Cutting Tool and Machine Tool Accessory Manufacturing (U.S.) — NAICS 333515

1. Overview

Almost everything made of metal is shaped at some point by a cutting tool — the hardened drill, insert, end mill, tap, or reamer that a machine grips and drives into a workpiece to remove material. This industry (NAICS code 333515) makes those consumable cutting tools plus the machine tool accessories that hold them and hold the part being cut: toolholders, chucks, collets, and workholding fixtures.[1] These are the "teeth and grip" of a metalworking factory — small, high-precision, hard-wearing parts sold into aerospace, automotive, energy, defense, and general machine shops.

Why an investor should care: cutting tools are consumables. They wear out and get replaced whether or not a factory buys new machines, so demand tracks how hard existing machines are running (spindle hours and capacity utilization) more than the capital-spending cycle. That makes the industry a recognized leading indicator of U.S. manufacturing health.[2] It is also a genuine dual-market opportunity: a handful of names are publicly traded, but the bulk of the U.S. supply base is privately held — family shops, private-equity-owned platforms, and the U.S. arms of foreign giants.

Ways in (detailed in sections 4 and 10): on the public side, one U.S. pure-play (Kennametal) plus diversified foreign industrials (Sandvik, Kyocera, and Japanese-listed toolmakers), and Berkshire Hathaway as an indirect route through its wholly owned ISCAR/IMC unit. On the private side, PE-backed and family-owned tool and workholding makers.

2. What it is and how it's structured

In scope (NAICS 333515): accessories and attachments for metal-cutting and metal-forming machine tools — counterbores, toolholders, taps and dies, thread-cutting dies, files, chucks, reamers, countersinks, metalworking drill bits, indexable carbide inserts, end mills, hobs, broaches, machine knives, arbors, mandrels, clamps, rotary tables, machine-tool measuring attachments, and workholding devices such as collets and fixtures.[1][3]

What it excludes (important, because the names sound similar):

• The machines themselves — lathes, mills, grinders, and presses — are NAICS 333517, Machine Tool Manufacturing. 333515 makes the parts that go into and onto those machines, not the machines.[4]
• Custom dies, jigs, and fixtures belong in NAICS 333514.[3]
• Saw blades and hand edge tools (handsaws, and blades/accessories for non-metalworking machines) are NAICS 332216, Saw Blade and Handtool Manufacturing.[4]
• Power-driven handtools (portable drills, etc.) fall under other codes; consumer/DIY drill bits are a different market from industrial metalworking tooling.

Product split. Two economically distinct halves live under one code:

• Cutting tools (the consumable half): drills, inserts, end mills, taps, reamers. Recurring, wear-driven demand. Tungsten-carbide tools are roughly half of the global cutting-tool market and high-speed steel (HSS) about a quarter, with the remainder ceramics, diamond (PCD), and cubic boron nitride.[5]
• Machine tool accessories (the durable half): toolholders, chucks, collets, and workholding. These are more capital-goods-like — bought with new machines or new production lines, so demand is lumpier and more tied to factory expansion.

Manufacturing process. Carbide-tool production is a specialized powder-metallurgy process. Tungsten and carbon are reacted to make tungsten carbide; carbide powder is blended with cobalt binder, compacted into a "green" shape, sintered at approximately 2,500°F–2,800°F (with roughly 20% linear shrinkage and 50% volume shrinkage), finish-ground, and often coated by physical- or chemical-vapor deposition. Steel bodies and toolholders are machined separately, after which inserts may be brazed or mechanically clamped into place.[6] This technical complexity in powder formulation, furnace control, and dimensional know-how creates meaningful barriers to entry.

Commercial model. The industry combines catalog products with engineered applications. Standard drills, inserts, and end mills are distributed through industrial distributors or digital channels with short order cycles; backlog for standard orders is generally not significant. Custom geometries, coatings, and cutting parameters are developed with end users for particular alloys, machines, and production rates. Application engineers therefore function as part of the sales force.[7]

Ownership mix. Federal data count 1,050 firms operating 1,060 establishments — so almost every firm runs a single plant.[8][9] Averaging federal figures, the typical establishment employs about 23 people (23,991 employees ÷ 1,060 establishments) and the average firm books roughly $5 million in annual receipts ($5.55 billion ÷ 1,050 firms).[8][9] The population is dominated by small-to-mid job shops and specialists, with a thin top layer of large, often foreign-owned or PE-owned platforms.

3. How big it is

U.S. federal statistics for NAICS 333515:

So this is a small, high-skill manufacturing industry: about 24,000 workers and roughly $5.5 billion in domestic production shipments.[8][9] Average pay near $68,000 reflects skilled toolmaking and machining labor, well above the manufacturing average for low-skill assembly.

Activity gauges. The AMT/USCTI Cutting Tool Market Report recorded $2.56 billion of U.S. cutting-tool shipments in 2025, up 2.5% from 2024.[2] This series is a useful directional demand gauge based on participating cutting-tool suppliers; it does not fully capture machine-tool accessories and includes some remanufacturers and coating providers beyond core NAICS 333515.

Two undercount caveats — but in the opposite direction from most industries. Federal business statistics here are reasonably complete (this is not an industry hidden inside government or sole proprietors), but the domestic-production figure understates the economic footprint of cutting tools used in U.S. manufacturing for two reasons:

1. Imports. A large share of tools consumed in U.S. factories is imported or made by the U.S. subsidiaries of foreign majors. Broader consumption-based market studies put the "U.S. cutting tools market" around $15 billion in 2024 — roughly three times the $5.5 billion of domestic shipments — because they count imported tools and a wider product basket.[11][9] Treat the ~$15 billion figure as third-party consumption estimate, not federal data.
2. Captive tool rooms. Some cutting-tool and fixture production happens inside larger integrated manufacturers (aerospace, auto) that are classified in their end-industry, not in 333515, so it never shows up under this code.

4. The investable universe

There is no large U.S.-listed pure-play in cutting tools. The closest is Kennametal; most global capacity sits inside diversified foreign industrials or private/PE hands.

Public companies (relevant listings):

Note that for the diversified names (Kyocera, Mitsubishi Materials, Sumitomo Electric, Sandvik), cutting tools are only a slice of the company, so a share purchase buys broad industrial exposure, not a bet on tooling alone. Segment margins vary widely depending on product mix, scale, and factory loading — from mid-single digits at some operations to approximately 20% at integrated leaders — so "industry margin" is not one stable number.

Major private and other owners:

• IMC Group / ISCAR (brands ISCAR, Tungaloy, Ingersoll, TaeguTec) — Israel-based; wholly owned by Berkshire Hathaway since 2013 after an initial 80% stake in 2006. Approximately $4.1 billion of global revenue in 2025, with inserts accounting for a major portion of sales and earnings; 2025 growth reflected pricing, acquisitions, and mix, while pre-tax earnings were essentially flat due to raw-material costs and higher selling expense.[16][17]
• Harvey Performance Company — owned by Berkshire Partners since 2021; manufactures specialized precision-cutting tools under multiple brands. Acquired ATA in 2024, adding more than 25,000 products, nearly 500 employees, seven manufacturing facilities, and customers in 90 countries.[18][19]
• Hardinge / Forkardt Hardinge — collets, chucks, workholding, and machine tool accessories; taken private by Privet Fund Management in 2018 (~$245M).[20]
• Ceratizit (Plansee Group, Austria) — private carbide-tool major.
• U.S. private/family firms — Jergens (workholding), Allied Machine & Engineering, M.A. Ford, Greenleaf, ARCH Cutting Tools, Techniks Industries, plus hundreds of small toolmakers and regrind/recoat shops.
• Distributors as "picks-and-shovels" public proxies: MSC Industrial Direct (NYSE: MSM) distributes cutting tools, abrasives, machining fluids, and accessories without manufacturing them, participating in consumption and channel economics without carbide-production exposure.[21] W.W. Grainger (NYSE: GWW) similarly sells cutting tools and accessories.

5. How the money works

Owners in this industry make money on three economic engines:

1. The razor-and-blades consumable cycle (the profit core). Cutting tools wear out. A carbide drill or insert has a finite tool life measured in cut minutes; when it dulls it is replaced (or, for larger tools, reground and recoated). So the revenue base is recurring and tied to how many machine-spindle-hours U.S. factories are running — i.e., capacity utilization, not machine purchases. Higher performance (longer tool life, faster cutting, tighter tolerance) commands price premiums, which is why the majors spend heavily on coatings and geometries (PVD/CVD coatings such as TiN and TiAlN). The economic proposition is usually cost per finished part, machine uptime, and scrap avoidance — not merely purchase price per tool. This is the high-margin, differentiated part of the business.

2. Durable accessories tied to capex. Toolholders, chucks, and workholding sell alongside new machines and new production lines. This half rises and falls with factory investment and reshoring capex — lumpier and more cyclical.

3. Aftermarket services. Tool regrinding, recoating, and application engineering (helping a shop cut a hard alloy faster) add sticky, higher-margin recurring revenue and lock in the installed base.

The metrics that matter for a manufacturer here:

• Capacity utilization of the toolmaker's own carbide-pressing/grinding plants — fixed-cost-heavy, so margins swing with volume.
• Input costs: tungsten and cobalt (the carbide powder), plus HSS. These are volatile, critical-mineral inputs concentrated in China (see risks). Raw-material spikes compress gross margin unless passed through in price. Producers use long-term contracts, spot purchases, and recycling in different proportions; vertical control over powder and scrap recovery can improve security of supply but adds capital and process complexity.[7]
• Price versus raw-material timing: producers must recover tungsten, cobalt, steel, tariff, and freight inflation through list-price increases or surcharges. Contract lags can squeeze margins even when the increase is ultimately recoverable.
• Gross and operating margin: as a reference point, Kennametal ran a company-wide operating margin of ~7.3% in FY2025 versus ~8.3% in FY2024, on sales that slipped ~4% to $1.97 billion; its Metal Cutting segment specifically ran 7.1% versus 10.4% the prior year — showing how cyclical volume and mix drive profitability.[7][12]
• Working capital / inventory: broad SKU counts (tens of thousands of tool geometries) mean inventory management is central to returns. Availability can win business, but maintaining the catalogue creates inventory and obsolescence risk.

As an investment, the appeal is a consumable with recurring demand and pricing power on performance; the vulnerability is operating leverage — because plants are capital-intensive, a downturn in machining volume hits margins hard.

6. What drives demand

• U.S. industrial production and durable-goods output. Cutting-tool consumption is a near-real-time proxy for machining activity. AMT explicitly describes cutting-tool consumption as a leading indicator of U.S. manufacturing activity; 2025 shipments totaled $2.56 billion, up 2.5% from 2024.[2]
• End-market mix: general engineering/machine shops (the largest slice), transportation/automotive, aerospace and defense, and energy. At Kennametal's Metal Cutting segment, general engineering is the biggest share, followed by transportation, aerospace and defense, and energy. Fiscal-2025 Metal Cutting sales declined 5% as weakness in general engineering, transportation, and energy outweighed aerospace-and-defense growth.[7]
• Aerospace ramp: rising commercial build rates and defense demand lift consumption of tools for hard-to-machine alloys (titanium, nickel superalloys), which wear tools faster and sell more premium tooling. Aerospace is structurally attractive because these materials shorten tool life and reward grade, geometry, and coating innovation.[22]
• Reshoring and factory automation: new U.S. capacity and robot-tended CNC cells drive both consumable and accessory demand. Automation raises the value of predictable tool life: an unattended machining cell needs consistent wear behavior, monitoring, and automatic tool-change integration.[22]
• EV and energy retooling: new powertrain and battery/energy lines create fresh machining demand and new tool geometries. However, automotive electrification is also a substitution risk: battery-electric vehicles eliminate conventional engines and much of the transmission, reducing metal-cutting content. Mitsubishi Materials estimates that cemented-carbide tool use per EV is about 25%–30% lower than for a gasoline vehicle.[23] Offsets include machining of motor housings, rotors, thermal-management parts, battery structures, and lightweight materials, but these may not fully replace lost engine and transmission content.
• Additive manufacturing: both substitute and complement. It reduces material removal and can bypass conventional tooling in low-volume, complex parts. Yet NIST notes that additive parts often require drilling, tapping, surface finishing, or other machining to achieve final geometry and surface quality, and additive alloys can be more difficult to machine than wrought equivalents.[24] Thus additive manufacturing can reduce rough-machining volume while creating demanding finishing applications.
• Cyclicality: because it tracks utilization, demand is procyclical and can turn sharply — a leading, not lagging, signal. Distributor destocking can deepen reported downturns.

7. Regulation

The product itself is lightly regulated, but several regimes matter:

• Worker health / OSHA: grinding tungsten-carbide and cobalt generates hazardous dust; chronic cobalt/hard-metal exposure causes "hard metal lung disease." OSHA's permissible exposure limit for cobalt metal, dust, and fume is 0.1 mg/m³ as an eight-hour time-weighted average; controls can require process enclosure, exhaust ventilation, and protective equipment.[25] Metalworking fluids and dust controls are OSHA/NIOSH concerns for plants. Producers also face air, wastewater, hazardous-waste, and contaminated-site liabilities associated with powders, grinding sludges, coolants, and coating chemicals.
• Trade and tariffs: this is import-heavy, so trade policy is a first-order variable. Section 301 tariffs on Chinese goods, Section 232 metals actions, and antidumping/countervailing duties on tungsten products all move landed costs and competitive position — cutting both ways for U.S. makers (protection on finished tools, higher cost on imported carbide inputs).
• Critical minerals / export controls: tungsten and cobalt are designated critical minerals with China-concentrated supply. USGS reports U.S. net import reliance of 50% for tungsten, with imports from China representing an estimated 14% of U.S. consumption.[26] China placed tungsten products under export control in 2025, making supply security a policy and procurement issue.[7]
• Defense/dual-use: tooling sold into defense supply chains can touch ITAR/export-control obligations.

None of these is a rate-setting regulator; the binding constraints are trade policy and input-mineral security, not price regulation.

8. Competitive dynamics and consolidation

A revealing contrast sits in the federal data:

• Domestically fragmented. The top four firms hold just 17.6% of U.S. receipts, the top eight 25.7%, the top 20 41.6%, and the top 50 60.4% — with a Herfindahl-Hirschman Index (HHI, a standard concentration measure where under 1,500 is "unconcentrated") of only 130.2.[9] By the raw U.S. numbers this looks like a highly fragmented industry of small shops. USCTI reports more than 70 members across carbide tooling, drills and reamers, milling cutters, PCD/CBN products, substrates, coatings, and holders — evidence of breadth in the supplier base.[27]
• Globally concentrated. In reality the world market is dominated by a short list of vertically integrated majors — Sandvik (Coromant/Seco/Walter), Berkshire's IMC/ISCAR, Kennametal, Kyocera, Mitsubishi Materials, Sumitomo, OSG, and Ceratizit.[5][13] The low U.S. concentration is partly an artifact: foreign giants show up only through their U.S. establishments, so the Census understates how concentrated the actual competitive field is.

Consolidation has been steady and is likely to continue (forward-looking): Berkshire rolled ISCAR up under one owner and folded in Tungaloy; Sandvik has repeatedly acquired tooling and software firms; Berkshire Partners' Harvey Performance acquired ATA in 2024; and the long tail of U.S. family shops is a natural roll-up target for private equity (as with Privet's Hardinge take-private).[16][19][20] Competitive advantage concentrates in materials science (carbide grades, coatings), application engineering, and distribution reach — favoring scale players — while niche shops survive on specials, fast turnaround, and regrind services.

9. Risks

• Cyclicality and operating leverage. Demand tracks manufacturing utilization; a downturn cuts volume and compresses margins quickly given fixed-cost plants.[7]
• Raw-material price and supply concentration. Tungsten and cobalt are volatile, China-dominated critical minerals; U.S. net import reliance for tungsten is 50%.[26] Price spikes or export restrictions hit both cost and availability. China placed tungsten products under export control in 2025.[7]
• Import competition and trade whipsaw. Tariffs protect finished-tool pricing but can raise input costs; policy shifts can reprice the whole supply chain either way.
• Technological substitution. Better tool life and coatings can reduce the number of consumables sold per part; additive manufacturing removes some machining steps entirely, trimming certain tool demand over time (a long-run, forward-looking risk). EV adoption reduces per-vehicle cutting-tool content by an estimated 25%–30% compared to gasoline vehicles.[23]
• Customer concentration in cyclical end-markets (autos, aerospace) transmits their downturns directly.
• Skilled-labor scarcity. Toolmaking and precision grinding depend on an aging, hard-to-replace craft workforce. BLS projects about 34,200 annual openings for machinists and tool-and-die makers over 2024–2034, all from replacement needs, even though total employment is projected to decline 2%.[28] NIST identifies retirements and changing technology requirements as central manufacturing skills-gap drivers.[29]

10. How to invest and the outlook

Public routes.

• Closest pure-play: Kennametal (NYSE: KMT) — the one large U.S.-listed name where cutting tools/metal cutting are the core business. It pays a dividend (a $0.20 quarterly rate, ~$0.80 annualized, in fiscal 2025); as with any cyclical, judge valuation and yield against where you are in the manufacturing cycle rather than a static multiple. Note that its Infrastructure segment accounted for $747 million of fiscal-2025 sales, and 60% of consolidated sales were generated outside the United States.[7]
• Diversified majors: Sandvik (SAND), Kyocera (KYOCY), and Japanese-listed Mitsubishi Materials (5711), Sumitomo Electric (5802), and OSG (6136) give tooling exposure bundled with much larger, unrelated businesses — broad industrial bets, not tooling-pure ones.[13][14][15]
• Indirect: Berkshire Hathaway (BRK.B) owns ISCAR/IMC outright, one of the top-three global toolmakers — a tiny fraction of Berkshire, but genuine exposure.[16]
• Picks-and-shovels: distributors MSC Industrial (MSM) and Grainger (GWW) monetize tool consumption without factory risk. MSC's results are blended with a broad MRO distribution business.[21]

Private routes. This is where most of the U.S. industry actually sits: PE-owned platforms (e.g., Hardinge under Privet, Harvey Performance under Berkshire Partners) and hundreds of family-owned tool, insert, and workholding makers — a fragmented base well suited to buy-and-build roll-ups, direct acquisition of a specialist shop, or supplier positions serving reshored production. Barriers are moderate (materials know-how, precision equipment, distribution), and niche specialization plus regrind/recoat services support durable local franchises. Diligence should focus on customer and distributor concentration, percentage of custom versus commodity revenue, raw-material pass-through, plant utilization, regrind economics, technical-worker retention, environmental history, carbide-scrap recovery, inventory quality, and ownership of designs or process data.

Near-term outlook (forward-looking). Full-year 2025 shipments of $2.56 billion were up 2.5% from 2024, with USCTI's leadership describing the industry as "cautiously optimistic that 2026 will be slightly better than 2025."[2] The upside drivers are reshoring capex, a firm aerospace and defense build cycle, and EV/energy retooling; the swing factors are U.S. manufacturing utilization and tungsten supply/tariff dynamics.[22] Structurally, it remains a small, cyclical, consumable-driven, globally consolidated industry — attractive for its recurring razor-and-blades demand and pricing power on performance, but exposed to industrial cycles and critical-mineral supply.

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Sources

1. U.S. Census Bureau / NAICS Association, 2022 NAICS Definition — 333515 Cutting Tool and Machine Tool Accessory Manufacturing. https://www.naics.com/naics-code-description/?code=333515
2. AMT – The Association For Manufacturing Technology & U.S. Cutting Tool Institute (USCTI), Cutting Tool Market Report (U.S. cutting-tool shipments 2025), 2025. https://amtonline.org/article/december-2025-us-cutting-tool-shipments-totaled-usd215m-up-17-1-from
3. U.S. Census Bureau, NAICS 2022 industry hierarchy and cross-references. https://www.census.gov/naics/?details=333&input=333&year=2022
4. IBISWorld / U.S. Census Bureau, NAICS 333517 Machine Tool Manufacturing and NAICS 332216 Saw Blade and Handtool Manufacturing (scope boundaries), 2025. https://www.ibisworld.com/classifications/naics/333517/machine-tool-manufacturing/
5. openpr / market research, Cutting Tools and Inserts Market — Leading Companies (tungsten carbide ~53% / HSS ~28% of tools; global leaders), 2025/2026. https://www.openpr.com/news/4517173/cutting-tools-and-inserts-market-growth-to-record-us-19-94
6. Kennametal Inc., Tungsten Carbide Materials — Process Description (sintering temperatures, shrinkage). https://www.kennametal.com/be/en/products/carbide-wear-parts/fluid-handling-and-flow-control/separation-solutions-for-centrifuge-machines/tungsten-carbide-materials.html
7. Kennametal Inc., Form 10-K FY2025 (sales, segments, operating margin, raw materials, distribution, workforce). https://www.sec.gov/Archives/edgar/data/55242/000005524225000068/kmt-20250630.htm
8. U.S. Census Bureau, County Business Patterns (CBP), 2023 — NAICS 333515 (establishments, employment, annual and Q1 payroll). https://www.census.gov/programs-surveys/cbp.html
9. U.S. Census Bureau, 2022 Economic Census — Concentration/Selected Statistics, NAICS 333515 (firms, receipts, CR4/CR8/CR20/CR50, HHI). https://www.census.gov/programs-surveys/economic-census.html
10. U.S. Small Business Administration, Table of Small Business Size Standards, 2023 (NAICS 333515 = 500 employees). https://www.sba.gov/document/support-table-size-standards
11. Market Research Future, US Cutting Tools Market (consumption estimate ~$15.14B in 2024), 2025. https://www.marketresearchfuture.com/reports/us-cutting-tools-market-13197
12. Kennametal Inc., Fiscal 2025 and Fourth Quarter Results (press release), 2025. https://www.prnewswire.com/news-releases/kennametal-reports-fiscal-2025-and-fourth-quarter-results-302522561.html
13. Sandvik AB, Annual Report 2024 (Machining segment revenue SEK 48.6B, ~40% of group; brands Coromant, Seco, Walter). https://www.annualreport.sandvik/en/2024/
14. Kyocera Corporation, ADR (KYOCY) listing data, Nasdaq/Morningstar, 2026. https://www.nasdaq.com/market-activity/stocks/kyocy
15. Mitsubishi Materials Corporation, Fiscal 2026 Investor Presentation (fiscal-March-2025 Metalworking Solutions segment data). https://ir.mmc.co.jp/en/ir/news/auto_20260513528266/pdfFile.pdf
16. Berkshire Hathaway Inc., Form 10-K 2025 (IMC/ISCAR revenue, earnings, raw-material commentary). https://www.sec.gov/Archives/edgar/data/1067983/000119312526083899/brka-20251231.htm
17. Berkshire Hathaway Inc., press releases on the ISCAR/IMC acquisition (80% in 2006) and purchase of the remaining 20% (2013). https://www.berkshirehathaway.com/news/jul0506.html
18. Berkshire Partners, Harvey Performance Company portfolio page. https://berkshirepartners.com/portfolio-companies/harvey-performance-company/
19. Harvey Performance Company, Harvey Performance Company Acquires ATA (press release), 2024. https://www.harveyperformance.com/in-the-loupe/press-harvey-performance-company-acquires-ata/
20. Privet Fund Management LLC / Business Wire, Acquisition of Hardinge Inc. (~$245M take-private), 2018. https://www.businesswire.com/news/home/20180212006399/en/Hardinge-Acquired-Privet-Fund-Management-LLC-18.50
21. MSC Industrial Direct Co., Form 10-K 2025. https://www.sec.gov/Archives/edgar/data/1003078/000100307825000123/msm-20250830.htm
22. Fortune Business Insights, Precision Machining Market (reshoring, aerospace, EV demand drivers), 2025. https://www.fortunebusinessinsights.com/precision-machining-market-115757
23. Mitsubishi Materials Corporation, Investor Q&A — EV content estimate. https://ir.mmc.co.jp/en/ir/library/other/main/02/teaserItems3/0/linkList/08/link/00.pdf
24. National Institute of Standards and Technology (NIST), Post-Process Machining of Additive Manufactured Stainless Steel. https://www.nist.gov/publications/post-process-machining-additive-manufactured-stainless-steel
25. Occupational Safety and Health Administration (OSHA), Cobalt Dust Guidance. https://www.osha.gov/etools/sawmills/plant-wide-hazards/health-hazards/cobalt-dust
26. U.S. Geological Survey (USGS), Minerals Net Import Reliance — China. https://www.usgs.gov/media/images/minerals-net-import-reliance-china
27. U.S. Cutting Tool Institute (USCTI), Membership and industry scope. https://www.uscti.com/
28. Bureau of Labor Statistics (BLS), Occupational Outlook Handbook — Machinists and Tool-and-Die Makers. https://www.bls.gov/ooh/production/machinists-and-tool-and-die-makers.htm
29. National Institute of Standards and Technology (NIST), Manufacturing Workforce Development. https://www.nist.gov/mep/manufacturing-workforce-development