First, I wanted to say thanks for this thread. I'm a new DF player (and this is my first forum post), so I didn't realise that the work orders were new. They are so awesome that I was wondering why there was little discussion about them on the wiki.
I've been playing around with these and have discovered that you can very nearly implement a full on kanban system. For those who don't know, kanban is a "just in time manufacturing" system that is meant to "pull" production through the system. The idea is that you maintain certain inventory levels and when the inventory drops below a certain threshold, you order the upstream workshop to produce enough to fill the void. This, in turn, depletes *their* inventory levels which causes them to order their upstream workshop to produce inputs. As you can see, there is a ripple effect and an order at the far end causes production at the front end. You can maintain inventory all the way along the production to smooth out delays in production.
The word "kanban" is just the japanese word for "sign board". The way it is implemented in real life is that each workshop has a bin. When you want to order parts from the upstream workshop, you write the order on a sign board (often a chalk board) and wheel the cart over. The receiving workshop fulfils the order, puts it in the kart and wheels it back to the ordering workshop (along with the signboard). This might be looking somewhat familiar.
There are some very interesting things about kanban workflow and inventory levels that are modelled very well with the DF work order system. Normally in a kanban system, you can dial the "responsiveness" of the system by "limiting the work in progress". This basically means limiting the number of things your are ordering. Often in a kanban system, the number of parts you order is known as the "kanban for the order". So if you order 5 parts, then the kanban is 5. You can see that the number of items you build in your work order is directly analagous to the kanban. If I order 5 lye, then the kanban for the lye order is 5. Smaller kanbans mean that you can respond quickly since your workshop isn't monopolised by a big order. However there is an inefficiency for ordering (it takes time to process the order), so you have to balance that when you have high demand. In DF terms, work orders are scheduled every day and filled based on the priority of the order, so if there are things that you know you need to keep filled up all the time (like charcoal if you don't have magma), then you should maintain a high kanban.
In a kanban system each workshop has both an input inventory (stockpile) and an output inventory (stockpile). Input inventories give to the workshop and output inventories take from the work shop. Another important issue with stockpiles is modelled very well in DF. Some stockpiles "want to be full" while other stockpiles "want to be empty". An output stockpile wants to be empty and it should give its output to one or more other stockpiles. An input stockpile wants to be full and it should take from one or more other stockpiles. In this way you always have someplace to put finished parts and you always have the parts you need to do work.
Understanding the level of inventory you want in each stockpile is critical. I've been realising that using this method you can get by with ridiculously small inventory levels. Normally I make 5x5 workshop rooms. Since the workshop is 3x3, it gives me 16 squares (or 15 squares plus a wheelbarrel) for an input inventory. You can use the workshop itself for the output inventory and the only other thing you need are distribution stockpiles for certain situations like the output of a farm. You should then use the 'p'roduct condition for the work order to maintain the output inventory level. If it's going directly to another input stockpile, then the inventory level should be 16 - the work order size (kanban size) so that you don't over produce. For many things, it's perfectly fine to have an output inventory size of 2-3. For example, you will never use more than 3 lye at a time probably, so there is no point in making more. Also keep in mind that production takes time, so there is usually no point in maintaining an inventory level greater than 1 day of production in the next stage (unless you just want to smooth over labour shortages).
Probably nobody has read this far, but I will finish off with one more thing. Most work orders can specify details. It is important to 'q' up the work order, then press 'd' to specify the details, *then* add conditions. This will make your conditions use the correct details without having to search for them. One of the insights I had recently is that it is best to concentrate on a single type of input. For example, when making bags you should *always* make pig tail bags. This allows you to use "empty pig tail bags" as the input condition for other work orders (instead of "bags and boxes"). Similarly, *always* make rope reed shoes, silk socks, etc, etc. This is also true for things like rock pots so that you don't accidentally make a whole whack of marble rock pots.
Finally, only use bins and barrels for very specific circumstances for inputs. The more specific rule is this: if you want to sort/segregate things, never put it in a bin or a barrel. If you want to sort/segregate only one type of something, never put any of the other types in bins and barrels. Because you will end up with many, many specific stockpiles as long as you never overlap you can get away with putting charcoal and chert blocks in bins, but not marble blocks for instance. But it means you can never have an unsegregated stockpile (which is actually fine). But mostly you do not need bins or barrels because the Just In Time manufacturing process means you can have really small inventory levels.