WIP Lives in Neither the Ledger Nor the Warehouse
Raw materials show up in ERP material inventory, and finished goods show up in warehouse stock. But what about the 300 stamped parts waiting for welding? In most plants, inter-process work-in-process (WIP) is a blind spot that no department's records capture accurately. The shop floor calls it "production's stuff," yet almost nobody knows its quantity and location in real time.
Little's Law (WIP = throughput × lead time) explains why too much WIP hurts. If a line processes 200 units a day and has 2,000 units of WIP, average lead time is 10 days. Keep throughput the same, cut WIP to 800, and lead time drops to 4 days. Piled-up WIP also means defects are found late and reworked in bulk, and the material cost tied up in it squeezes cash flow.
To Capture WIP, Record the Moves
Production output alone won't tell you how much WIP you have. Your MES needs to record four distinct events:
The time between completion and consumption is how long WIP sat waiting. Track loads at the pallet, cart, or box level with barcodes or RFID tags. When one pallet is split across two machines, create child units linked to the parent (split). When small remainders are combined, preserve every source lot's history (merge) so quality traceability stays intact.
Designing the WIP Location and Status Model
WIP needs a status, not just a location:
Define a staging location for each operation and set a maximum allowable WIP per location. If the pre-welding area is capped at six pallets, any area over its limit stands out immediately on screen.
Controlling Flow with WIP Caps
A WIP cap only works if it blocks releases instead of just raising warnings. When downstream WIP exceeds the cap, the MES should hold the start of upstream work orders or require supervisor approval.
Month-End WIP Counts and Cost Reconciliation
WIP is valued by degree of completion. A common approach treats material cost as fully added at the start of the process and conversion cost as added in proportion to progress. With 1,000 units of WIP, a unit material cost of ₩5,000, conversion cost of ₩3,000, and 50% completion, WIP value is ₩5.0 million + ₩1.5 million = ₩6.5 million. If the MES passes WIP quantities by operation, the ERP can run this calculation automatically.
Count discrepancies usually come from three sources:
Logging a reason code for each discrepancy type tells you which operation to fix first next month.
Rollout Sequence and How POLYGLOTSOFT Can Help
Rather than covering the whole plant at once, start with the zones just before and after your bottleneck. Record move events for one to two months to see your real WIP levels, then set caps, and only then extend to release control and ERP cost integration.
POLYGLOTSOFT supports the full scope of smart factory WIP management: MES move-event design, barcode and RFID identification, cap-based release control, and ERP cost integration. If you want the WIP sitting between your processes to become data you can manage, get in touch with us anytime.