IENT
How IENT Helps Companies Comply with the German Supply Chain Due Diligence Act (LkSG)
Introduction
The German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz or LkSG) is a landmark regulation requiring companies to take responsibility for human rights and environmental standards across their supply chains. Enforced since January 1, 2023 (for companies with 3,000+ employees) and expanded in 2024 to include those with 1,000+ employees, it significantly raises the bar for ethical sourcing and transparency.
This law has widespread implications for procurement, compliance, risk management, and supplier engagement — not just in Germany but globally, as multinational supply chains come under closer scrutiny.
What is the LkSG?
The LkSG mandates that companies:
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Conduct risk analysis to identify human rights and environmental risks in their supply chains
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Implement preventive and remedial measures for non-compliance
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Maintain grievance mechanisms
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Report annually to the Federal Office for Economic Affairs and Export Control (BAFA)
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Ensure documentation is retained for at least seven years
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Integrate due diligence into procurement, especially with suppliers operating in high-risk regions
It applies to both direct and (in some cases) indirect suppliers, making supply chain traceability and accountability a business-critical function.
What is IENT?
IENT is a robust Vendor Management and Supply Chain Compliance System built to support modern procurement and supply chain needs. It includes modules for:
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Vendor Registration & Certification
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Purchase Requisition (PR), Purchase Order (PO), Invoice
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Goods Receipt (GRN), Advance Shipping Notice (ASN), Service Entry Sheet (SES)
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RFQ, Auctions, and Contracting
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Supplier Performance Tracking
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Supplier Bulletins (communications)
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Issue/Ticket Management
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Master Data Management with CSV imports and ERP sync
As regulations like LkSG push organizations toward deeper supply chain accountability, IENT offers an integrated, modular platform to streamline and digitize compliance processes.
How IENT Helps Meet LkSG Requirements
The table below outlines how IENT’s existing capabilities align with LkSG’s core due diligence obligations:
| LkSG Requirement / Problem | What IENT Provides |
|---|---|
| 1. Supply Chain Risk Visibility | IENT captures supplier transactions and master data (POs, ASNs, certifications) to offer Tier-1 supply chain visibility. |
| 2. Direct Supplier Oversight | Vendor Registration, Certification, PR/PO/GRN, and SES modules help ensure ongoing visibility and control over direct suppliers. |
| 3. Preventive Measures (Onboarding & Training) | IENT’s onboarding flow captures compliance agreements and certifications; Bulletins allow targeted awareness campaigns or policy sharing. |
| 4. Remedial Actions / Violation Handling | Issue Management / Ticketing module supports documentation, follow-up, and escalation of violations or non-compliance. |
| 5. Grievance Mechanism (Internal) | Internal complaint or issue-raising workflows can be configured in the ticketing module with access control for confidentiality. |
| 6. Supplier Risk Analysis & Scoring | IENT’s Supplier Performance Management tool allows you to define and track risk parameters (e.g., delays, quality issues, audit failures), supporting ongoing risk scoring and profiling. |
| 7. Procurement Due Diligence & Audits | Certification and performance history can inform supplier qualification; historical performance records support audit preparation. |
| 8. Supplier Communication / Updates | Supplier Bulletin App allows segmented distribution of updates, policies, and training content. |
| 9. Integration with ERP / CSV Imports | Real-time sync and CSV import capabilities allow consistent and up-to-date master data across systems. |
Conclusion
The LkSG represents a new era of responsibility for global supply chains. For companies operating in or with ties to Germany, ensuring compliance is not only a legal obligation — it’s a competitive advantage.
IENT equips organizations with the tools to operationalize due diligence, drive supplier accountability, and build a resilient, transparent supply chain.
If your organization is preparing for LkSG compliance or looking to strengthen supply chain governance, IENT offers a ready-to-use platform with proven, scalable modules.
Ready to align your supply chain with LkSG? Contact us to learn how IENT can support your compliance journey.
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