Fluid power has always been an engineering niche that relies heavily on a strong distribution network. From more wide ranging PT/fluid power houses, to value added distributors with a focus on engineering solutions, to system integrators, there are a lot of options for the design engineer. But there are changes afoot as we enter the new year, and here are three key ideas to keep in mind.
1. Consolidation is real. Distributors in the hydraulic industry are feeling the need to expand and grow their business, but the current state of the hydraulic industry is holding them back. As a result, consolidation is a growing trend within the industry, as companies seek to stabilize their place in the market.
To counter the lack of growth in the industry as a whole, distributors are satisfying their need to expand through acquisitions. These acquisitions help companies achieve both lower average costs by economies of scale and maintain prices by avoiding heavy competition. By expanding the company through acquisitions, the company can more accurately predict expenses and thus reduce its risks.
Acquisitions have the added advantage of allowing the company to integrate itself into the resources and procedures of the purchased company without having to spend time and money developing its own system from scratch.
2. Online purchasing lacks support. Online shopping has been a boon for many industries, providing a massive customer base and allowing smaller companies to compete on the same field as larger businesses. But one of the disadvantages of online sales has been the lack of technical support for customers. When one orders a part from a large online store, chances are that it won’t come with any support to help answer any questions you might have about the product.
“When you buy something online, you don’t get the support for it, you don’t get the technical expertise to put it into place,” said Mike Hamzey, president and chairman of the Fluid Power Distributors Association and president of R.M. Wright Company. “If you have questions about it, it’s very tough to find someone to talk to about it.”
Difficulty in finding sales staff that can sell product and then offer technical support to customers once they have made a purchase, has led to a lack of strong customer support among distributors of all sizes.
“You’ve got to have the technical expertise to take care of the customer,” said Dudley Sheppard, product manager for Motion Industries. “Without it you can’t differentiate yourself.”
3. Workforce issues are at a critical point. A lack of visibility and recognition in the public eye has led to a shortage of students pursuing careers in the fluid power industry. As a result, it becomes difficult to find knowledgeable replacements for seasoned professionals as they retire.
“Right now it doesn’t seem like we’re feeding the work force very well out of the colleges and universities with fluid power savvy people,” said Mark Perry, president of the International Fluid Power Society.
To try and make the industry and technology more appealing to students, organizations such as the Fluid Power Distributors Association will get involved in programs like the First Robotics Competition. Founded in 1989 by Dean Kamen, an inventor and entrepreneur, First’s mission is to inspire young people to be science and technology leaders, by engaging them in mentor-based programs that build science, engineering and technology skills, that inspire innovation, and foster well-rounded life capabilities including self-confidence, communication, and leadership.
Businesses and schools alike are trying to find ways to grab the attention of new students. Professors go out to local high schools and try to inspire interest through demonstrations of the technology, while companies offer scholarships for those willing to pursue a career in the field.