Kanban (which literally means “billboard” or “sign” in Japanese) is a visual work management process that is supported — in some cases — by a visual “Kanban” Board. Since its inception, the concept has been adapted by many methodologies and frameworks, and includes many variations of the original Kanban Board and System.
In Kanban’s first iteration, Kanban cards were used by Toyota to better manage inventory supply between machines. In traditional manufacturing (which is a “push” system), it’s relatively easy to know when the system is breaking down. Inevitably you see a pile of parts building up somewhere on the factory floor. Kanban was developed to prevent this from happening.
Here's how Kanban worked. Instead of every machine making parts as fast as it could, two carts were put between every machine. On one side were the two incoming carts, and on the other side were the two outgoing carts. Every cart had a "card" in it (hence the name Kanban), which said how many parts it could hold. So once an outgoing cart was full, it got sent to the next station. And once an incoming cart was empty, it got sent back to the previous machine to be filled again.
So obviously, if your incoming cart was empty, you couldn't keep working. But just as important, if your outgoing cart was full (and hadn't been replaced by the returning empty one) you also had to stop working — even if you had a full incoming cart.
This simple approach had several immediate benefits. First of all, it greatly reduced Work in Progress (WIP), and therefore inventory. It automatically adjusted the pace of work to match the slowest step in the process. And it ensured that any mistakes or errors were caught before they had been repeated too many times in an upstream process. In other words, the simple process — two carts with cards in them — made the factory run much more effectively.