Keeping track of tools is essential for smooth running of any production un
it. Being one of the critical resources for production, non-availability of
tools can affect productivity of any manufacturing shop floor seriously. I
n this paper, a novel tool-tracking system, which can be used to monitor th
e movements of tools in a shop floor to prevent tool loss and tool hoarding
, is described. The system uses miniature transmitters embedded in the tool
s together with a number of receiver stations located strategically around
the shop floor. Each tool intermittently transmits a coded signal so that i
t may be identified as well as located. Simulation studies show that the sy
stem is effective particularly in situations where the productivity would h
ave been low because of high tool losses.