GlossaryInventory ManagementBeginner

Work-In-Progress (WIP)

Materials and components that have entered the production process but are not yet finished goods, representing capital tied up on the factory floor.

Work-In-Progress (WIP) refers to all materials, components, and sub-assemblies that are currently somewhere in the production process — they have been started but not yet completed as finished goods. WIP represents a significant investment of capital, floor space, and management attention in any manufacturing operation. Excessive WIP is one of the most visible symptoms of production scheduling problems: it indicates that work is being started faster than it is being finished, that batch sizes are too large, or that bottlenecks are causing material to pile up between operations. Controlling WIP is fundamental to lean manufacturing and directly impacts lead time, cash flow, quality, and scheduling flexibility. The relationship is mathematical: by Little's Law, Lead Time = WIP / Throughput, meaning that reducing WIP directly reduces lead time by the same proportion.

Why WIP Accumulates

WIP builds up when the rate of work entering a process exceeds the rate of work leaving it. Several common production scheduling patterns cause this imbalance. Push scheduling releases work based on forecasts rather than actual downstream capacity, often overloading bottleneck operations. Large batch sizes mean that entire batches must wait at each station, creating queues proportional to batch size. Unbalanced line speeds cause faster upstream stations to outpace slower downstream stations, creating inter-station inventory. Variable processing times mean that some cycles take longer than average, creating temporary queues that persist because subsequent cycles do not fully compensate. Machine breakdowns halt a station while upstream stations continue producing, injecting WIP into the system. Prioritization changes cause partially completed orders to be set aside for rush jobs, creating abandoned WIP. Understanding which of these causes is dominant in your factory is essential for choosing the right WIP reduction strategy.

WIP Limits and Pull Systems

The most effective way to control WIP is to set explicit limits on the amount of work allowed in each stage of the production process. These WIP limits — also called CONWIP (Constant WIP) when applied to the total system — create a pull-based system where new work is only released when a downstream completion creates capacity. Kanban is the most common mechanism for implementing WIP limits: each kanban card authorizes one unit (or container) of WIP, and the total number of cards sets the limit. When all cards are in circulation, no new work can start until a card returns from a completed unit. Setting the right WIP limit requires balancing two competing goals: too little WIP risks starving downstream operations (especially when processing times are variable), while too much WIP defeats the purpose of the limit. A practical starting point is to set WIP limits at 1.5 times the average throughput for each stage, then reduce them gradually as the process stabilizes and variability decreases.

Scheduling to Minimize WIP

Production scheduling directly controls how much WIP is in the system by determining when and how much work is released to the floor. A schedule that releases all of next week's orders on Monday morning creates a WIP spike that takes all week to process, while a schedule that releases orders daily or per-shift maintains a steady, low WIP level. LinePlanner's shift-level scheduling granularity supports this leveled release strategy by allowing planners to assign specific orders to specific shifts rather than dumping an entire week's workload at once. Sequencing rules also matter: scheduling similar products together (campaign scheduling) reduces changeover time and prevents the changeover-related WIP spikes that occur when the line produces small batches of many different products. Visual scheduling makes WIP problems immediately visible — when the production calendar shows orders stacking up at a particular line or stage, the planner can rebalance the load before WIP spirals out of control.

Frequently Asked Questions

What is Little's Law?

Little's Law states that Lead Time = WIP / Throughput. This means if you reduce WIP by half while maintaining the same throughput, lead time will also be cut in half. It is one of the most powerful relationships in manufacturing operations.

How do you calculate WIP inventory value?

Count all units currently in production (between first operation and final completion) and multiply by the accumulated cost at each stage — including raw material cost plus labor and overhead applied so far. This represents the capital tied up in your production floor.

What is a good WIP level?

There is no universal target — the right WIP level depends on your product, process variability, and customer lead time requirements. The goal is the minimum WIP that maintains smooth flow without starving downstream operations. Track WIP turns (annual throughput / average WIP) and aim to improve over time.

Related Terms & Resources

Ready to streamline your production scheduling?

Join manufacturing teams who have replaced spreadsheet chaos with LinePlanner's visual production calendar. Start your free trial today.