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I am trying to sort order picking report by stock Location, but its not working.
In report designer, I edited report by sort by stock location, but still showing same.

What are the groupings in the structure?

Sorts only work within the structure of your report.

I am not sure. Attaching screenshot for your reference.

Please find the attached screenshot for grouping and sorting:

Sorting from groups always applies first so in your case the order will be by invoice number, item number and then location. To have it ordered by location first you'd need to restructure your report to either remove existing groupings, or to add a grouping on location. Hard to say from a screen shot alone but that may or may not be practical given your existing report structure.

So you are grouping by INVOICE_NUMBER then ITEM_NUMBER and within that sorting by location.

Insert a Location group between the invoice number headers and the first invoice item and now it is grouped by Invoice, Then Locaiton, then Item