INTELLIGENT, REAL-TIME, PREDICTIVE DIAGNOSTICS IS AN AREA OF POTENTIAL SIGNIFICANCE TO MANUFACTURERS IN TERMS OF COST SAVINGS AND MACHINE UPTIME. SOME OF THE BENEFITS OF PREDICTIVE DIAGNOSTICS ARE THAT EQUIPMENT PROBLEMS ARE DETECTED AND CORRECTED PRIOR TO ANY CATASTROPHIC FAILURES, MAINTENANCE PROCEDURES ARE SCHEDULED WITH LITTLE OR NO DISRUPTION IN PRODUCTION ACTIVITIES, AND UNNECESSARY MAINTENANCE SCHEDULES ARE VIRTUALLY ELIMINATED. IN THIS STUDY, AN INTELLIGENT, REAL-TIME, MULTI-SENSOR BASED MONITORING SYSTEM HAS BEEN DEVELOPED AND TESTED FOR FACTORY FLOOR APPLICATIONS. ITS SUITABILITY IS DEMONSTRATED THROUGH TWO DIFFERENT APPLICATIONS: CUTTING TOOL DIAGNOSTICS AND MACHINE TOOL MONITORING. THE SYSTEM, EMPLOYING A REAL-TIME EXPERT SYSTEM, PREDICTS DRILL WEAR AND FAILURE IN THE FIRST APPLICATION AND DIAGNOSES THE CONDITION OF A BEARING IN THE SECOND. THE SYSTEM ALSO HAS THE ABILITY TO