Experimental investigations have been conducted on the chips and common types of discreteness in the form of serrated saw teeth (primary or secondary) have been identified. It has been observed that the chip formation process has a discrete nature, associated with the periodic shearing process of the chip during machining of stainless steel. Mechanism of formation of these teeth has been studied and the frequency of their formation has been determined. The different modes of the vibrating components of the vertical machining centre have been extracted by modal analysis and the vibration responses during cutting conditions have also been recorded using an online monitoring data acquisition system. It has been concluded from the findings that chatter is the outcome of resonance, which occurs in the system when the frequency of secondary or primary serrated teeth formation is approximately equal to or an integer multiple of the ‘prominent mode frequencies’ of the system components.