What does it mean?
And why is WIP management important?
WIP management is a derivative of good project management and it’s also a belief system.
There are basically two components of WIP – labor and equipment. You also have your projected and your actuals. This is the highest level of information.
“When I look at WIP, I’m looking at the costs on a daily basis, and seeing what has changed on a month-to-month basis,” says Indawala “That’s me looking in the rear-view mirror. It allows me to see where the project is currently sitting, what did it look like last month, and what are the deviations? In other words, what are the deltas that I need to manage and are they within the acceptable norm?”
Most importantly, what are your projects going to look like in the future? Because what has already happened becomes lessons learned. But when you are managing projects effectively, you are looking at what is going to happen in the future in terms of equipment costing and labor scheduling. Now you’re able to look at next week or next month and ask, what is my WIP going to look like?
And that’s essentially why WIP management is important.
I find that in the integration industry, people are always looking at WIP as point in time in the past, and they never seem to manage projects in the future. This is how you get surprises. A project that you quote at 23% ends up at 18% and you lose all of that gross profit, because you’re not managing projects from a future perspective.
Let’s go back to when we were kids, when we were on a drive with our parents.
I never remember asking my dad, “Dad, how long have we been driving?”
But I definitely remember asking him, “When will we get there?”
And then five minutes later, “When will we get there?”
It’s interesting that so many integrators ask in their projects, “How long have we been driving?” And yet the real purpose of WIP management is “When will we get there?”
It’s shifting your mindset to understand that integrators can manage the future.
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