Meaning
Production floor metrics track the volume of materials that have exited the warehouse but have not yet reached the final inspection stage. Inside a factory, industrial work in process represents the capital tied up in items that are undergoing machining, assembly or cooling. The boundary of this inventory category is the point where a raw component receives its first value added transformation.
Cycle Velocity
Monitoring the time a unit spends in this state reveals bottlenecks that slow down the overall delivery schedule. Excessive accumulation of industrial work in process indicates a mismatch between the speeds of different workstations on the line. When the flow is unbalanced, the cost of holding partially finished goods reduces the overall profitability of the plant.
Defect Masking
High levels of uncompleted inventory often hide quality issues that only become apparent during the final testing phase. If a defect occurs at the start of the line, a large volume of industrial work in process means hundreds of units might be ruined before the error is caught. Reducing this buffer forces problems to the surface where they can be corrected immediately.
Production Readiness
Transitioning from a prototype to a demonstrated rate requires a stable and predictable level of activity on the floor. An entry that fails to account for the build up of these units will overstate the initial yield of a new manufacturing process. Managing this flow is a prerequisite for achieving the throughput targets required for a successful production launch.
