The release of Magento 2.3 is one of the key highlights of the year for the Magento community. The new version includes lots of powerful new features and upgrades to enhance both merchant and developer experiences. This has enhanced Magento to improve in multiple ways including security, scalability, and performance.
One of the most significant feature released for Magento 2.3 is Multi Source Inventory (MSI) with which we can easily manage physical inventory across locations(source). In the earlier versions, Magento manages a single inventory system and due to this it’s really hard to manage multi-channel inventories from a single website.
What is MSI ?
Magento Multi-Source Inventory (MSI) feature helps merchants improve operational efficiency by managing inventory across multiple physical locations through a single Magento admin. This feature has replaced the Single Warehouse System or Catalog Inventory system. Sources can be grouped into stocks to create inventory pools that can be defined for one or more websites. Merchants can manipulate inventory based on sources. Magento also provides an API for source operations that helps merchants customize inventory actions or third-party order management systems to perform the same actions in an automated way.
An Example for MSI:
If a shop has got three Warehouses: Warehouse A, Warehouse B, Warehouse C and Warehouse A has got 100 products, Warehouse B has got 200 products and Warehouse C has got 50 products. Then, MSI will count the products based on each warehouses and won’t total the products up as 350 products by counting all the warehouses as one.
Whereas in the earlier versions, the scenario was like:
If a shop has got three Warehouses: Warehouse A, Warehouse B, Warehouse C and Warehouse A has got 100 products, Warehouse B has got 200 products and Warehouse C has got 50 products. Then, Magento Single Ware house System will count them as total 350 products instead of reflecting the warehouses individually along with their products.
Why is Magento 2 Multi Source Inventory Needed?
The Magento 2 Multi Source Inventory is helpful for the Admin as well as the sellers. This feature really helped for a large scale business where the seller has warehouses in different cities. MSI allows merchant to manage all inventory sources without any third-party extensions or platforms. If a seller wants to sell his products on multiple channels like Amazon, Shopify, eBay etc, MSI will help him manage the orders for Multiple Channels. Tracking the products from different warehouses at the same time becomes easy. Since Magento 2 MSI doesn’t consider multiple warehouses as one warehouse, the cost of shipping is cut down.
How to use Multi Source Inventory in Magento2
For managing inventory in Magento 2.3:
1. Manage Sources – Sellers who sell their products on different inventories in different locations can create sources for each inventory location.
2. Manage Stocks – Sellers can create sources for each channel. (ie, Magento websites) and then assign sources for each channel.
3. Manage Product Inventory – We can assign sources to a product while adding or creating a product and can assign the product available quantity for that source.
The available product quantity gets reduced when an order gets placed for an assigned source. If product source quantity is out of stock, then the customer will not be able to place an order in such a locale.
4. Order Management – When an order gets placed for the products, the source selection algorithm is used. ie ordered quantity is reserved for available source inventory. After shipment with available source ordered quantity is deducted from that source.