The Hidden Risks of Industrial Modernization: When Million-Euro Investments Stall
For any established business, the transition from legacy machinery to state-of-the-art automation is often framed as a leap toward efficiency. However, as seen in the recent challenges faced by the organic coffee and tea company Simon Lévelt, the path to modernization is fraught with systemic risks. When a million-euro roasting installation remains non-operational for three years, it reveals a critical vulnerability in how industrial projects are managed and executed.
The situation at Simon Lévelt—where a specially built production hall stands silent while an outdated machine is forced to carry the load—highlights a growing trend in industrial scaling: the “Integration Gap.” This occurs when the physical hardware is present, but the synergy between delivery, installation, and transport systems fails to materialize.
The “Vendor Blame Game” and the Complexity of Multi-Party Contracts
One of the most significant trends in modern industrial procurement is the fragmentation of responsibility. In the case of Simon Lévelt, Director Bert Jongsma noted that multiple parties were involved in the delivery, installation, and transport systems. When a system fails to produce, this fragmentation often leads to a lack of clarity regarding the root cause of the problem.
This “multi-vendor trap” is becoming more common as companies seek specialized experts for different parts of a production line. While this allows for best-in-class components, it creates a vacuum of accountability. When the roasting installation doesn’t work, the delivery partner may blame the installer, and the installer may blame the transport system provider.
To combat this, industry leaders are moving toward Integrated Project Delivery (IPD) models, where all stakeholders share a single contract and a collective financial incentive to reach the “operational” milestone.
The Danger of the “Sunk Cost” Production Hall
Investing in a dedicated production hall before a machine is fully operational is a high-risk strategy. When the equipment fails, the facility itself becomes a “sunk cost”—a physical reminder of lost productivity and wasted capital. This underscores the importance of phased implementation, where infrastructure is scaled only after the core technology is proven in a live environment.
The Strategic Necessity of Legacy Systems
There is a prevailing narrative that old machinery should be replaced as quickly as possible to avoid downtime. However, the Simon Lévelt experience proves that legacy systems are often the only thing keeping a business solvent during a modernization failure. The “old machine” became the company’s primary lifeline when the new investment failed to deliver.
Future trends suggest a shift toward “Hybrid Modernization.” Rather than a “rip-and-replace” approach, companies are increasingly opting to run legacy systems in parallel with new installations for extended periods. This redundancy ensures that production capacity—the heart of the business—never stops beating, even if the new technology falters.
For more on managing operational risk, see our guide on Industrial Risk Management Strategies.
Future Trends in Sustainable Production Scaling
As organic brands scale, the pressure to maintain purity and quality while increasing volume grows. The future of coffee roasting and similar food-grade industries lies in “Modular Automation.” Instead of one massive, monolithic installation, companies are moving toward smaller, interconnected modules.
Modular systems offer several advantages:
- Isolated Failure Points: If one module fails, the rest of the line continues to operate.
- Easier Troubleshooting: It is significantly easier to identify which vendor is responsible for a specific module’s failure.
- Incremental Scaling: Companies can add capacity as demand grows, rather than betting millions on a single, massive installation.
Frequently Asked Questions
Why do new industrial installations often fail to start?
Failures are rarely about the machine itself and more often about the integration. Issues with transport systems, software synchronization, or poor coordination between different installation vendors can prevent a machine from reaching production status.
How can companies avoid “million-euro flops” in automation?
By utilizing performance-based contracts, maintaining legacy systems as backups, and ensuring a single point of accountability (a lead integrator) oversees all third-party vendors.
What is the role of legal action in industrial disputes?
When a solution is not in sight and production is stalled, legal steps are often used to recover lost investments or compel vendors to fulfill their contractual obligations regarding operational output.
Join the Conversation
Have you experienced the challenges of upgrading legacy systems in your business? How do you manage vendor accountability in complex projects?
Share your thoughts in the comments below or subscribe to our newsletter for more industry insights.
