Everything between raw stock and finished goods. Usually too much of it.
Work in process is the inventory most shops do not realize they have. Raw stock sits in the rack, finished goods sit in the ship-ready area, but WIP is scattered across carts, benches, and floor staging zones throughout the shop. Adding it up takes a walk, not a report. And the total is almost always larger than the owner expects.
"WIP looks like busy. It is usually slow."
WIP is material that has been released to the floor but is not yet finished. It enters when a raw piece is cut, bent, drilled, or otherwise transformed by the first operation. It exits when the last operation hands the part to packing or to the ship-ready rack. Between those two moments, WIP can be at a workstation being worked on, in a cart waiting for the next operation, in a kitting area being staged, or on a bench during inspection.
The size of WIP at any moment is set by two things: how fast material is released to the floor and how fast the value stream can flow it through. If release rate is higher than flow rate, WIP grows. If release rate is lower, WIP shrinks. Most shops have an implicit release policy of "as soon as the order comes in, push it to the floor," which guarantees WIP grows whenever flow hiccups. A pull system inverts this: material is only released when downstream operations are ready to consume it.
The relationship between WIP and lead time is mathematically tight. Little's Law says average WIP equals throughput rate times average lead time. Cut WIP in half and lead time falls in half, assuming throughput stays the same. That is why lean shops obsess over WIP control. It is not about saving carrying cost (though that helps). It is about cutting the calendar time a customer waits.
The lever to keep WIP in line is a WIP limit, an explicit cap on how many parts a stage is allowed to hold. When the cap is hit, the upstream operation stops, no matter what the schedule says. The discomfort of stopping forces the real problem (slow flow at the bottleneck) into the open instead of hiding it under a growing WIP pile.
Picture a 25-person fab shop running steel parts for two industrial OEMs. The owner thinks the shop is productive because the carts are always full. A walk-through tells a different story. Between the laser and the brake, there are six carts averaging three days of parts each. Between the brake and the weld station, four carts averaging four days. Between weld and the ship-ready rack, three carts averaging two days. Total WIP across the shop is roughly nine days of parts.
The shop runs at about 50 parts per day. By Little's Law, average lead time for a part to move through the shop is roughly the WIP divided by the throughput, which is about nine days just for processing, plus material wait and shipping. The owner has been quoting four weeks. Most of that four weeks is WIP carts. A WIP cap of one day between each pair of operations would cut the lead time by about a week without touching any machine, just by forcing the bottleneck to surface and get fixed.
WIP is what WIP limits cap. Standard WIP is the sized version of WIP that a process is designed to hold. WIP that exceeds standard becomes excess inventory, which is one of the lean wastes. The most reliable way to keep WIP in line is a pull system that only releases material when downstream operations are ready to consume it, and WIP is directly tied to lead time through Little's Law.
The questions we hear most about this term.
Long-form guides that pick up where this definition leaves off, written for manufacturers running Arda today.
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