Issues in Tracking Work-in-Process

Issues in Tracking Work-in-Process by Dr. Peter Green of BellHawk Systems Corporation 


Introduction
Tracking Work-in Process (WIP) in a manufacturing, test or repair process is conceptually simple but there are a number of issues to consider as we discuss in this white paper.

Work-in-process-Bellhawk

Discussion
A manufacturing order or job consists of a route of operation steps. Raw material is scanned into the first and maybe subsequent operation steps. WIP is scanned as material-out from the first step and into the second, and so forth, until we have a finished product, which is scanned out of the last step. Somewhere along the way we may have scrap and need to record the labor and possibly machine time in processing the materials.

At its simplest, we can create a new part number, for each WIP material. This material is produced as WIP by one step and consumed as WIP in the next.


For some products, this works very well, as the intermediate product may be very different from the finished product. For example we may mix up a vat of energy drink and give it one part number and then give a different part number to the finished bottles of energy drink. In fact these two operations are often split into completely separate jobs, with one job producing an intermediate material, which appears in regular inventory, and another job that consumes all or part of the intermediate material.bellhawk-systems


But if the organization has a large number of products and many steps in the manufacturing process then this can quickly leads to an unmanageable proliferation of part numbers, with the need to create a new part number for each intermediate material in a multi-step process.

Typically, in this case, the first step creates a product that looks similar to the finished product and then subsequent steps are testing or modifying the product. In BellHawk, the finished goods part number can be used for the WIP part number but the intermediate materials are tagged as WIP when they are recorded out from a job step. A record of the job and operation they came from is also tracked. In BellHawk these materials are excluded from the inventory of finished products but are visible as WIP inventory.

This avoids the problem of creating many part numbers for WIP, as only an item master part number for each finished product need be assigned.

Normally WIP is recorded out of one operation into a reusable barcoded tote and becomes part of WIP inventory. It is then is consumed as material-in to the next step from the tote. In this way production supervisors can see the flow of WIP material in real-time between job steps and make sure that all the WIP for a job has been processed. This method does not require the whole batch to be processed lock-step between job steps, as the incremental flow of material can be recorded and monitored.

There are two special cases:
        1. Assembled products, where a serial number and tracking barcode is assigned at the beginning of the manufacturing process and parts are steadily added to the finished assembly in a sequence of operations.
        2. Testing and repairing of products that have serial numbers and tracking barcodes.

In both these cases, the WIP is not consumed on input to the next job step nor is a new WIP product entered into inventory as it is recorded out from a job step.

BellHawk recognizes these two special cases by capturing the tracking barcode at the beginning of the process and then simply tracking the movement of the item being assembled or tested into and out of each operation. Along the way raw materials may be consumed in the job step and components may be recorded as scrapped and replaced.

Intermediate forms of an assembled product are still tagged as WIP inventory, so they don’t get confused with finished goods inventory. The same applies to products being repaired. The big difference from regular WIP is that the tracking barcode on the WIP container stays the same from start to finish rather than the WIP being in a different barcoded tote at each stage of production.

Scrap is an interesting form of work in process. In many cases the scrap has value as a recyclable material, such as scrap metal, plastic or paper. Sometimes it is beneficial to record the quantity of this scrap and to give it a special part number so it can be tracked in inventory. If it is not recycled, normal wastage in an operation is not typically recorded as scrap material out from an operation but is simply included in the ratio of output WIP or finished products to input materials to the operation.

Conclusion
With a system like BellHawk tracking WIP can be very straight forward provided that the method and part numbering scheme are appropriate to the manufacturing, test or repair process being used. Also, by keeping WIP inventory separate from regular inventory, a proliferation of part numbers can be avoided.


Author
Dr. Peter Green is the President and CTO of BellHawk Systems Corporation which provides software for real-time inventory and production tracking for manufacturers and food processors. Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information or assistance with your WIP tracking problem.

© BellHawk Systems Corporation

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