Manufacturing Execution Systems (MES) are often positioned as a core component of modern production operations. Yet despite decades of technological progress and a rapidly growing market, more than half of small- and medium-sized plants still manage critical shop floor activity with pen and paper or spreadsheets rather than a dedicated MES. According to IoT Analytics’ 163-page MES Market Report 2025–2031, 54 percent of small and medium plants globally rely on these manual methods as their informal MES today.
This reality reveals more than just a technology gap. It highlights deep operational, cultural, and economic barriers that manufacturers face in digital transformation. In this blog, we explore the findings of the IoT Analytics study, explain why outdated methods persist, and outline what this means for manufacturers as they modernize.
Pen and Paper Are Still the Default Shop Floor Tools
It may seem surprising that in 2025, paper logs and Excel spreadsheets remain the most common “MES” tools across many factories. But the IoT Analytics research makes clear that reliance on these methods is widespread:
- Fifty-four percent of small and medium plants use a combination of pen & paper and spreadsheets to manage production activities.
- These manual tools serve as the de facto system of record for work orders, production plans, and downtime tracking in many facilities.
- Despite the prevalence of spreadsheets, they were never designed as MES systems and lack the transactional rigor required for today’s digital manufacturing goals.
This finding should prompt manufacturers to ask a critical question: If paper and spreadsheets are so widespread, what’s holding companies back from adopting real MES solutions?
Why Manual Methods Persist
The IoT Analytics report details several reasons why paper and spreadsheets remain entrenched in production environments.
1. Familiarity and Low Barriers
Manufacturers have used spreadsheets and paper for decades because the tools are familiar and require no training. Workers know how to write on a clipboard or enter data into a spreadsheet without specialist software knowledge. This ease of use makes these methods feel “safe” and low-cost, especially in smaller operations.
2. Cost Perception
Investing in a commercial MES is often perceived as expensive. Traditional enterprise MES systems historically required significant capital expenditure (CapEx), complex installations, and long implementations. For SMEs with limited budgets, spreadsheets can feel like a free or low-risk solution by comparison.
3. Cultural Resistance
Change is difficult in manufacturing environments. Operators, supervisors, and technicians can be reluctant to shift away from paper and spreadsheets that have “always worked,” even if they know those methods are imperfect. This resistance often stems from fear of disruption, unfamiliar interfaces, and the belief that digitization is too complex or intrusive.
4. Lack of Urgency Until It Hurts
Many manufacturers tolerate manual methods until they encounter clear pain points, such as major quality issues, scheduling breakdowns, or when the business grows faster than spreadsheets can support. Without an immediate crisis, organizations may continue with spreadsheets by default.
The result of these barriers is not just operational friction but a lack of reliable, structured data that modern systems, including artificial intelligence (AI), require for advanced optimization.
Why the Shift to Real MES Matters Now
Relying on pen and paper or spreadsheets might work for small data sets or simple workflows, but these methods collapse under the complexity of modern manufacturing. IoT Analytics emphasizes that:
- Spreadsheets and paper are not reliable data sources for digital transformation initiatives.
- Modern AI, predictive analytics, and machine learning models require structured, transactional data that spreadsheets cannot reliably provide.
- To participate in future operational innovations — including advanced scheduling, predictive maintenance, and autonomous operations — manufacturers must first eliminate unstructured data sources like spreadsheets.
The report suggests that manufacturers who continue to rely on manual methods risk falling behind competitors who can leverage real-time, high-quality data to make decisions and optimize production dynamically.
The MES Market Today: More Than 300 Vendors Competing
Another striking insight from IoT Analytics is the size and fragmentation of the MES vendor landscape.
- Over 300 vendors are serving the global MES market, which reached $5.5 billion in 2024.
- These vendors range from large industrial software companies to specialized niche providers.
- Despite the crowded vendor field, the biggest competitor for MES systems is often not another software vendor, but the clipboard and spreadsheet still used on many factory floors.
This competitive landscape means manufacturers have more options than ever before when choosing MES solutions. Many vendors now focus on modular, scalable offerings that allow companies to adopt MES functionality in phases rather than committing to a full suite upfront.
Core MES Capabilities Helping Manufacturers Move Beyond Spreadsheets
According to the IoT Analytics research, many MES offerings focus on a core set of production capabilities that directly address the limitations of pen and paper or spreadsheets:
1. Work Order Management
Modern systems provide digital work order creation, dispatching, and tracking that eliminate the need for manual notes or disconnected spreadsheets.
2. Production Scheduling
MES tools enable interactive, real-time scheduling that reflects actual conditions on the shop floor. This is a significant improvement over static Excel schedules that quickly become outdated.
3. Downtime Tracking
Accurate reporting of machine and process downtime is critical for calculating availability and overall equipment effectiveness (OEE). MES systems offer automated or guided capture that is far more reliable than manual logs.
4. OEE Analysis
Unlike spreadsheets, which require manual formulas and frequent updates, MES solutions provide built-in OEE reporting, giving manufacturers a clear measure of performance across equipment and shifts.
Together, these capabilities provide much stronger support for daily decision-making than spreadsheets or paper can offer.
Emerging Trends in MES That Address SME Barriers
The IoT Analytics report also highlights several technological trends among MES vendors that are making these systems more accessible for manufacturing of all sizes.
Modular Architecture
Vendors are increasingly offering modular MES platforms that allow manufacturers to adopt a subset of functionality, such as scheduling, work orders, or OEE, without the need for a full enterprise system. This approach spreads cost and implementation risk over time.
Modular systems are ideal for plants that may not be ready for a full suite but want to move away from spreadsheets.
Unified Namespace Integration
To reduce integration complexity, some vendors are adopting unified data architectures that consolidate shop floor data streams into a consistent model. This helps ensure that systems can connect with ERP and other enterprise software more easily.
GenAI and Usability Innovations
Some MES systems are beginning to incorporate generative AI to improve usability. These features allow users to interact with MES data using natural language queries, reducing the learning curve for operators familiar only with spreadsheet interfaces.
These technological changes make modern MES systems both more capable and easier to adopt, helping manufacturers finally leave behind the spreadsheet era.
Why Manufacturers Should Move Away From Manual Methods Now
The reliance on pen and paper or spreadsheets may seem like a modest pain point, but the consequences extend far beyond clerical inconvenience:
1. Inaccurate Data Slows Decision-Making
Manual methods do not provide real-time visibility. Decisions based on yesterday’s data can lead to waste, delays, and missed opportunities.
2. Errors Accumulate Quickly
Human entry errors are frequent with spreadsheets and paper logs. These inaccuracies cascade across inventory, costing, planning, and quality control.
3. Digital Transformation Is Expensive Later
The longer a manufacturer waits to adopt modern systems, the more difficult and costly the transition becomes. Legacy data formats are challenging to reconcile with new software, and behavioral inertia increases over time.
4. Competitive Pressure Is Intensifying
Companies that digitize production gain advantages in speed, accuracy, and innovation. As IoT Analytics notes, global competition, particularly from automation-led manufacturers, is pushing others toward modernization.
The Spreadsheet Era Must End for True Manufacturing Modernization
The fact that 54 percent of small and medium plants rely on pen & paper or spreadsheets as their MES should be a wake-up call for the manufacturing industry. These methods may feel familiar and inexpensive, but they are fundamentally incompatible with the goals of digital transformation, operational excellence, and future-ready manufacturing.
Manufacturers who want to compete on efficiency, quality, and innovation need structured, real-time systems of record. This means adopting MES platforms that replace manual methods with automated, reliable data capture.
At ISE, we help manufacturers modernize their operations and replace outdated tools with solutions that support growth, integration with ERP, and digital transformation. To learn more about modern MES options and how to take the next step, visit iseteam.com.