The SGS 4701 displacement measuring system (Spindle Growth System) is developed specifically for high speed milling machine applications. Due to high machining speeds and the heat generated, the linear thermal expansion of the spindle in the precision machine tool must to be compensated for in order to keep the tool in a defined position at all times. The SGS sensor measures the thermal and centrifugal force expansion of the spindle. These measurement values are fed into the CNC machine tool as correction values, compensating for any positioning errors. The SGS 4701 operates on the eddy current measuring principle. This non-contact measurement method is wear-free. Furthermore, the measurement procedure is resistant to disturbances such as heat, dust and oil.