Multi-warehouse + cross-dock + drop-ship orchestration

Industrial distributors rarely run one warehouse. Typical mid-market: 3-8 regional warehouses. Larger: 20-100+, often with cross-docks and drop-ship from manufacturers.

Magento native: Multi-Source Inventory (MSI), baked in since 2.3.0.

• Sources = warehouses. Each has its own stock per SKU.
• Stocks = customer-facing inventory pools. A stock aggregates one or more sources. You might run a us_east stock with 3 source warehouses, a us_west stock with 2, etc.
• Source selection algorithm, decides which warehouse ships each line item. Native priority-based or distance-based; for industrial, distance-based with carrier-rate awareness is the right pick.

Cross-dock pattern: customer in Atlanta orders 20 SKUs. 18 ship from your Atlanta warehouse; 2 are out-of-stock locally but available at your Chicago warehouse. Source selection routes the 2 to Chicago, ships them overnight to your Atlanta cross-dock, then consolidates into a single outbound shipment to the customer. Saves the customer a second receiving + a second freight bill. Implemented as a custom order-routing module + warehouse-management-system integration.

Drop-ship: some SKUs ship directly from the manufacturer, never touching your warehouse. Common for low-velocity, high-cost items (large motors, custom-machined parts). Pattern: source the SKU at a virtual dropship_manufacturer_x source, route a cXML PO to the manufacturer via EDI 850, ingest 856 ASN, fulfill the customer order from the drop-ship signal.

The hardest part isn’t the routing; it’s backorder + partial-fulfillment policy. Customers want to know “will my whole order arrive Tuesday or will it split-ship in 3 boxes over 5 days?” A customer-group-aware policy (Tier A wants consolidated, Tier C wants whatever’s fastest) lives in a Magento checkout extension.