Kanban maintains inventory levels; a signal is sent to produce and deliver a new shipment as material is consumed. Kanbans are:

• Communication devices from the point of use to the previous operation (customer to supplier).
• Purchase orders for your suppliers.
• Work orders for your manufacturing area.
• Visual communication tools.
• Paperwork eliminators.

Kanban cards are a key component of Kanban and they signal the need to move materials within a production facility or to move materials from an outside supplier into the production facility.

Diagram showing typical kanban flow in a Manufacturing facility

Above diagram shows a typical Kanban card.

Various colors and usage of Kanban Cards: Green cards for Raw materials, Yellow cards for WIP Items, Red cards for Item discarded/ Scrap, White cards for Finished Goods Items.

Three-bin Kanban System is used for the supplied parts, where there is no in-house manufacturing. One bin is on the factory floor (the initial demand point), one bin is in the factory store (the inventory control point), and one bin is at the supplier. The bins usually have a removable card containing the product details and other relevant information—the classic kanban card.