Bone drilling operation is performed to join fractured bone tissues during physical trauma. Natural bone growth and remodelling of fractured bone fragments is possible by immobilisation of affected bone. Immobilisation is achieved by use of screws and plates with drilling facilities. Similarly internal fixation of screws [1] during intramedullary nailing often involves bone drilling. The heat generation model [2] has proved that, generation and accumulation of heat above temperature level of 470c for one minute during drilling is the alarming signal for thermal necrosis which causes irreversible bone damage. To study bone drilling in concern with thermal necrosis, threshold temperature has to be the prime concern and accordingly drilling parameters and specifications are to be selected. In this study, drilling process is conducted on a sheep rib bone. Optimization of drilling parameters such as drilling speed, feed rate and drill specification like drill tool diameter is suggested using Taguchi and ANOVA method. Results indicate drill diameter is most influencing factor contributing 90.71% for heat generation, followed by feed rate 5.69% and drill speed 2.22%. Based on discussions and conclusions a drill machine with attachments of infrared thermometer, speed sensor and camera is designed and fabricated. This machine alarms surgeon when temperature level at drill site increases above 470c, which is a threshold temperature of thermal necrosis.