Fluid Power Journal

New Ideas Take Shape in the Industry

By Jeff Herrin, Vice President of R&D, Danfoss Power Solutions

Change is the only constant. While this statement rings true for every industry, those of us in off-highway equipment may be better acquainted with that fact than most.

We’re coming out of a phase of fairly steady, consistent evolution of our core fluid power technology. But up until recently, this technology was always based within the core nature of hydraulics and pneumatics to transform power — it evolved steadily over the last 50 years or so.

A sunset on fluid power?

Today, we see an explosion in the use of electronics and software to not only control the fluid power on our machines, but also enabling new levels of automation and advanced integrated solutions. Companies in our industry that specialize also in these digital competencies — rather than in fluid power alone — are gaining market share, as they work to make machines more modern in regard to full engine integration and functionality.

To make matters even more complex, we’re also experiencing change through increasing levels of regulation to machine builders. Whether it’s noise levels, efficiency standards, or strict limits on carbon emissions, the designers of off-highway machines must meet new requirements. In some cases, these strict regulations open the door to advances in technology, like electric solutions, as they operate quieter, with more control, and in some cases, emissions-free. While fluid power systems on these machines are still present, they’re no longer the only end-use power transformer present.

It is clear now that electrification is here to stay and will be a pillar in our industry. And while its market penetration is still small, it’s growing quickly every year. For companies that are tried-and-true fluid power specialists, it poses an interesting challenge: How do you stay increasingly relevant looking at the next 20 years, knowing that fluid power is not going to be the only option for OEM designers?

Evolution strategies

We see many companies in the industry taking one of two approaches. One is to join the technology party. This can look like acquisitions, partnerships or mergers, or building in-house competency in emerging and transforming technologies, like electrification. Alternatively, we also see companies that are doubling down and truly becoming best-in-industry specialists in fluid power components. The goal here is to extend their usefulness of core products through software controls and integration.

However, I believe it will be the multi-technology leaders that have the best long-term strategy to win the future. And as other companies become more targeted and niche, multi-technology businesses will also continue to drive consolidation in our industry.

The different forces that are shaping our industry today are coming at a faster pace than ever before. However, this doesn’t mean that our marketplace is going to be unrecognizable in a mere 12 months. There will always be space for those companies who are the absolute best at what they do — whether that be implementing software solutions or producing the best valve technology on the market. Companies who will continue to be set apart from the rest are those who focus on providing value adding solutions in a simple way. Speed and simplicity are always valued.

Good ideas will stand apart

The technology transformation we’re in will be measured in decades. What that means for all of us is that there’s still time to get a sustainable, long-term business plan in place to prepare for the technology shift.

Honestly, there’s never been a more interesting time to be in this industry. The pace at which we do business and the solutions we’re developing are transforming. And while this can create some uncertainty for some, it also means that new ideas and solutions are valued more than ever. Plus, with societal impacts like eliminating harmful emissions and increasing overall well-being to our citizens, there are a lot of compelling reasons to be excited about what’s happening right now.

Yes, there are challenges. But those who are addressing the challenges and creating opportunity now will be the ones shaping the future. There’s never been a better time to bring forth good ideas and ensure this industry continues to thrive.

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