can we generate auto invoice when item shippement status is shipped by workflow
Yes this is possible. Here are the steps.
Create a saved search with the correct criteria. Assuming you would want a transaction search on Sales Orders that are in Status = Pending Billing or Pending Billing/Partially Fulfilled (if using partial fulfillmnets)
Create a scheduled workflow using the saved search you made in step 1
In State 1 add a Transform Record action. Transform the SO into an Invoice and use the fields sublist to set additional fields as necessary. Use the Entry trigger for this action.
Set the schedule of your workflow (maybe daily or every hour) then set it to released.