WIP series: Episode 1 - A Guide to WIP Limits


Ramyaa Seetharaman





Read Time

10 mins

The idea of work-in-progress, or WIP, limits originated from the Toyota Production System and Lean Manufacturing. Taiichi Ohno, the mastermind behind the Toyota Production System, introduced WIP limits as a solution to increase productivity and reduce waste. Since its inception, WIP limits have been widely adopted in various industries, such as software development, construction, and manufacturing.

WIP limits are a critical component of project management that restricts the amount of work in progress at any given moment. It helps prevent team overload and ensures efficient and effective completion of work. Let's say a team is building ten houses, working on all ten simultaneously would put too much pressure on them, and they might not make any significant progress. Instead, the team could limit their work-in-progress to three houses at a time, focusing all their efforts on these three until they're done, and then moving on to the next set of three. By doing so, the team can maintain steady progress.

WIP limits are intended to improve productivity, reduce waste, and increase efficiency in the work process. These constraints provide several advantages to teams and organizations. WIP limits ensure that the team is not overburdened, lowering the risk of burnout, and improving work quality. The team can focus on the most important tasks, reducing distractions and increasing overall productivity. Reduces the amount of time it takes to complete each task and improves overall lead time and delivery timelines. Reduces waste and boosts overall efficiency by reducing the amount of work that is abandoned or discarded. Lowers the risk of idle time, and enhancing resource utilization, WIP limits ensure that resources are used effectively and efficiently. Offers clear visibility into work in progress, making it simpler to spot bottlenecks, monitor development, and prioritize tasks. Encourages teams to collaborate and share resources and improves overall teamwork and communication.

Setting WIP limits for a team is a straightforward process with just four steps. Firstly, we determine the team's capacity by considering the number of team members, the level of complexity of the work, and the time needed to complete each task. This allows us to calculate the maximum amount of work the team is capable of handling. Based on that, we establish the WIP limit - the maximum number of tasks or projects the team can work on at once. Communication is key, and we make sure to inform the team and any stakeholders of the limit to ensure everyone is on the same page. Lastly, the WIP limit may need to be adjusted as the team's capacity or work evolves, and regular review helps us evaluate the team's resource utilization and potential to take on additional work.

For example, consider a software development team working on multiple projects. The team consists of 10 developers, and each project takes an average of 2 weeks to complete. Based on this information, the team can handle a maximum of five projects at any given time. Therefore, the team could set a WIP limit of five projects. If one project is completed, another project can be added to the work queue, ensuring the team is always working within their capacity.

When it comes to mastering the implementation of WIP limits, Amazon is a prime example of success. Embodying its lean management philosophy, Amazon's use of WIP limits has fueled productivity and eliminated waste. Here's how they did it: Amazon standardized its warehouse and distribution center operations to ensure a seamless, reliable, and efficient flow of goods. This paved the way for setting solid WIP limits. The company established WIP limits at each stage of the process, preventing bottlenecks and delays by only starting work that could be completed within the specified timeframe. Amazon's workers can quickly tell when a WIP limit is reached thanks to visual management tools such as cues and signals, allowing them to complete work efficiently.

By utilizing real-time monitoring systems to track merchandise movement and identify any WIP limit breaches, Amazon was able to tackle issues promptly and make necessary adjustments. The company constantly improves its processes using data from the monitoring systems, making it easier to identify areas where WIP limits could be raised, ultimately meeting delivery goals and reducing waste. Thanks to WIP limits, Amazon operates more efficiently, generates less waste, and delivers packages to customers faster. This has given them a competitive edge and led to their growth as one of the world's largest online retailers. 

So, in conclusion, WIP limits bring a lot of benefits to teams and organizations. By limiting the amount of work in progress, we can see improvements in quality, faster delivery, better use of resources, increased visibility, stronger collaboration, and less waste. Real-world examples abound, so you don't have to take my word for it. Embrace the power of WIP Limits and watch your work soar to new heights!