A manufacturer's inventory is not just raw components and finished goods. In between is work in progress: production that has been started but is not yet finished. This piece is about managing work-in-progress inventory in Odoo.
What work in progress is
Work in progress, often shortened to WIP, is production that is part-done: components have been issued and some work has been carried out, but the finished product is not yet complete. At any moment, a manufacturer with production running has work in progress, manufacturing orders underway, partly built. Work in progress is a real and distinct part of inventory: it is not raw components any more, because work has been done and value added, and it is not finished goods yet, because production is not complete. It is its own category, between the two.
Why work in progress matters
Work in progress matters for a few reasons. It represents value: components have been consumed into it, and work has been done on it, so work in progress has a cost, it is the manufacturer's money and effort, tied up in production that is not yet complete. It is part of the inventory picture: a manufacturer that accounts for only its components and finished goods, and ignores work in progress, has an incomplete picture of where its inventory and its value sit. And it affects financial accuracy: at any point, and especially at a period end, the value tied up in work in progress is part of what the business is worth, and it has to be accounted for properly. Managing work in progress is making sure this in-between inventory is recognised, valued, and not lost sight of.
How work in progress arises in Odoo
In Odoo, work in progress arises naturally from how manufacturing orders work. When a manufacturing order is started, components are consumed into it, and the order is in progress, not yet complete. The value of the consumed components, plus the work done so far, is, in substance, work in progress. Because Odoo runs manufacturing in the connected system, this in-progress state is tracked: the manufacturing order has its status, the components consumed are recorded, the production is visible as underway. The work-in-progress inventory is not an untracked mystery; it is the set of manufacturing orders that are in progress, with their consumed components and their partial completion.
Managing work in progress: visibility and control
Managing work in progress well is, first, a matter of visibility: knowing what is in progress, how much, at what stage. A manufacturer should be able to see its work in progress, the manufacturing orders underway, rather than having a blind spot where production-in-flight sits. Odoo's visibility of manufacturing orders and production gives that. Second, it is a matter of control: work in progress should be a deliberate, sensible amount, not an uncontrolled accumulation. A manufacturer with a large, growing pile of work in progress, many orders started and not finished, has a problem: value is tied up, the floor is cluttered, and orders are not flowing through to completion. Managing work in progress includes watching that it does not balloon, and keeping production flowing so that what is started gets finished.
Work in progress and its value
The financial side of managing work in progress is making sure its value is recognised. Work in progress has a cost, and that cost is part of the manufacturer's inventory value. Because Odoo runs manufacturing and accounting in the connected system, and with real-time inventory valuation, the value tied up in production is reflected in the accounts as production happens, rather than being a gap that has to be reconstructed. Managing work in progress in a connected system means its value is part of the continuous, accurate financial picture, which is one of the things that makes month-end manageable for a manufacturer.
The takeaway
Work-in-progress inventory is production that is part-done, between raw components and finished goods, and it matters because it represents value tied up, it is part of the inventory picture, and it affects financial accuracy. In Odoo, work in progress arises from manufacturing orders that are in progress, and it is tracked in the connected system. Managing it means keeping it visible, knowing what is underway, keeping it controlled so it does not balloon, and ensuring its value is properly recognised, which the connected system supports. For how we approach Odoo for manufacturers, see our manufacturing work.