During machining of shafts with multiple shoulders on CNC lathes it is necessary to obtain the accuracy of all dimensions automatically since re-setup of the machine tool for each individual part would be time consuming. In cases when the process datum is different from the design datum, datum errors may occur. This error may require the reduction of the process tolerance, which may lead to increased manufacturing costs. The resulting datum error depends on the method of holding the workpiece and the way the cutting tool is set up. This paper analyses the most widely used fixturing and setup methods and estimates the datum errors they may cause.