guide · work in progress (wip) in manufacturing · with a free calculator
Work in progress (WIP) in manufacturing
What it means, how to calculate it, and how much cash it's holding on your shop floor.
wip full form: work in progress
Work in progress (WIP) is everything you've started making but haven't finished: material issued to the floor, parts between operations, and jobs waiting at a machine, at inspection or at an outside process.
It's money you've already spent that no customer has paid for yet. In your accounts, it's part of inventory. On your shop floor, it's the queue every new job has to wait behind.
wip calculator — how much cash is stuck on your shop floor?
How much cash is stuck in your WIP?
Four numbers from your shop floor. You'll see the cash tied up in work in progress, how long a new job waits, and what changes if you start fewer jobs at once.
your numbers
Started, not yet finished. Count job cards or work orders.
Material plus work done so far, at cost.
On an average working day.
What your working capital costs you a year.
Fewer jobs started at once, with the same number finished each day.
These are example numbers. Replace them with yours. Nothing you type leaves your browser.
work in progress, at cost
₹48 lakh
is sitting on your shop floor: money you've spent that customers haven't paid for yet.
- A new job spends about
- 15 days
- on the floor before it's finished
- Carrying it costs about
- ₹5.76 lakh
- a year in interest alone
if you cut wip by 20%
- Cash freed
- ₹9.6 lakh
- Lead time
- 12 days
- Interest saved
- ₹1.15 lakh
- a year
Estimates from your numbers. Lead time uses Little's law and assumes your daily output stays the same. Interest is only part of the cost: space, handling, damage and late surprises add to it.
meaning — the same three letters, two different questions
Two meanings of WIP.
Your production head and your accountant both talk about WIP, but they're asking different questions. You need both answers.
on the shop floor
Where is every job, and why is it waiting?
WIP is counted in jobs, pieces or batches: what's between operations, what's waiting for material, what's queued at the bottleneck and what's out at a job worker. It decides your lead time and whether you keep your promised dates.
in your accounts
What is unfinished work worth today?
WIP is counted in rupees: material, labour and overheads spent on unfinished goods. It sits under inventories in current assets, and in India it's shown as its own line under inventories in the balance sheet.
in your language — hindi · marathi · gujarati
Work in progress in Hindi, Marathi and Gujarati.
The words your supervisors and accountants are likely to use, checked by native speakers. On many shop floors people simply say “WIP”, and that's fine too.
Hindiहिन्दी
On a sign
यहाँ कार्य प्रगति पर है
yahan karya pragati par hai
“work is in progress here”
In manufacturing and in the accounts
अर्ध-निर्मित माल
ardh-nirmit maal
“half-made goods”
What it means
वर्क इन प्रोग्रेस (WIP) का मतलब है वह सारा माल जिसे बनाना शुरू हो चुका है लेकिन जो अभी पूरा नहीं हुआ है: फ़्लोर पर दिया गया कच्चा माल, दो प्रक्रियाओं के बीच के पार्ट्स, और मशीन या बाहरी प्रोसेस पर इंतज़ार कर रहे जॉब।
Marathiमराठी
On a sign
येथे काम सुरू आहे
yethe kaam suru aahe
“work is going on here”
In manufacturing and in the accounts
अर्धवट तयार माल
ardhavat tayaar maal
“half-ready goods”
What it means
वर्क इन प्रोग्रेस (WIP) म्हणजे असा सर्व माल ज्याचे उत्पादन सुरू झाले आहे पण अजून पूर्ण झालेले नाही: फ्लोअरवर दिलेला कच्चा माल, दोन प्रक्रियांच्या मधले पार्ट्स, आणि मशीनवर किंवा बाहेरील प्रोसेससाठी थांबलेले जॉब.
Gujaratiગુજરાતી
On a sign
અહીં કામ ચાલુ છે
ahin kaam chalu chhe
“work is going on here”
On the shop floor
અર્ધ-તૈયાર માલ
ardh-taiyaar maal
“half-ready goods”
In the accounts
ચાલુ પ્રક્રિયા હેઠળનો માલ (WIP)
chalu prakriya hethalno maal
“goods under an ongoing process”
What it means
વર્ક ઇન પ્રોગ્રેસ (WIP) એટલે એવો બધો માલ જેનું ઉત્પાદન શરૂ થઈ ગયું છે પણ હજી પૂરું થયું નથી: ફ્લોર પર આપેલો કાચો માલ, બે પ્રક્રિયાઓ વચ્ચેના પાર્ટ્સ, અને મશીન પર કે બહારની પ્રોસેસ માટે રાહ જોતા જોબ.
formula — one for your accounts, one for your shop floor
How to calculate WIP.
1 · the accounting formula
Closing WIP = Opening WIP + Manufacturing costs − Cost of goods manufactured
Manufacturing costs are the material, labour and overheads put into production during the period. Cost of goods manufactured is the cost of everything that was finished.
Example: you started the month with ₹6,00,000 of WIP, put ₹30,00,000 into production, and finished goods costing ₹28,00,000. Closing WIP = 6,00,000 + 30,00,000 − 28,00,000 = ₹8,00,000.
2 · the shop-floor formula (little's law)
WIP = Output per day × Lead time (in days)
It holds for any steady process, and you can turn it around: lead time = WIP ÷ output per day. That's why starting more jobs doesn't make you faster. With the same output, more WIP simply means a longer wait for every job.
Example: 120 open jobs and 8 jobs finished a day means a new job waits about 120 ÷ 8 = 15 days. Bring open jobs down to 90 at the same output, and it waits about 11 days.
the cost — why too much wip hurts
Why too much WIP hurts.
Some WIP is normal: work has to wait somewhere. The trouble starts when the floor holds far more than it can finish.
Cash locked up
Material is paid for and wages are spent, but nothing can be invoiced until the job is finished and dispatched.
Longer lead times
Every extra job on the floor is another job in the queue. The more you start, the longer each one waits.
Problems found late
A wrong dimension in the first operation shows up three operations later, after a whole batch has been made.
Daily firefighting
With too many open jobs, nobody is sure what to run next, so the loudest customer decides.
Space, handling and damage
Half-finished parts crowd the floor, get moved twice, get mixed up and get damaged.
reduce — without missing delivery dates
How to reduce WIP without missing delivery dates.
- 1
See it first. Count every open job and note which stage it's at and since when. Most owners are surprised by the number and by the oldest job.
- 2
Find the bottleneck. One machine, process or person sets the pace for everything. WIP piles up in front of it. Read more about the wandering bottleneck.
- 3
Release work at the bottleneck's pace. Starting a job early doesn't finish it early. It just adds to the queue. Release new jobs only as fast as the bottleneck can take them.
- 4
Finish before you start. Agree one priority order, by promised date, and work to it. Pulling a job forward for one customer pushes others back.
- 5
Watch the outside processes. Jobs sent out for plating, heat treatment or grinding often become the oldest WIP, because nobody owns the follow-up. Give every outgoing job an owner and a promised return date.
- 6
Make smaller batches where setups allow. A batch of 500 sits as WIP until the last piece is done. Where setup time is short, smaller batches move faster.
track — from a whiteboard to one place for every job
How to track WIP.
Start simple. Each step up answers “where's that job?” faster, with fewer phone calls.
Start
A whiteboard or a register
Free and visible. Works for a handful of jobs, but nobody outside the room can see it, and it's only as current as the last person who updated it.
Next
An Excel or Google sheet
One row per job, one column per stage, with the date it entered each stage. Sort by age and the stuck jobs show up immediately.
Then
Barcoded job cards
A barcode on every job card, scanned at each stage, keeps the sheet current without retyping. Our free barcode generator prints the labels from your list.
Open the barcode generator →Later
Shop-floor software or a custom system
When updates arrive by WhatsApp, phone and paper, the real status of a job is scattered. A system that brings it into one place answers “where's job 1142?” without a single phone call.
Which WIP software is best? →questions — and where's job 1142?
“Where's job 1142?”
In most small and medium manufacturers, the honest answer is a phone call. The job's status lives in a WhatsApp message, an Excel sheet, a job card on a trolley and a supervisor's memory.
We build custom systems that bring it into one place, so every job's stage, owner and age is visible without asking. A person stays in charge of every decision, and your team uses it through Youno, a work chat app as simple as WhatsApp.
Book a callWhat is the full form of WIP?
WIP stands for work in progress, sometimes written work in process. In manufacturing, it means goods that have been started but aren't finished yet.
What is work in progress called in Hindi?
In manufacturing and in the accounts, work in progress is अर्ध-निर्मित माल (ardh-nirmit maal), meaning half-made goods. On a sign, “work in progress” is written यहाँ कार्य प्रगति पर है (work is in progress here).
What is work in progress called in Marathi?
In manufacturing and in the accounts, work in progress is अर्धवट तयार माल (ardhavat tayaar maal), meaning half-ready goods. On a sign, it's written येथे काम सुरू आहे (work is going on here).
What is work in progress called in Gujarati?
On the shop floor, work in progress is અર્ધ-તૈયાર માલ (ardh-taiyaar maal), meaning half-ready goods. In the accounts, it's ચાલુ પ્રક્રિયા હેઠળનો માલ (WIP). On a sign, it's written અહીં કામ ચાલુ છે (work is going on here).
Is it work in progress or work in process?
Both are used and usually mean the same thing. Some accountants use “work in process” for short manufacturing cycles and “work in progress” for long projects such as construction, but on a shop floor the two are interchangeable.
Where does WIP appear in the balance sheet?
Under current assets, as part of inventories. In India, Schedule III of the Companies Act lists work-in-progress as its own line under inventories, and Ind AS 2 values it at the lower of cost and net realisable value. Check the treatment for your company with your CA.
Is WIP an asset?
Yes, a current asset. But it's an asset you can't sell or invoice until the work is finished, which is why too much of it squeezes your cash.
What's the difference between WIP, raw material and finished goods?
Raw material hasn't been started. WIP has been started but isn't finished. Finished goods are complete and waiting to be dispatched or sold. Together, the three make up your inventory.
What is a good level of WIP?
There's no universal number. The right level is just enough to keep your bottleneck busy without gaps. Anything beyond that adds waiting time and ties up cash without adding output.
Does material sent to a job worker count as WIP?
Yes, it's still your work in progress while it's at the job worker's. Under GST, inputs sent to a job worker are generally expected back within a year, so long-forgotten job-work challans are both a WIP problem and a tax one. Confirm the rules for your case with your CA.