There are two important reasons why product developers are blind to DIP. First, inventory is financially invisible in product development. We do not carry partially completed designs as assets on our balance sheet; we expense R&D costs as they are incurred. If we ask the chief financial officer how much inventory we have in product development, the answer will be, “Zero.” Second, we are blind to product development inventory because it is usually physically invisible. DIP is information, not physical objects. We do not see piles of DIP when we walk through the engineering department. In product development, our inventory is bits on a disk drive, and we have very big disk drives in product development.
Donald G Reinertsen in The Principles of Product Development Flow