I believe this was pioneered by Toyota - any one on the floor could flag that there was a problem with production or an inefficiency on the floor, and work would stop until a lasting solution was found.
EDIT - Wikipedia has more detail. Apparently the main reasons workers pulled the cord were "missing parts, safety issues, tool malfunctions and defects found/created."
Yeah it's one of the first things they tell you about in factory training. And they definitely emphasize pulling the cord (or pressing the button, depending on the line you're on) if in doubt at all.
EDIT - Wikipedia has more detail. Apparently the main reasons workers pulled the cord were "missing parts, safety issues, tool malfunctions and defects found/created."
https://en.wikipedia.org/wiki/Andon_(manufacturing)