Manufacturing companies in high-wage countries are facing rising challenges in a global market. Increasing customer demands for a higher degree of individualization result in smaller lot sizes and higher variety of products. In addition, competitors from low-wage countries in Asia and Eastern Europe have significantly improved their technical capabilities, resulting in a more competitive environment. The tool making industry provides its customers with the means to achieve excellence in production due to its unique position in the value chain between product development and the serial production of parts. A tool making company’s ability to improve the efficiency of serial production and develop innovative product design is strongly dependent on its capability of integrating itself into the preceding and following customer processes. Over the last years, customer demands for global sourcing of tools have changed from low prices to the demands of extended tool operating life and high operational availability. European tool making companies have learned to take this development as a chance to differentiate themselves from global competitors and subsequently increase their range of services up- and downstream the value chain. As a result, new industrial product-service-systems (IPS²) for the European tool making industry need to be developed that address the demand of a higher degree of integration into the preceding and following customer processes. Within the German Government founded research project “Smart Tools”, an industrial product-service-system (IPS²) for the tool making industry has been developed based on a modular service-oriented cyber-physical system. Core element of the cyber-physical system is the smart tool – an injection molding tool equipped with state-of-the-art sensor technology to capture data on the condition of the tool during its operational use. Its intelligence derives from the condition based interpretation and data management of the collected process data which is also the basis for the design of customer specific services. Besides the successful integration of force and position sensors into the tool, experimental research has delivered important results on the application of solid borne sound sensors for online early detection of tool wear. An innovative concept for the distribution and interpretation of the process data incorporates the specific requirements of the customers. To cope with the demands of individual and small series production in the tool making industry, a modular sensor kit has been developed together with a diagnostic unit for data interpretation and storage of data in an electronic tool book. The developed modular service-oriented cyber-physical system delivers the means to extended tool operating life and improves the overall efficiency of serial production. Based on the results new business models can be developed for tool making companies to differentiate themselves from global competitors and overcome the challenges of production in high-wage countries.
