Inventory Management is part of the Materials Management module and is fully integrated in the entire logistics system:

Material is procured from external or internal sources on the basis of the requirements determined by Material Requirements Planning. The delivery is entered in Inventory Management as a goods receipt. The material is stored (and managed under Inventory Management) until it is delivered to customers (Sales & Distribution), or is used for internal purposes (for example, for production).

During all transactions, Inventory Management accesses both master data (such as material master data) and transaction data (such as purchasing documents) shared by all Logistics components.

As a component of Materials Management, Inventory Management is directly linked with Material Requirements Planning, Purchasing, and Invoice Verification.

Inventory Management provides information for MRP, which takes into account not only physical stocks but also planned movements (requirements, receipts).

When a material is ordered from a vendor, Inventory Management posts the delivery as a goods receipt with reference to the purchase order. The vendor invoice is processed later by Invoice Verification. Here, the quantities and values from the purchase order and the goods receipt document are checked to ensure that they match those in the invoice.

Inventory Management is closely linked to the Production Planning module:

• Inventory Management is responsible for staging of the components required for production orders
• The receipt of the finished products in the warehouse is posted in Inventory Management.

As soon as you enter a sales order, you can initiate a dynamic availability check of stocks on hand.

When the delivery is created, the quantity to be delivered is marked as "Scheduled for delivery". It is deducted from the total stock when the goods issue is posted.

It is also possible to create sales order stocks.

In the case of a goods movement, the system determines whether the material is subject to an inspection operation. If so, a corresponding activity is initiated for the movement in the Quality Management system.

Inventory Management is linked with Plant Maintenance as follows:

• It is possible to post goods movements with reference to equipment BOMs.
• It is possible to withdraw parts for maintenance orders.
• When serial number management is active, the individual serial numbers are entered in the case of every goods movement. Serial numbers are managed in the Plant Maintenance system.

With the Inventory Controlling component, the Logistics Information System offers a tool for collecting, compressing, and evaluating inventory management data.

The Inventory Management system can be extended by the Warehouse Management system (LE-WM) which manages storage bins in complex warehouse structures.

While Inventory Management manages the stocks by quantity and value, the Warehouse Management component reflects the special structure of a warehouse, and monitors the allocation of the storage bins and any transfer transactions in the warehouse.