work-in-process (WIP)

Work-in-process (WIP) commonly refers to material, components, subassemblies, or products that have entered the manufacturing process but are not yet finished goods. WIP sits between raw materials and completed products and includes anything currently undergoing value-adding steps such as machining, assembly, testing, or packaging.

In industrial and regulated environments, WIP often appears in production records, MES dashboards, ERP inventory views, and shop-floor reports. It is typically tracked by quantity, location, order or batch, status, and sometimes by quality state or hold codes.

What work-in-process includes

WIP generally includes:

• Parts and assemblies on machines, in work cells, or in staging areas between operations
• Batches or lots that have started processing but have not completed all required steps
• Units in inspection, test, rework, or queued for the next operation
• Material in controlled storage that is tied to an open work order or batch record

In accounting and inventory terms, WIP often carries both material and applied labor/overhead value. Operationally, it represents current production load and flow through the plant.

What work-in-process does not include

WIP typically does not include:

• Raw materials or components that have not yet been released to a production order
• Finished goods that have completed all defined manufacturing and quality steps
• Maintenance spare parts or consumables not tied to a production order

WIP in OT, MES, and ERP contexts

Across shop-floor and business systems, WIP visibility is a common requirement:

• MES: Tracks WIP at the operation or step level, often by unit, lot, or serial number, including status (e.g., in process, on hold, under inspection).
• ERP/MRP: Represents WIP as an inventory and cost category linked to work orders, routings, and bills of material.
• OT and control systems: Indicate real-time WIP presence at machines, lines, or buffers, often aggregated by counts or sensors.

In regulated manufacturing, WIP tracking is frequently tied to traceability, electronic batch records, genealogy, and evidence of process execution.

Operational uses of WIP

Work-in-process information is commonly used to:

• Monitor production flow, bottlenecks, and queue lengths
• Align scheduling, capacity planning, and material release
• Support traceability, including where specific units or lots are in the process
• Calculate performance indicators such as lead time and inventory turns
• Manage holds, deviations, and rework on partially completed product

Common confusion

• Work-in-process vs. work-in-progress: In many manufacturing and accounting contexts, these terms are used interchangeably. Some organizations reserve “work-in-progress” for non-manufacturing projects, but practices vary.
• WIP vs. WIP limit: A WIP limit is a management rule (often used in lean or flow-based systems) that caps the amount of WIP allowed. WIP itself is the inventory; the WIP limit is a policy applied to it.
• WIP vs. cycle time: WIP is how much is in process; cycle or lead time is how long it takes to move through the process. They are related but not the same metric.

Link to MES advantages context

In discussions of MES and integrated manufacturing systems, “work-in-process visibility” usually refers to the system’s ability to show where each order, lot, or unit is in the process, its current step, status, and any holds or quality issues affecting that WIP. This visibility depends on data integration, disciplined recording of production events, and consistent use of identifiers such as lots or serial numbers.