One warehouse is hard enough. Multiple warehouses? That’s where things get complicated.
Different locations. Different stock levels. Products moving between them. Trying to figure out where things actually are.
But multi-location businesses exist for good reasons. Faster delivery. Regional service. Specialized storage. Growth.
Here’s how to manage inventory across multiple warehouses without losing your mind.
Why multi-warehouse is hard
You need to know what’s where
Total inventory doesn’t matter. What matters is: do you have it where the customer needs it?
100 units across five warehouses doesn’t help if the customer near warehouse 3 needs it and warehouse 3 has zero.
Transfers create complexity
Moving products between locations means tracking:
- What left
- What’s in transit
- What arrived
- When it happened
Miss any of this and your numbers are wrong.
Reorder points differ by location
What sells fast in one region might sit in another. One reorder point for all locations doesn’t work.
Reports get confusing
Do you want combined totals or location breakdown? Both, depending on the question. Your system needs to do both easily.
Setting up multi-warehouse tracking
Define your locations
Start with clear location definitions:
- Unique identifier for each warehouse
- Address and contact info
- Type (distribution center, branch, overflow storage)
- Which customers it serves
Every product should know which location it’s in.
Decide on allocation rules
When an order comes in, which warehouse fulfills it?
Options:
- Closest to customer: Fastest delivery
- Lowest cost to ship: Cheapest delivery
- Most stock: Clear inventory from fullest warehouse
- Default warehouse: Simple, one primary location
You might use different rules for different situations.
Set up location-specific data
For each product at each location, you might need:
- Current quantity
- Reorder point (can differ by location)
- Maximum level
- Bin/shelf location
- Sales velocity
More work upfront, but it pays off in accuracy.
Tracking what’s where
Real-time visibility
You need to see inventory by location at any moment. Not yesterday. Right now.
When someone sells something in warehouse 2, the number should update immediately. When warehouse 1 receives goods, same thing.
In-transit tracking
When products move between warehouses, they’re not really in either place. They’re in transit.
Track this separately:
- Stock at origin: reduced
- In-transit: created
- Stock at destination: not yet increased
When products arrive and are received, in-transit clears and destination increases.
Available vs. total
For each location, know both:
- Total stock: Everything physically there
- Available stock: What can be sold (minus reserved, damaged, etc.)
A warehouse might have 100 units total but only 60 available if 40 are reserved for orders.
Managing transfers
Transfer orders
Never just move products. Create a transfer order first.
The transfer order shows:
- Source warehouse
- Destination warehouse
- Products and quantities
- Date shipped
- Expected arrival
This creates accountability and a paper trail.
Shipping the transfer
When products leave the source warehouse:
- Reduce available stock at source
- Create in-transit record
- Record who shipped, when, how
Receiving the transfer
When products arrive at destination:
- Verify quantities match what was shipped
- Receive into destination stock
- Clear the in-transit record
- Note any variances
Handling variances
What if 100 shipped but only 95 arrived?
You need a process. Maybe:
- Check for receiving errors
- Check for shipping errors
- Adjust for actual loss
- Investigate if significant
Don’t just fix the numbers. Find out why.
Reordering across locations
Location-specific reorder points
Each warehouse needs its own reorder points based on:
- Local demand patterns
- Lead time to that location
- Storage capacity
- Customer service requirements
Don’t use averages across all locations.
Centralized vs. distributed purchasing
You can:
- Buy centrally: One PO, distribute to warehouses later
- Buy for each location: Separate POs per warehouse
- Hybrid: Central for some, direct for others
Each has trade-offs. Centralized gets better pricing. Distributed is simpler and faster.
Rebalancing stock
Sometimes one warehouse has excess while another is short. Transfer stock instead of buying more.
Run reports showing:
- Overstocked locations
- Understocked locations
- Products that should move
Make this part of your regular planning.
Reporting across locations
By-location views
For each warehouse:
- Stock levels
- Stock value
- Movement summary
- Performance metrics
This helps local managers run their sites.
Consolidated views
Across all locations:
- Total inventory
- Total value
- Combined movement
- Company-wide metrics
This helps leadership see the whole picture.
Flexible filtering
Good software lets you slice data however you need:
- Show me all products at warehouse 2
- Show me product X across all warehouses
- Show me slow-movers at every location
- Show me in-transit inventory
If you can’t get the view you need, you have the wrong software.
Common multi-warehouse mistakes
Not separating locations properly
Some businesses track location in a free-text field or notes. This doesn’t work.
Locations need to be a core data element. Separate stock quantities per location.
Ignoring in-transit
Products don’t teleport. When you transfer, there’s time in between.
If you don’t track in-transit, your numbers are wrong at both locations.
One-size-fits-all reorder points
Regional demand differs. Setting the same reorder point everywhere means you’ll have too much in some places and too little in others.
Manual transfer tracking
Tracking transfers on paper or in spreadsheets doesn’t scale. You’ll lose track. Errors will multiply.
Use your system. Create proper transfer orders.
No clear ownership
If nobody owns inventory accuracy at each location, nobody will maintain it.
Assign responsibility. Measure accuracy. Hold people accountable.
Software requirements
For multi-warehouse management, you need software that:
Tracks inventory by location: Separate quantities for each warehouse
Handles transfers: Full transfer order workflow with in-transit tracking
Supports location-specific settings: Reorder points, bin locations, etc. per warehouse
Provides flexible reporting: By location, combined, or any combination
Updates in real time: No batch processing delays
Works across sites: Accessible from any warehouse
Without these capabilities, multi-warehouse management becomes a manual nightmare.
Getting started
If you’re new to multi-warehouse or setting up a new system:
Week 1: Define locations
List all warehouses. Assign IDs. Document key information.
Week 2: Set up the system
Create locations in your software. Configure settings.
Week 3: Verify stock
Count inventory at each location. Enter accurate starting balances.
Week 4: Train staff
Train warehouse teams on proper receiving, transfers, and adjustments.
Ongoing: Monitor and adjust
Review inventory accuracy regularly. Adjust reorder points. Improve processes.
The bottom line
Multi-warehouse inventory management is complex but manageable.
Track stock by location. Handle transfers properly. Set appropriate reorder points. Get the visibility you need.
With the right processes and software, you can run multiple warehouses smoothly and know exactly what’s where.
Managing multiple warehouses? Get a demo and see how Magnofy handles multi-location inventory for distribution businesses.
