Machine tools are traditionally designed to maximize performance, precision and repeatability of manufacturing processes. New criteria for design including maximizing energy efficiency and reconfigurability are now emerging. In this paper, a novel methodology is proposed for representing machine tool elements as smart interlocking software blocks that are dynamically structured based on predefined ontology and then combined to form a holistic model of a machine tool. This model can be used to assess, simulate and optimize the machine tool against a range of criteria. A prototype implementation of the methodology is demonstrated using two test cases for kinematics and power usage.