Trigger Point
Commonly referred to as “TR” (Trigger Point).
A reactive Order Policy where orders are made when inventory position drops to a trigger point. Trigger Point compares re-order point levels to stock position to determine placement of orders today to maintain requisite service levels. Compared to the Time Phased (Time-Phased Safety Stock) Order Policy, the Trigger Point Order Policy is a relatively simplistic way of placing orders without looking forward in time. It is more operational/execution focused and compares inventory levels as of today. High-tech and automotive companies typically use trigger point order policy.
These are some part characteristics that would indicate that Trigger Point would be a good choice for the Order Policy for that part or SKU:
• Low volume
• Relatively inexpensive
• Less critical
• Shorter lead time
These conditions are examples of trigger points that would cause a planner to take action:
• When actual stock amounts are at or below the procurement, replenishment, or repair ROPs , procurement, replenishment, or repair order recommendations are generated for a quantity that will return inventory levels to the Stock Maximum.
• If the actual stock amount reaches the Safety Stock, a critical shortage record is posted to the Review Board.
• If the actual stock amount exceeds the Stock Maximum, an excess record is posted to the Review Board.
The Trigger Point Order Policy is limited as it does not consider:
• Sales orders
• Forecast variations by month
• Calendars