This paper draws from fundamental research on precision forging for the development of a flexible tool system for producing gear parts. The overall investigation makes use of conventional spur gears. Fundamental research is undertaken by using virtual prototyping modeling techniques based on the finite element method. The utilization of such techniques provides a better insight into the deformation mechanics during the forging process, by giving an accurate description of the material flow, filling conditions and corresponding geometrical profiles. The finite element method also enables the prediction of stresses and forces exerted on tools as well as the distribution of the major field variables in the forged parts. The application of tool design expertise in conjunction with the virtual prototyping modeling techniques made possible the development of a tool system for performing the experiments. The experimental work is mainly utilized for supporting and validating the theoretical investigation but a later stage can be further developed in order to put the proposed forging concept on an industrial basis.