Hi James,

You may want to use Parts Inventory for this. 

You can then add Tools category into the Part Types field.

We plan to log any non-consumable tools as assets and separate them using categories. Another way we’ll differentiate them is by utilizing one of our existing systems- the asset code, which helps identify a particular asset. For example, one of our air compressors would be eAC1-1]. By making a small adjustment such as adding a “t.” prefix, eg. ,t.AC1-1], we could easily identify a tool by their name (or barcode field). Consumable tools such as grinder wheels or razor blades might be better logged under Parts Inventory.

I have tools listed under assets and assign them a unique location. 

James, our teams have had locations put tools under parts inventory as well as assets, I would recommend going the asset route, it is a much better solution for tooling in my opinion especially if you are using the costing metrics for parts inventory along with an ERP implementation, you will inflate your inventory value.