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Work in Progress

WIP

Partially completed goods that are still in the production process, representing materials that have entered manufacturing but are not yet finished products. WIP is tracked as a current asset on the balance sheet and includes the costs of raw materials, labor, and overhead invested in unfinished items.

RELATED TERMS

Throughput

The rate at which a manufacturing system produces finished goods, typically measured as units per hour or per shift. Throughput is determined by the system's bottleneck operation and represents the actual productive output that generates revenue.

Cycle Time

The total elapsed time required to complete one unit or one cycle of a production process from start to finish. Cycle time includes processing time, wait time, and move time, and is a critical metric for capacity planning, scheduling, and identifying improvement opportunities.

Lean Manufacturing

A systematic approach to manufacturing derived from the Toyota Production System that focuses on eliminating waste while delivering value to customers. Lean identifies seven types of waste (overproduction, waiting, transport, overprocessing, inventory, motion, and defects) and uses tools like value stream mapping, 5S, and kanban to continuously improve processes.

Kanban

A visual scheduling system developed as part of the Toyota Production System that uses cards or signals to trigger production and material movement based on actual consumption. Kanban implements pull-based manufacturing, where downstream processes request only what they need, reducing overproduction and work-in-progress inventory.

Bottleneck

The operation or resource in a production process that limits overall system throughput because it has the lowest capacity or longest cycle time. Identifying and managing bottlenecks is critical because improving non-bottleneck operations does not increase total system output.