Kanban is a card or sheet used to authorize production or movement of an item; when fully implemented, kanban (the plural is the same as the singular) operate according to the following rules:
1. all production and movement of parts and material take place only as required by a downstream operation, i.e. all manufacturing and procurement are ultimately driven by the requirements of final assembly or the equivalent.
2. the specific tool which authorizes production or movement is called a kanban. The word literally means card or sign, but it can legitimately refer to a container or other authorizing device. Kanban have various formats and content as appropriate for their usage; for example, a kanban for a vendor is different than a kanban for an internal machining operation.
3. The quantity authorized per individual kanban is minimal, ideally one. The number of circulating or available kanban for an item is determined by the demand rate for the item and the time required to produce or acquire more. This number generally is established and remains unchanged unless demand or other circumstances are altered dramatically; in this way inventory is kept under control while production is forced to keep pace with shipment volume. A routine exception to this rule is that managers and workers are continually exhorted to improve their processes and thereby reduce the number of kanban required.