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The tutorial explains how to create a coordinate system in CAD/CAM software. It starts by selecting the origin point as the starting reference. Then, a shape like a rectangle is sketched from the origin. The dimensions and extrusion of the shape are specified. The center point is important for locating coordinates. Dynamic part drawing is emphasized, along with using reference geometry and defining origins. Shifts in directions, such as X and Y, and defining curves are also covered in the tutorial.