Tool management issues are gaining importance as they represent complex obstacles to the implementation of flexible manufacturing systems (FMSs). Both researchers and FMS users are interested in tool management; the most dynamic facility involving large numbers and varieties. To comprehend many complex asynchronous concurrent transactions in its management systems, the need for rigid mathematical algorithms is often stressed. In this paper, Petri nets (PTNs) are applied to analyse the issues at machine group level to get a better insight into tool management. Importance and relevance of PTNs for investigating tasks involved in the functioning and designing of tool management systems is made clear at various hierarchical levels (tool, machine, group and system levels). To establish the potential use of PTNs they are applied to the modelling of tasks involved in a centralized tool management system. Quantitative analysis is carried out by associating times with some or all transitions in the Petri net model. The system considered for analysis comprises a tool crib, three AGVs, two robots, one presetting station and two machining centres. Performance criteria used are (i) the production rate and (ii) the dynamic behaviour of the FMS. Analysis considers one of the possible product varieties for two different production volumes at two different machining centres, but it can be extended to different products. Performance of the system with tool sharing among the machining centres is found to have advantages over that where tool sharing is absent