Failure analysis results were employed to identify a better alloy. Chipper knives used in the field to chip logs failed frequently. The knives were made of alloys with a composition of Fe-0.48C-0.30Mn-0.90Si-8.50Cr-1.35Mo-1.20W-0.30V. The development of tougher alloy steel with superior properties was initiated. The nominal composition of Fe-0.50C-0.30Mn-0.40Si-5.00Cr-2.00Mo was developed which achieved the goals of edge retention, resistance to softening under frictional heating, wear resistance, ease of heat treatment, dimensional stability in heat treatment, grindability, and low alloy cost. A chip harvester made from this composition was tested in field with older composition knives. It was found that the new knives outperformed the older knives. The key to the development was interpreted to be careful study of a number of failed knives with different problems used in different types of operations.