Multi-Source Inventory (MSI) allows you to manage the inventory of a product by source (location) within the Magento 2 webstore.
Magento manages a single inventory system for each product. Therefore, it gets difficult to manage multi-channel inventories for a single website.
However, after the MSI feature release in Magento 2.3 merchants can manage the inventory for each of the channels easily.
You can manage the inventory of a single product for multiple locations by allocating the sources to different locations.
This feature has come in handy to solve the inventory management within our Magento 2 POS system allowing us to create a separate set of inventories for different sources.
Magento 2 Company ? Read More
Consider that the POS system is working in offline mode and you have assigned the main product with a quantity of 100 (50 for the web store and 50 for the retail POS outlet). Now the issue that can arise is if the salesperson sells out more than 50 quantities.
Now, when the POS system comes online then there will be issues with the inventory sync. What this means is that there will be no actual physical stock available to ship for the extra orders that have come through the POS system.
This is taken care of by the MSI system, where the store owner can now create and manage the inventory of a product by location wise.
The stock assigned to the locations and each location’s respective inventory is separate from the web.