hi marco,
yes, surely i know that item tracking is the typical way to solve that. but this is a ver special customer, with very special business, warehousing, etc. processes, who uses navision and in the near future BC very out of standard within an "interesting" system architecture. i already suggested to use item tracking, but that would come along many process changes in the warehouse, employee eduction and what ever. better to say, they do not really want to do process changes like that. fortunately that topic is not my (main) topic in that project, i do different things, but a second opinion is sometimes interesting.
now i think setting Require Receive, Require Shipment on the used locations would be a simple change for them with nearly no impact. with that the item application entries are filled, connect ingoing with outgoing inventory movements.