Why 73% of MES Implementations Fail — And How to Pick the Right Approach
Every "build vs. buy MES" guide you've read was written by a company selling MES software. Platform vendors argue for their platform. No-code vendors argue for no-code. They're all useful reads, but none of them will tell you when their product is the wrong answer for your floor.
We build custom manufacturing execution systems. We also tell clients when off-the-shelf is the better call. This is an attempt at the guide that actually helps you decide.
What MES software actually does — and why it's uniquely hard to buy off-the-shelf
Manufacturing execution systems sit between your ERP and your shop floor. The ERP handles business logic — orders, inventory, financials. The shop floor handles physical reality — machines, operators, materials. MES translates between the two in real time: routing work orders to the right workstations, tracking WIP, enforcing quality checkpoints, collecting production data from equipment, and feeding results back upstream.
This sounds straightforward until you look at a real factory floor. Your CNC machines from 2009 communicate over Modbus. Your newer machining centers use OPC-UA. Your legacy assembly line runs a proprietary PLC protocol that predates USB. Your quality inspection process involves a torque wrench with a Bluetooth radio and a barcode scanner running firmware from 2014. Your ERP is SAP. Your shift supervisors use tablets. Your maintenance team uses paper.
This is not an unusual situation. This is most manufacturing operations. And it is the fundamental reason off-the-shelf MES software creates so much friction: the vendors built their data models around how they imagined a factory floor works, not how yours actually works.
The real cost of off-the-shelf MES
The sticker price of commercial MES software is the least relevant number in the buying decision. What matters is five-year total cost of ownership — and that number is almost always larger than manufacturers expect.
Gartner's analysis found 70% of ERP and MES implementations fail to meet their stated objectives. Discrete manufacturing specifically sees 73% failure rates with average cost overruns of 215%. As of 2023, 47% of global enterprise software implementations exceeded budget, and most projects ran 3–4x over their initial projections by project close. These numbers are not software industry anomalies. They are the predictable outcome of bending generic software to fit specific operational requirements.
The hidden costs compound in several layers. Customization is first: vendors charge $150–$300 per hour to adapt their product to your workflow — and every non-standard requirement, which is almost everything specific to your competitive operation, is billable. Integration is second: your machines, PLCs, and sensors were not designed around the vendor's API. Each integration point is a negotiation between your hardware's data format and their schema. When those integrations break at 2am during a shift, the question of who owns the fix becomes a conversation about SLA clauses. Data migration is third: production history, genealogy records, and quality data accumulated over years must be mapped, cleaned, and validated against the new system's structure. Organizations routinely discover their "clean" production database contains years of inconsistent formats, duplicate records, and missing serial number chains. Training is fourth: floor workers who have developed muscle memory around one workflow resist new interfaces that approximate but don't match their mental model. Retraining cycles add costs and reduce output during transition.
License lock-in is the most insidious long-term cost. Per-seat or per-module pricing scales with your headcount and usage. Vendors are acquired. Products reach end-of-life. New ownership changes pricing structures. The MES you selected for its fit in year one may look very different commercially in year five. Companies that choose off-the-shelf frequently spend 2–3x more on customizations, integrations, and workarounds over five years than a custom build of the same capabilities would have cost — just spread across enough invoice lines that the pattern is difficult to see until a post-mortem.
The real cost of building custom
Custom MES development has genuine disadvantages that any honest advisor will acknowledge.
Upfront cost is higher. A custom build that does what a $80,000 commercial license does will cost more in year one. Time-to-first-value is longer. A vendor demo environment can go live in days. A custom system requires requirements gathering, architecture design, development, integration testing, and floor validation. Depending on complexity, initial deployment typically runs 4–10 months.
You own the maintenance burden. When something breaks, there is no vendor support queue. The fix is on your development partner or your internal team. This is manageable with the right partner relationship and documentation, but it is a real operational responsibility.
Commodity functions are not worth building. Basic OEE reporting, standard shift scheduling, generic production dashboards — these are solved problems. Building them from scratch delays the work that actually differentiates your operation. Organizations that build MES systems from scratch for commodity functions waste development budget on wheel reinvention.
Custom development is also wrong for manufacturers who are still standardizing their processes. If your floor operations are inconsistent or evolving rapidly, a custom system encodes the current state in software. Off-the-shelf systems designed for configurability can absorb operational change more gracefully during that phase.
The five questions that determine which answer is right
How unique is your production floor? Count the number of machine types, communication protocols, and quality process steps that differ from industry standard. If the answer is high, every one of those points is a customization cost inside an off-the-shelf product. If your floor is largely standardized, commercial software was probably built with you in mind.
How many integration points does your MES need? List every system MES must exchange data with: ERP, SCADA, quality management, maintenance, inventory, customer portals. Each integration where the off-the-shelf vendor does not have a prebuilt connector is a custom project inside their platform, billed at their professional services rates, maintained by a team with incentives to keep you dependent on their services.
What does the five-year license cost look like? Take the per-seat price, multiply by projected headcount at year five, add estimated module expansion costs, then add a 30% buffer for pricing changes post-acquisition or contract renewal. Compare that number to a one-time custom build plus annual maintenance at 15–20% of build cost. The crossover point is usually visible within a few minutes of doing this math honestly.
Does your MES need to manage physical hardware? Connecting to sensors, managing edge devices, handling firmware updates for connected tooling, and processing real-time machine data at low latency are capabilities that commercial MES vendors treat as integration problems. Custom systems treat them as first-class requirements. If IoT hardware is central to your MES — not an add-on — the architectural implications favor custom development from the start.
What happens when it breaks during a shift? Identify your acceptable downtime per incident. Then read your vendor SLA carefully: what is the actual guaranteed response time for a production-blocking issue, and what does escalation look like at 3am on a Saturday? For custom systems, the answer depends entirely on your partner relationship and support agreement. Neither option is inherently better, but the tradeoffs are different — and manufacturers often discover the commercial SLA they assumed was protective is less so in practice.
Where most manufacturers actually land
The binary of "build everything" versus "buy everything" is a false choice. Most manufacturers who get this right run a hybrid: off-the-shelf for commodity functions, custom for competitive differentiators.
A precision parts manufacturer running 24/7 production might use a commercial OEE platform for standard shift reporting while building a custom real-time SPC system that enforces their proprietary quality tolerances across 200 measuring instruments — because that quality process is the core of what makes their parts worth buying. An automotive supplier might use a vendor's production scheduling module while building custom tooling integration that tracks torque data from their proprietary assembly fixtures, because that traceability is what their OEM customers require.
The strategic question is not "build or buy" — it is "which parts of our operation are competitive differentiators and which are table stakes?" Commodity functions warrant commodity software. Differentiating capabilities warrant ownership.
What integrated development actually means for MES
The technical architecture of a manufacturing execution system spans hardware and software in ways most other enterprise software doesn't. Sensors report to edge devices. Edge devices push to on-premises servers or cloud infrastructure. Servers run business logic and expose interfaces to PLCs, operator terminals, quality stations, ERP systems, and management dashboards. Mobile applications surface alerts and approvals to supervisors on the floor.
When this system is assembled from multiple vendors — a hardware integrator, an MES platform vendor, an IoT middleware provider, and an app developer — integration ownership becomes ambiguous. Each vendor's support team has a natural incentive to locate problems in adjacent systems. Incidents that span the stack without a clear owner get resolved slowly, or not at all, while production waits.
A single team that owns the full stack — from the sensor firmware to the supervisor dashboard — has a different relationship with that problem. There is no negotiation about whose API is at fault. There is a system and it is either working or it isn't, and one team is accountable for fixing it.
This is not an argument unique to custom development. It is an argument for evaluating how many organizations will be in the room when something breaks, and what accountability looks like across that relationship.
The decision in summary
Off-the-shelf MES fits manufacturers with standardized floors, limited integration complexity, shorter time horizons, and operations still in the process of formalizing their workflows. The five-year total cost is manageable when customization requirements are low.
Custom MES fits manufacturers with complex integration environments, proprietary processes that represent genuine competitive advantage, IoT hardware at the center of their data collection, and operations mature enough that the current workflow is worth encoding in software. The five-year total cost frequently comes in below off-the-shelf when integration and customization requirements are high.
The hybrid approach fits most manufacturers: evaluate each functional area independently, buy what is commodity, build what is distinctive.
The number worth spending time on before any other is the five-year TCO comparison done honestly — with realistic integration labor estimates on the commercial side and realistic build-plus-maintenance estimates on the custom side. That number, more than any product demo or analyst report, will point toward the right answer for your floor.
If you're working through this decision and want a technical conversation about what a custom build would actually involve for your operation, reach out at hello@detroitcomputing.com. We'll tell you if it makes sense.