Abstract: The invention relates to improvements in the multiple spindle rotary indexing machine tool systems of the prior art. Traditionally, such machine tool systems include a base and an upstanding vertical column which houses a plurality of machining stations each equipped with two-axis tool slides. In addition, the base supports a rotatable worktable, which carries a number of work-holding spindles. As the worktable rotates, these spindles are indexed through successive machining stations where a variety of operations are performed. In accordance with the invention, a spindle position measurement unit is provided to dynamically measure the exact location of each spindle indexed to position at a modified machining station. A computerized numerical control system calculates spindle position errors based on the position information provided by the measurement unit and offsets tool slide position commands to compensate for those errors.