While I was at the 2011 ConExpo/IFPE Show, I had the opportunity to have many discussions with sellers of fluid power components and related products. The good news is that business is great for the fluid power industry. It appears to be strong across all markets.
The alert is that manufacturers and sellers of such components are having longer lead times. I think that the longer lead times stem from limited production capacity resulting from the Great Recession. As you know, companies are hesitant to put on new workers. Thus, the ability to produce is not back to maximum levels.
This leads to many complicated concerns in managing the upturn in the economy. Companies are cautious about over producing while at the same time are cautious about losing customers because they cannot deliver on time. One factor that softens this concern is that almost all products are in demand and on back order.
The smart companies will manage the upside by wisely managing inventory, production, sales, and delilvery. It seems like long lead times are a dreaded problem for sellers. It will be interesting to follow this progress in 2011 and 2012 because I expect the markets for fluid power components to continue to expand during that time period.
