Drop Ship full cycle not explained!

The Drop Ship process is not documented in full.
Since the products are not delivered to our (Erpnext User’s) warehouse, the Purchase Receipt process is not clear! Especially for items that are being tracked via Batch or Serial Number.
It sure starts with the Sales Order and selecting the “Supplier delivers to Customer” checkbox under the Drop Ship group and supplying the vendor. We do not need to modify the Item master as Drop Ship may not always be the case. (that is another problem with the documentation)
When the Sales Order is Saved and Submitted, we create the Purchase Orders. That is straightforward.
However, the last 2 steps are not clear: the Stock Inbound and Outbound process. Shall we do it with a Purchase Invoice from the vendor without Update Stock?
Then you need to seelct the Sales Order as Delivered.

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Once the item is delivered, you can change the status in PO and it will automatically update the sales order status. Then you can create purchase invoice and sales invoice against the orders. Regarding the serial number, I think you have to manually create the serial nos against the sales orders to track the warranty status.

How will we do the following if not during Sales Invoice and Purchase Invoice?
“create the serial nos against the sales orders” (and also think about items with batches please)
What if we issue the Sales Invoice first, receive the payment and issue the payment to the Vendor against their Purchase Invoice?