Work in process

Raw parts get cut, components get prepared, paperwork travels with them, and then the jobs reach the area before the bottleneck and wait.

That growing pile is work in progress, WIP.

It represents labor, material, and time already committed, but it doesn't represent a finished order that can ship.

And when too much WIP sits in front of the constraint, people lose sight of what should run next.

The queue starts to become its own planning system.

A supervisor walks past and sees an urgent job near the back.

That's why high utilization at every resource can be a trap.

A non-bottleneck machine can run at full speed all day and still hurt total flow if it feeds work faster than the constraint can absorb it.

Cycle time, changeover time, uptime, and first pass yield all matter because rework sends work through a different path and changes demand on the same resources.

Work in process, WIP, matters for the same reason.

It's not just inventory sitting on a report.

WIP describes work that has entered the flow but hasn't reached the customer.

It can point to a queue, a blocked handoff, an unplanned hold, or an upstream release rule that no longer fits the capacity downstream.

Still, the numbers don't explain the full process by themselves.

In stark contrast, a Pull system, which is the heart of Kanban, means new work is only pulled into the workflow when there is available capacity.

The mechanism that makes this possible and a favorite topic for exam questions is the work in progress or WIP limit.

A WIP limit is a hard cap on the number of tasks allowed in a specific column or stage of the workflow at any one time.

For example, imagine a Kanban board with columns for to-do, in-development, and testing.

If the in-development column has a WIP limit of three, the team is not allowed to start a fourth task, no matter how urgent it seems, until one of the current three tasks is moved to the next column, testing.

This creates a pull signal.

The empty slot in In Development pulls a task from the To Do column.

This signals a bottleneck.

Now, the little thing in there that you need to be sure that you do is if you're aware of changes in costs, then you need to go back in and modify your estimate so that you're continually checking against your revised estimate as you move forward.

And that adjustment we call the work in progress, the WIP adjustment.

No, actually, we would be adjusting your estimate So that when you're looking at your estimated costs, your adjusted estimated costs and actual costs, that we keep that proportional throughout the life of the job.

Now, when you adjust the income up or down, you're right.

Then it goes into an account, two accounts actually, on the balance sheet.

We don't normally like to use the term work in process because that's a little more for spec home builders, custom home builders, and so on.

That's WIP.

Okay, but WIP is a broader term.

It's just that simple.

Now, setting WIP limits.

Let's talk about WIP limits.

They're very, very important.

What we do is for each one of these states, we will set a work in progress limit, and what that means is that the team agrees that they won't take on more than that number of items in a particular state, and that forces them to make some decisions.

Let's say that we're in the prep state and we've got our WIP limit of, say, three.

We get three items and we finish them, right? But we have no place to move them because the in progress state is already filled.

So what do we do? It forces us to make a decision.

Then it will be like, "See, uh, it is in progress, but it is a little bit blocked." Uh, so then we can introduce a column of blocked, but, uh, so we have a certain approach like, uh, in Scrum and Scrum Board where, like, uh, we cannot keep more, uh, uh, options, uh, for the, you know, states.

So what we wanted to change is, like, inst- uh, the Kanban Board approach is mainly using WIP limit.

Yeah? So the WIP limit, which helped the developers to not context switch.

That was the main, uh, thing that, uh, Kanban board helped the team members.

So, so you're, you're saying that with the help of the Kanban board, you were able to visualize the-

So that, uh, really helped the team.

Uh, though, uh, no, not to sc- uh, switch, uh, different topics.

And also when they complete the task and they take another task, yeah? And also, uh, even, uh, in progress state with the WIP limit, not more than the agreed WIP limit.