This is a part of the 2016 Distribution Trends Special Issue. The annual feature was researched and written by MDM based on interviews with dozens of distributors, industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this issue.
2016 Distribution Trends Special Issue
The slow growth environment has many distributors looking for new opportunities. But the identified markets of opportunity may seem familiar: automotive and power generation (particularly wind). Medical is also seen as a market that is "only going to grow," according to one respondent in the 2016 MDM Market Trends Survey.
Training is viewed as more important than ever, but most fluid distributors noted that they struggle to find time to provide the extended training. "We could train every day," noted one survey respondent. Distributors also say it’s a challenge to find the right resources for training, as manufacturers only "want to train on their products, not the foundational material."
Demand for e-commerce and online communication has grown, but finding a balance between meeting those demands and providing the engineered services can be a struggle. "IT is more and more important," said one fluid power distributor. "How do we communicate with customers for transactions?"
The need for product innovation is more important than ever. Demand for customized kitting has increased. End customers of fluid power products want more from those products, but they want it in as small a package as possible.
As the internet of things grows, demand has increased for the inclusion of sensors on fluid power products – for example, position and load sensors on actuators – in order to improve remote monitoring and predictive maintenance. Distributors are trying to expand their capabilities in this area through acquisition and by hiring engineers who understand the new dynamics.
Mergers & Acquisitions in 2015:
Kaman Distribution Group continued to build on its fluid power platform with the acquisition of Calkins Fluid Power.
FCX Performance acquired Process Control Services Inc.
Average growth for companies on the Fluid Power Market Leaders list: -2.4% (boosted by acquisitions)