You might have a cutting tool last weeks or a month if you were a low-volume shop, but they don't last that long for our high volume CNC factory.
Only CNC I've experience with was for prototyping only, so
very low volume indeed. Actually, 300 in a month sounds about right.
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While it is true that most of the stories about katanas are exaggerated beyond mortal comparison, they did quite a good job considering the poor quality of their ores. The folding to create fine, alternating layers of high and low carbon steels is both an early example of composite construction (it's too macroscopic to be considered an alloy) and more importantly for this thread, easily doable by dwarves. Just a simple steel + pig iron = 2x folded steel.
Early Japanese metallurgy is quite a bit different from the katana specifically, though. The Vikings folded different alloys together centuries before the Japanese did, for the same reasons (very low quality ore).
The layers also were not alternating high/low carbon. Forge-folding will actually
equalize carbon content between different alloys. Other alloying elements are not as mobile as carbon, though, and end up stuck in their layers, which is why folded steel can be etched to show the layers. But the carbon content of the whole thing will be homogenous, if it's folded into more than about, oh... 30-50 layers?
Also, pig iron has the [BRITTLE] tag for a reason. Even heated to what
would be forging temperature for steel, it will break rather than bend. Given the carbon content, you'd also end up with very brittle steel, even if successful.
What would actually be a bit closer to the reasoning behind folding metals together, for the Vikings and the Japanese at least, would be 1 iron + 1 steel = 2 very slightly weaker steel. I.e., if you don't have enough "premium" steel to make an entire blade out of (or to arm an entire army with), you can fold it together with inferior steel to end up with something entirely adequate, but not quite as good as the "premium" metal you started with. And that actually could be a very valid approach in some games, where steel is just too hard to mass produce (though I hope the dependence on flux is removed).
It would also be possible to accidentally produce a batch of overly-brittle steel, then forge-fold that together with the overly-soft steel you accidentally made last week, and get "regular" steel. But that's probably well outside the scope of DF. I would hate having to micromanage what properties each individual bar of steel had!
I think a better way would probably be to just have ores and metal bars have quality mods. A good furnace operator can increase the quality of the bar over that of the ore by a bit. And a good quality bar will produce a very slight boost to the quality mod of the resulting item. Different quality bars can be forge-folded together to produce intermediate quality bars (shifted towards the quality of the better one by skill of the blacksmith). Add a couple special rules for folding iron and steel together (like that a ☼iron bar☼ is equal to a no-quality steel bar), and you're done.