By definition work in progress is something that’s still in the progress of being finished. It’s no longer raw material and not just yet finished product either. In your accounting you’d refer “work-in-progress” to materials within the production process and partly finished products (i.e. components of finished products). Note that components may be part of some other components that are just another stage of the work-in-progress and not yet finished goods. 

If you think about the cycle of production, it starts with the materials (separate line within inventory, normally with it’s own accounting treatment for determining cost for an example), materials then move to production, that is “work-in-progress” (again with it’s own accounting treatment for cost for an example) and the final stage would be finished goods (separate line within inventory). As a minimum, if you’re producing and at the period end date you still have unfinished goods held in production, you have 3 separate groups of inventory – materials, work-in-progress and finished goods.

With work-in-progress you can see how many of your company’s materials you’ve actually used up in your production (yet to be finalized into finished goods). In that sense it is good for seeing where you are with your production.

When we talk about running your business smart, you’d want to keep your work-in-progress lower to reduce the risk of obsolescence and reducing the capital tied up in the production process. If you think smart, in case of need, materials are far easier to sell than work-in-progress. However, obviously you should focus on optimizing your whole inventory levels since it’s essentially money tied up.  There’s only so much that you need and you just need to understand how much it is.