The Cutting tools are an integral part of any manufacturing process, even in an advanced machining or drilling processes (aeronautics, automotive), or more traditional manufacturing sector (plastic, wood based manufacturing). In any case, the use of cutting tools is at the very core of achieving the functionalities of the product. NECO, as part of the TIVOLY GROUP, manufactures and commercialize precision cutting tools and thread rolling tools. NECO is an innovative company into the cutting-tool sector, it  wants to move from their current traditional business model into a product-service oriented business model.


NECO, as part of the TIVOLY GROUP, has delivered a diverse portfolio of tools and services around the world. Focusing on taps and industrial customers, NECO aims to achieve several objectives:

  • The main objective is to improve time to market, and therefore reduce the time between the first iteration with customers and their order; through collaborative Product-Service development among stakeholders for customers’ requirements collection, tool design, tool manufacturing and process development.

  • NECO aims to improve knowledge sharing across product design, manufacturing and product-service lifecycle through the capture of information about tool geometry, quality, tool status, wearout, use, etc. for future designs. This means not only the optimization of the design of the cutting tools offered, but also the enhancement of the manufacturing and provision processes according to the real needs of the customers.

  • The final objective is related to the improvement of the sustainability across the entire product- service lifecycle through zero defect manufacturing and extension of the cutting tool life time. Therefore, the trial is focused on the improvement of the efficiency (better quality) of the cutting tools using real manufacturing information.

As a result, new and better product-services will be offered addressing the customers’ needs, which will allow the provision of more competitive offers to the customers, such as threaded holes per tool at a minimum cost, and more innovative services such as daily control and provision of the stock.

The 5 PSYMBIOSYS tussles

On the way from traditional products towards Product-Service combinations various obstacles have to be overcome. Each of them goes along with significant risks and requires therefore thorough investigations which have to be done individually for each application context. Within PSYMBIOSYS 5 categories of such problem areas have been identified. They are called tussles (reflecting a kind of conflict situation) and will be briefly addressed in the following.


The scenario promotes the offering of a new and improved product-service offerings addressing customer needs, which is often a missing point currently in the industry. The cutting-tools Product-Service bundle is based on the collection of customers’ requirements in order to offer high quality and more competitive services, such as threaded holes per tool at a minimum cost. Additionally, the industrial trial aims to change from a traditional business model to an advances product-service approach with the implementation of advanced services such as zero complains, zero stock, and zero defect services.


The main objective of the NECO trial is the management and re-use of all the internal and external knowledge of the company, and therefore, the optimization of the knowledge related to the design-manufacturing processes. The integration of the different IT systems of NECO, together with an internal knowledge database, will be possible through an Industrial Data Space for knowledge sharing about the design-manufacturing-measurement-assembly-final use cycle. This allows the improvement of time-to-market and the quality of the cutting tools. Additionally, the integration of smart inspection systems optimizes the design-manufacturing processes through the enhancement of the quality control process.


The NECO industrial trial is also oriented to the real-digital tussle due to the digitalization of the whole product lifecycle, from the sales phase to the final usage process. First, the design process is completely digitalized with the enhancement of digital drawing. Afterwards, the trial improves the manufacturing and quality control processes through digitalization of the final cutting tool obtained. Thanks to the comparison of the real and digital cutting tools, NECO detects the errors and anomalies of the cutting tools.


The sentiments and needs of the customers are the key target to be achieved in the NECO industrial trial, through the management of the knowledge of the company, in order to provide more efficient and competitive products and services. Furthermore, the knowledge-sentiment tussle allows the semi-automatic transfer of customer needs to suitable and competitive offers provision.


Moving from a traditional to an innovative strategy allows advanced changes in the way of selling cutting tools, going from tools to functionalities (e.g. number of holes, quality of the thread, etc.). The optimisation and reorganisation of the different processes (sales, design, production, storage…) provides zero complains, zero stock and zero defect services, generating the Product-Service System.

Technical challenges


NECO, as an innovative company into the cutting-tool sector, wants to move from their current traditional business model into a product-service oriented business model. Therefore, the main challenge is the development of a manufacturing intelligence solution for cutting, composed by Hole Salesforce Service platform, Zero Stock Service platform, and Product Tool Smart Inspection Platform. In other word, zero complains, zero stock, and zero defect tools that generates the Product-Service System.

On one hand, the PSS aims to reduce the time between the first iteration with customers and their order. The challenge is to offer to the customer a complete solution in the first contact which highly reduces time-to-market. And therefore, the modelling and parametrization of the different manufacturing processes.

On the other hand, the PSS aims the optimization of the stock and delivery of tools according to the needs of the customers. The challenge is to synchronise our production and our stock level with the real consumption of the customer. Thanks to real-time data management, the daily control of the stock of the customers and the optimised management of the provision of the cutting tools is possible.

Finally, the PSS aims to improve the efficiency (better quality) of the cutting tools using manufacturing information. The challenge is to improve the design and manufacturing processes in order to increase the lifetime of the taps and the efficiency of the services. The solution is focused on the digitalisation of the cutting tools and the enhancement of the quality control process.

Who we are


NECO is a tool manufacturer ( which possesses an experience of over 75 years in the design, manufacturing and marketing of precision cutting tools and thread rolling tools. NECO is integrated into the structure of TIVOLY GROUP (, and currently, the plant of NECO in Elorrio has become the focal point of the group for the design and manufacturing of taps, providing solutions to all requirements of the group on such tools.

NECO’s most important products are taps, and cylindrical and flat forming dies. 50% of the NECO net sales (over 10 million €) take place in foreign markets, with a presence in over 40 countries worldwide.

NECO uses the European Excellence Model of the EFQM management model as reference. Based on the exercise of leadership and guided by a multi-year Strategic Plan, NECO is driven by the satisfaction of its customers, counting with the participation of all the people. The orientation towards the customer is reflected in its organization into divisions aimed at different markets to which they target their products and services. To provide greater responsiveness to changing market needs, the divisions are organized into multidisciplinary teams.

NECO has significant resources oriented to the innovation of its products and services. NECO conducts joint development projects with technology centres. The R&D Department, created in 1997, is primarily focused on the development of projects, plans and target search, definition, development and implementation of innovations and improvements on products, processes or services. The main activities carried out in this area are: development and definition of new products, definition of technical criteria, design high speed tools, participation in the development of coatings with superfine hard layers, cutting tests, strengthening partnerships with technology centres and research institutions, training of staff, technical advice to customers, other departments , etc.


Innovalia Association is an independent private Associated Research Lab, recognized as a R&D technology centre by the Spanish Register of Technology Centre based on their R&D services to companies. Innovalia, with more than 25 years of experience in technology-based product and service innovation with SMEs, assists SMEs in the development of ICT-based solutions in the areas of information security, software quality, M2M and mobile multimedia information services. Innovalia products and services address major telecom operators, broadcasters, transport infrastructure operators and manufacturing industries.  Innovalia has an international presence, with premises in Spain – Basque Country, Madrid, Catalonia, Canary Island; Europe; Asia, Central and South America. Innovalia Association is a Technology Agent of the Basque Country Innovation Network (Innobasque) and assembles skills, laboratories and resources from its four foundational companies. The Innovalia Association is organised into three different Units: Information & Communication Technologies (ICT) Unit, Nanotechnology and Advanced Metrological Unit, Manufacturing and Knowledge Management Unit.

Innovalia’s business activities broadly span the whole European market, the supply of RTD services, the networking of private and public companies with heavy emphasis on SMEs, SME collaboration activities and SME training. Among others, the activity sectors where the Innovalia Association focuses its activity include: Aeronautics and Space, Automotive, Electronics & Communications, SME Management, Industrial, Tourism and Entertainment, Metal-mechanics.

Innovalia Association is a Future Internet for Manufacturing and FIWARE Steering Board Member, and full member of the European Association for the Factory of the Future (EFFRA), the European Association of Big Data (DBVA) and the European Alliance of the Internet of Things (AIOTI), which reinforces the importance of these key technologies in the Industry 4.0 within the lines of action of the Innovalia Association. Furthermore, Innovalia participates in the key ETPs, PPPs such as NanoFUTURES, MANUFUTURE, EUSPEN, EMVA, Photonics XXI, NetWorld2020, WWRF, ECSEL, ARTEMISA, ITEA and CELTIC.