Cutting tools are the hard tips and inserts that do the actual cutting inside a machine tool. A CNC machine only moves them. The tip touches the metal, so it wears out, and it has to be replaced again and again.
An insert is a small piece of a very hard material, usually tungsten carbide, shaped like a square or a triangle. It is screwed onto a holder. It has several cutting edges. When one edge is worn, the operator turns the insert to a fresh edge. When all edges are worn, the insert is thrown away and a new one is fitted. Inserts are often coated with a thin layer of a harder material, which lets them cut faster before they wear. Different metals need different inserts: aluminium cuts easily, while stainless steel is hard on the tip.
Consider what happens when a programmer raises the cutting speed. At the normal speed, a bracket takes 6 minutes to cut and an edge lasts 25 minutes. At the higher speed, a bracket takes 5 minutes, but an edge lasts only 15 minutes. For 100 brackets, the faster speed saves 100 minutes of machine time, which is worth ₹1,500 at ₹900 an hour. But it needs 34 edges, or 9 inserts costing ₹4,050, in place of 6 inserts costing ₹2,700. So the faster speed gains only about ₹150. The CAM software and the programmer must weigh both costs, because cutting faster makes an edge wear out sooner.
Worn tips also spoil the part. A blunt edge makes the sizes drift, and the part may leave its tolerance. A blunt edge also leaves a rough surface and can make the machine shake. So workshops change tips on a schedule, or when the machine measures a rising force on the tool.
For a tool maker, this is a business that repeats, because every machine keeps buying new tips for as long as it runs. It is a clear case of aftermarket sales. Some tool makers also make the software that programs their tools.