The paper deals with the study of cost reduction of crankshaft manufacturing through reduction of cost of tools in crankshaft manufacturing line in an automobile component industry located in South India. The tool cost comprises of around 15% of the total cost of production in the company. Any attempt to bring down the tool cost can result in significant reduction in the total cost of production. The usual focus on cost reduction is through tool life improvement or purchase price reduction. However, in the present work the focus is on capability improvement of the tool, which can result in substantial cost reduction. Also, improvement in tool life or reduction in tool price by use of alternative tool offers a potential for tool cost reduction. By comparing the previous 10 months? tool cost data of different operations of the line with the August 2014 data it was concluded that Journal Turning operation of the line requires special attention in terms of tool cost reduction. So focus was on the tool cost reduction of Journal Turning operation and was achieved by use of alternate tool for a specific operation of journal turning.