Multi-warehouse inventory
What is multi-warehouse inventory?
Multi-warehouse inventory means the quantity of each product is held separately for every location — a central warehouse, a shop floor, goods on consignment. The website then shows either the total or the stock at one chosen location. The rule for what is sellable online, and how much is held back as a buffer, is set before launch. Without it, orders arrive that nobody can fulfil.
Example
One product has 12 units: 7 in the central warehouse, 4 on the shop floor and 1 sitting with a partner on consignment. If the website shows 12, sooner or later it sells the consignment unit it cannot reach, and the shop unit that has just gone through the till.
A rule that holds: the central warehouse and the shop floor both sell online, each minus a one-unit buffer, and consignment stock is excluded. The site shows 9. At 20 orders a day and 3% cancelled for missing stock, that is 18 cancellations a month; at an average order of €45, about €810 of turnover, plus the refunds and the conversations somebody has to have.
Deciding which quantity is the sellable one
Three things are written down before launch: which locations sell online, what buffer each one keeps back, and how often the number is refreshed. The rest follows the same logic — whether stock is reserved at order or at payment, what a zero shows (a hidden product, a delivery date, a request form), which location a parcel ships from, and what happens when an order spans two warehouses. These rules are written once and save an argument every week afterwards.
Why it matters for a business
The number on the page is a promise. When it is higher than the truth, you pay in cancelled orders, refunds and customers who do not come back. When it is lower, you fail to sell goods that are sitting on a shelf. Stock by location also buys something else: you can show where a unit is available for collection instead of simply saying the product is out of stock.
What to ask
- Which warehouses and shops sell online, and what buffer does each keep back?
- How often does the figure refresh, and what is shown while the exchange is down?
- When is stock reserved — at order, at payment, or at picking?
- What does a customer see at zero, and is there a back-in-stock notice?
- How is an order with items from two warehouses handled — one parcel or two?
All of it only works when the figures come from one system and refresh on a short interval, which is the job of warehouse synchronisation.