time can be lost simply searching for the right tool, a striking example of how small inefficiencies quickly add up.
“These findings also demonstrate a clear need: manufacturers need more efficient service and technology-driven sourcing solutions that streamline workflows and allow teams to focus on higher-value tasks.”
Huss says 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 so the first step is to check tool availability. Now, imagine stock is low and an engineer or buyer needs to raise a purchase order – perhaps across several 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 extra storage.”
Huss adds that 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 compontent.”
The pay-per-use model, he explains, 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.
“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.”
Huss says that 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 parametres 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.
“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 optimisation is built into the model, with adjustments made over time to improve tool life, process stability and overaENDS)ll 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, Huss says – 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 optimisation 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-comphrend tooling support, which paves the way for more productive machining.”