Purpose: This paper aims to explore methodological and institutional challenges on application of the work-process analysis approach in the design and development of competence-based occupational standards for Lithuania. Design/methodology/approach: The theoretical analysis is based on the review of scientific literature and the analysis of documents and methodical instruments (curricula and occupational standards). Empirical research is based on the observation and analysis of the processes of designing work-process-based occupational standards for Lithuania, including the face-to-face interviews with involved work-process experts on the shop-floor and stakeholders. Findings: The application of a work-process-based approach in designing sectoral occupational standards enhances comprehensive and systemic design of qualifications. Work-process analysis approach helps to focus on the holistic concept of competence by considering different dimensions of work-processes. However, design and implementation of work-process-based occupational standards for the transitional and predominantly school-based vocational education and training (VET) systems encounter multiple methodological and institutional challenges. Research limitations/implications: The findings of research are based on the analysis and evaluation of the design of sectoral-occupational standards in the beginning and middle stages of this process. These findings can help to draw the assumptions about potential implications of implementation of these standards to the development of competence-based VET but are not sufficient to provide comprehensive and detailed forecasts. Originality/value: The paper explores and evaluates an application of the innovative work process approach in the design and development of qualifications for the concrete country.