Work In Process WIP Definition. How to Calculate it Correctly.

In this article, you will learn what is work in process WIP  and how to estimate it according to lean manufacturing techniques.

Work In Process WIP Definition

Work in process is all the work that is actively being partially done at any one time.

It is a metric that describes the amount of partially finished goods awaiting completion and eventual sale or the value of these items.

In addition, it includes partial products that are either just being fabricated or waiting for further processing in a queue or a buffer storage.

Moreover, the Work-in-process is a term used in production and supply chain management when you are implementing lean manufacturing.

The work-in-process WIP considers the components, raw materials, labor, and overhead costs incurred for products that are at various stages of the production process.

Also, it is considered as a component of the inventory asset account on the balance sheet.

These inventory asset accounts are subsequently transferred to the finished goods account and eventually to the cost of sales.

Part of the inventory is categorized as WIP when it has been mixed with human labor but has not reached final goods status; only some but not all necessary labor has been added to the product.

Work in process is the total amount of work you have committed to but have not completed at any one time.

How to Calculate Work In Process WIP.

Any raw material inventory that has been combined with human labor but is not yet finished goods inventory must be considered in ending work in process inventory formula.

Therefore, the formula to calculate the Work in Process (WIP) is:

Ending WIP Inventory = Beginning WIP Inventory + Manufacturing Costs – Cost of Finished Goods

CIQA is a quality and regulatory consultant with 25 years of experience developing products and managing projects in the medical device supply chain, and pharmaceutical industries. Rest assured of the safety or being in the right hands.

Our Lean Manufacturing team could provide you a broad range of professional expertise implementing these techniques and tools.

SUBSCRIBE AND FOLLOW US TO LEARN MORE.

For more details about Work In Process, follow us.

Three (3) Options to Create Document Control Management DCM Procedures:

Bronze Option. You Can Create Your Own Quality Procedures, using a Template.

You can download samples of the Document Control Management DCM procedure templates in .pdf format. 

To see the complete list of the most popular quality procedures templates, click here.

In addition, you can request a quotation to buy online a full SOP template document in MS Word format that is completely editable, ready to fill, and adapt to your specific needs.

Silver Option. We Can Bring You Formal Training about Work In Process.

This option is recommended if you want to learn more about how to build robust quality system procedures. One of our expert(s) can provide online step-by-step training to your team (unlimited assistance) on how to build reliable SOPs using our template(s). Also, you can improve your corporate quality procedures and policies by incorporating our template(s) and tools.  It includes a fully editable template from the Bronze option, plus training, exams, and a training certificate for each assistant.  Request a quote now.

Gold Option. We Can Create Customized Quality Procedures.

One of our expert(s) will create and prepare your customized SOPs with the inputs and specific information of your company. It includes a fully editable template from the Bronze option, plus online support in document creation, implementation, and training. Request a quote online.

Get in compliance today, CONTACT US (Hablamos Español)

REFERENCES: Work In Process.

httpss://en.wikipedia.org/wiki/Lean_Six_Sigma

httpss://www.greycampus.com/blog/quality-management/a-brief-introduction-to-lean-and-six-sigma-and-lean-six-sigma

httpss://www.investopedia.com/terms/w/workinprogress.asp

httpss://en.wikipedia.org/wiki/Work_in_process