Not sure if this is any help, but at one time my company had multiple locations, which we subsequently consolidated.  I then ran the reconciliation, and it recreated the additional locations on the items that previously had more than one, even though they did not exsist in the master location database. I had to use maintain database to fix it.    

SM-J-C will not correct serial/lot number mismatches. For instance, if location A has 5 widgets, but only 4 serial numbers available for them... that is an error that must be corrected by a human.  
 
Also, if the locations have a positive and a negative number, e.g. part 1234 shows 4 on hand in location A and -4 in location B, that is a good balance if the master says 0, but it is a problem for each location. SM-J-C doesn't seem to know what to do about that.

Some process is taking inventory from the wrong location. When I find this it usually means that someone created Work Orders for a non-inventory location. We ship equipment being sent out for customer trial from a special location, which helps us to keep our books straight and to track the items until they are either returned or paid for by the customer. If the Production Team Leader uses SO-N to create Work Orders for a trial Sales Order, he has to remember to change the WO location during the process. Otherwise, the product will get built in a different location from where the inventory is kept. As soon as that WO is backflushed... blast! Now we have 22 parts forced negative in our special shipping location. I've recently started making the person who created the Work Order fix the problem by transferring all of the parts from the inventory location into the special location. It seem to be cutting down on the location mismatch problem