Technical failures in machines are major sources of unplanned downtime in any production and result in reduced efficiency and system reliability. Despite the well established potential of Machine Learning techniques in condition-based maintenance (CBM), the lack of access to failure data in production machines has limited the development of a holistic approach to address machine-level CBM. This paper presents a practical approach for failure mode prediction using multiple sensors installed in a bearing ring grinder for process control as well as condition monitoring. Bearing rings are produced in a set of 7 experimental runs, including 5 frequently occurring production failures in the critical subsystems. An advanced data acquisition setup, implemented for CBM in the grinder, is used to capture information about each individual grinding cycle. The dataset* is pre-processed and segmented into grinding cycle stages before time and frequency domain feature extraction. A sensor ranking algorithm is proposed to optimize feature selection for failure classification and the installation cost. Random forest models, bench-marked as best performing classifiers, are trained in a two-step classification framework. The presence of failure mode is predicted in the first step and the failure mode type is identified in the second step using the same feature set. Defining the feature set in the failure detection step improves the predictor generalization with the classifiers' performance accuracy of 99% on the test dataset. The presented approach demonstrates an efficient failure mode classification by selecting crucial sensors resulting in a cost effective CBM implementation in a bearing ring grinder