Crises highlight importance of risk management and resilience

Many German companies in the building and site protection segment are currently plagued by higher raw material costs, shortages due to supply chain disruptions, and a lack of skilled personnel. At the same time, the COVID-19 pandemic, natural catastrophes, and the war in Ukraine are bringing an increased need for security in their wake.

A lot of security companies are therefore finding themselves in the absurd situation of having enough orders on their books but lacking the material or personnel to carry them out. For example, only 8 percent of German electrical and digital companies say they have too few orders at present, while 90 percent are affected by supply shortfalls. Moreover, around half of these companies are reporting a lack of skilled personnel, according to industry association ZVEI. The difficulties being experienced by suppliers equally affect the perimeter protection, fencing technology and building security segments.

Better conditions to make jobs attractive

In the face of skilled personnel shortages, the BDSW (German Federal Association of the Security Industry) has for some time now been calling for a new general framework in the sector. The association is committed to ensuring that important issues like the amendment of the public procurement law and binding requirements for qualifications, training and professional development are included in the planned introduction of the new Private Security Industry Law. “We need to further improve the attractiveness of jobs, the tasks, and the sector in general to allow us to also attract enough qualified personnel in the future. We believe that it is also important to introduce basic training by accredited security industry training organisations for all new recruits to the sector,” says BDSW Chief Executive Florian Graf.

It pays for individual companies to position themselves as attractive employers. Recruiting and attracting personnel by offering employee benefits and a good working atmosphere are important for long-term success. Digital job portals or social media campaigns that allow the targeted recruitment of qualified employees are ideal tools to effectively cover the demand for new personnel.

Raw material prices and supply chain problems

However, these shortfalls are not just about personnel: There is a cumulative impact on the sector due to higher raw material prices and supply chain disruption.

The COVID-19 pandemic has shown that in some cases there is too much dependence on specific supplying countries. This applies especially to electronic components like those needed for surveillance and access control systems. Resilience and agility are therefore the new buzzwords when it comes to developing supply chains. Larger inventories instead of just-in-time deliveries are just one way of preparing for shortfalls more effectively. Another facet of crisis management is the regionalisation of sources of supply within Europe. Digitalisation tools can help when implementing these long-term strategies, which is why management consultancy KPMG recommends implementing an automated, interconnected supplier risk management system. According to KPMG, tracking tools that map the entire supply chain and allow the location of components to be determined in real time would achieve even greater transparency. Coupled with an interconnected material requirements and production planning system, this gives companies a better overview of potential instabilities. Even if these measures first have to be implemented, a comprehensive risk management strategy is crucial to ensuring the sustainability and resilience of European vendors.

At the forthcoming Perimeter Protection in January 2023, discussions will focus on how the industry in Germany and the rest of Europe is joining forces to tackle current and future crises. While some crises will hopefully have been overcome by then, the experience gained will prove valuable when dealing with future challenges. Because the next crisis is sure to come.