Walk into most small Indian factories and ask: "How many units are on the shop floor right now?" The answer is usually a rough estimate, a call to the production supervisor, or a look at a notebook that may or may not be up to date.

WIP inventory — materials that have left your raw material store but haven't become finished goods yet — is the least-tracked asset in most factories. And that invisibility is expensive.

What Is WIP Inventory?

Work-in-Progress (WIP) inventory is material that has entered the production process but hasn't become a finished, sellable product yet.

In a garment factory: fabric that's been cut but not stitched, stitched but not finished, finished but not packed. In a food factory: ingredients weighed and mixed but not yet cooked, cooked but not yet packaged. In an auto components factory: castings that have been machined but not yet assembled, sub-assemblies waiting for final assembly.

At any given moment, your WIP represents capital tied up in partially completed goods, production orders in flight, and commitments you've made to customers.

Why WIP Goes Untracked

Most small manufacturers don't track WIP because it's always moving (unlike finished goods in a warehouse), because it doesn't feel as "real" as finished goods for accounting, because Tally has no concept of production stages, and because no one clearly owns it — raw materials are the store's responsibility, finished goods are dispatch's, and WIP falls in the middle.

The result: production managers chase status over WhatsApp. Customers asking "where's my order?" get "let me check" every time.

The Cost of Not Tracking WIP

You can't promise accurate delivery dates. If you don't know where in production an order is, any delivery estimate is a guess.

Bottlenecks stay hidden. If you can't see that 80% of WIP is always stuck in the finishing stage, you can't fix it.

Inventory records drift. Raw materials leave the store based on production orders. If WIP movement isn't tracked, your inventory reports will overstate raw materials and understate WIP — and finished goods counts will be wrong.

Losses are discovered late. Rejection, damage, or pilferage during production only surfaces when you do a physical count — not in real time.

How to Track WIP: Four Approaches

Approach 1: Physical Board or Register (No Tech)

The simplest starting point: a whiteboard or register at each production stage. Every production order gets a card or row. As it moves through cutting → stitching → finishing → QC → packing, someone updates the stage.

This works for factories with a single production line, fewer than 20 active orders at a time, and supervisors who consistently update it. It breaks down when multiple orders run simultaneously, orders are split across machines, or supervisors forget to update.

Approach 2: Daily WIP Report (Excel)

The production supervisor fills in a daily WIP sheet with the production order number, product, quantity in each stage (cutting, stitching, finishing, QC, packing), and expected completion date. This gives you a daily snapshot — not real-time, but far better than nothing.

Approach 3: Barcode or QR Code at Each Stage

Print a QR code for each production batch. At each stage, the supervisor scans the batch QR when work starts and when it finishes. A simple app or Google Form can log these and give you timestamps at each stage — which lets you calculate how long orders spend at each stage and identify bottlenecks.

Approach 4: Shop Floor Module in Manufacturing Software

A dedicated shop floor tracking system where each production order is created digitally, supervisors update stage in real time from a mobile or desktop screen, and a dashboard shows all active orders and their current stage with alerts when orders are delayed. This is the most reliable approach for factories with more than 5–10 simultaneous orders.

What to Track at Each WIP Stage

For every production order at every stage, the most important things to capture are the quantity entering the stage, the quantity completing the stage, the quantity rejected or scrapped, and the time it entered the stage.

Start with just quantity in and quantity out. Add timestamps and operator data once the basic flow is working.

WIP Valuation: Keeping the Numbers Right

For balance sheet purposes, WIP must be valued. A simple method for most small manufacturers: WIP value = raw materials consumed for those orders. A more accurate version adds direct labour cost (wages per day × days in production for that order).

If your ERP or production software tracks BOMs and production orders, WIP valuation is calculated automatically based on materials consumed and production completion percentage.

Reducing WIP: The Operational Goal

High WIP is usually a sign of a bottleneck in one stage where work piles up, large batch sizes where items wait in queue, quality issues where rework adds to WIP, or poor scheduling where orders start before prerequisites are ready.

Tracking WIP is the first step. Once you can see where WIP accumulates, you can fix the underlying cause.

WIP Tracking in FactoStack

FactoStack's shop floor module treats each production order as a live entity with stage-wise tracking. Create a production order and it appears on the shop floor kanban. Supervisors update status at each stage. The dashboard shows all active orders, their stage, and time in current stage.

Raw material deductions happen when the production order closes — so inventory stays accurate without manual adjustment.

Shop Floor Tracking

See every production order on a live kanban, track stage-wise WIP in real time, and let supervisors update job card status from the shop floor.

See how it works →Book a demo

How to Track Work-in-Progress (WIP) Inventory in a Small Factory