Managing Stocks by Quantity
Inventory management maps the physical stock in real time by recording all stock-changing transactions and the resulting stock updates. An overview of the current stock situation of a material is always available. For example, you can differentiate between the following:
- Stock quantities in unrestricted-use stock
- Stock quantities in quality inspection
- Stock quantities already ordered but not yet received
- Stock quantities that are in the warehouse, but that are already reserved by the system for production or for a customer
The storage location is the organizational level on which the material's stocks are managed by quantity. Exceptions are some special stocks that are only managed at plant level (for example, customer consignment stock). Inventory management can also manage many of its own and external special types of stock, such as consignment stocks, separately from the normal stock.
Managing Stocks by Value
In addition to managing stocks by quantity, stock is also managed by value. With each goods movement, the system automatically updates the following data:
- Stock quantities and stock values for inventory management
- G/L accounts for financial accounting by means of automatic account determination
- Account assignments for cost accounting (provided the internal accounting is active)
The valuation area is the organizational level at which material’s stock value is managed.
Because we will also use the production part of SAP S/4HANA, our valuation level is at the plant level.