The inventory levels can be managed in several ways:
Manually updating product details (no audit trail)
Importing product details via the file import method which updates existing matched products (audit trail from external system). The similar export feature can be used to update ethe external system with reduced inventory levels from orders.
Creating invoices which automatically reduces inventory levels (audit trail from sales reporting).
So, overall the system will track reduction in inventory but not supply chain additions to inventory which is one reason why the text file import/export feature is available to integrate with supply chain solutions.