Example: One Item Code, Warehouse A and Warehouse B gets their supply via transfer from Warehouse C. Currently do not have Adv Location enabled, and it seems only one Distribution Network per Item can be selected so i can say point the item to Bill of Distribution Warehouse A to C but not Warehouse B to C

I would imagine you need Multi-Location inventory setup. Check out SuiteAnswer ID: 28050 https://netsuite.custhelp.com/app/answers/detail/a_id/28050/kw/Multi-Location%20Inventory