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Solving Offsite’s Identity Crisis

Updated: Apr 21, 2023

If we want our industry to achieve its potential, we need to do a better job communicating the value we offer. It starts with clear definitions.

There are many reasons why offsite construction struggles to capture a significant share of the US market. Everything from newness and unfamiliarity, to our own failures and unfulfilled potential (as I’ve written about extensively in past issues), continue to produce headwinds.

One of the things that gets in our way is market confusion. By and large, the general US public doesn’t understand what offsite construction is and is not, let alone why it’s a superior solution. This confusion stems largely, I believe, from our own confusion — or at least our lack of clarity — about offsite’s identity.

This “identity crisis,” if you will, begins with nomenclature. After all, how can we effectively articulate our value proposition if we don’t have common, accurate and meaningful terminology?

We seem to have forgotten the fact that words matter, that words can be a driving force behind positive and negative results. Even the Bible notes this:

“For by your words you will be acquitted, and by your words you will be condemned.”— Matthew 12:37

Depending on whom you ask, our industry is known (even by people within the industry) by a variety of names: offsite construction, modular construction, prefab construction, modern methods of construction, industrialized construction, factory-built construction, systems-built construction, manufactured housing, panelized construction, automated construction and more.

Each of these terms carries its own meaning and connotation, in the minds of both the explainer and the explainee. No wonder some would-be buyers of what we produce still hesitate to pull the trigger, despite the fact that we offer clearly superior solutions. A confused mind will always say, “No.”

Clear Definitions

The debate over which One-Term-To-Rule-Them-All should be used to describe our industry has been picking up steam lately. I won’t attempt to settle that debate, but perhaps I can provide clarity on the meanings of the terms. That way, you will at least be able to confidently say what you mean the next time someone asks you, “So I’ve been hearing a lot about (insert one of the above terms) lately. What’s that all about?”

Let’s start with two generic terms that are commonly confused and misunderstood: “Industrialized Construction” and “Offsite Construction.”

Industrialized Construction (IC) is defined as the application of industrial methods, tools, processes and systems to the task of building a structure. Note that industrialization is NOT synonymous with automation; robots and software are merely tools of industrialization. Other tools include Lean, Six Sigma, quality control, work standardization, repeatability, mechanization, supply chain optimization and vertical integration.

It’s also important to note that the industrialization of construction is independent of location. It can take place either at the jobsite or in a factory.

Offsite Construction (OC), on the other hand, refers to the manufacture, fabrication, or assembly of components or systems of a building away from the jobsite, usually in a factory setting. These components or systems are then shipped to the site and assembled to make the building.

Ideally, OC should be a subset of IC — in other words, all offsite construction should be industrialized. In reality, there are still some OC processes that do not incorporate any type of industrialization. I call these processes “stick building under a roof.”

Non-industrialized OC is sub-optimized and will always struggle to create significant differentiation from traditional on-site construction. Currently, the relationship between IC and OC is illustrated by the diagram at the top of the page.

Industrialized Construction Modes

Again, there are many types of IC and OC, some of which are off-site and some of which are on-site. Here’s a summary.

Manufactured housing

Manufactured Housing is a traditional form of offsite construction that is governed by a special national code regulated by the Department of Housing and Urban Development (HUD). These homes are manufactured in factories, in large pieces, which are then shipped to the site for assembly. Traditionally permanently affixed to wheeled steel chassis, this type of housing enjoys a lower price point than other construction methods due to the less-stringent HUD regulations.

Volumetric Modular Construction

Volumetric Modular Construction, like Manufactured Housing, consists of large modules, or building blocks, which are then shipped to the site for assembly. Unlike Manufactured, however, Modular is regulated by the same ICC/IRC codes as traditional on-site construction and the modules are affixed to a permanent foundation.

Pod Manufacturing

Pod Manufacturing is a special subset of modular construction wherein —rather than complete modules including all parts of the building — the manufacturer makes smaller pods for the high-complexity, high-value parts of the building. These include kitchens, mechanical rooms and bathrooms. Pods are shipped to the site and inserted into place in the building.


Panelization is the manufacturing of two-dimensional wall, floor and ceiling panels. The simplest panels include the structural elements only. More complex ones can be fitted out with MEP rough-ins, insulation, interior and exterior sheathing, windows, etc.

Precast Concrete

Precast Concrete components are cast in a factory to exact specifications, then shipped to the site for installation in everything from homes to commercial buildings, to bridges.

Timber Framing

Timber Framing is a very old technology that is enjoying a resurgence in popularity due to its strength, design flexibility and compatibility with factory fabrication. Many timber frames are fabricated in automated factories with CNC-driven machinery.

Log construction

Log Construction is likewise a very old methodology, now mostly used in recreational residential buildings. The logs are precisely cut and shaped in a factory, then shipped in a kit to the site for assembly.

3D Printing

3D Printing, also known as additive manufacturing, is a modern industrial process that can be conducted either on-site or off-site. On-site, the rock-solid structure of entire buildings can be very quickly printed with robotic printing machinery out of cementitious printing material. In some cases, MEP and insulation can be added robotically as well. In a factory, 3D printing is used to manufacture building components such as facade modules, wall sections and more, which are then shipped to site for assembly.

Robotic Construction

Robotic Construction can also take place either on-site or off-site. Robots are increasingly being used in factories to very cut, machine and assemble building materials. Their usability is currently limited to the framing sub-processes such as floor, wall and roof construction. On-site, robots are being developed and deployed for tasks ranging from bricklaying to painting.

These various modes fit into the IC/OC relationship as follows:

You may be thinking, What’s the big deal about what we call ourselves? The important thing is the value we offer. It should sell itself!

That’s just the point though. A solution’s value does not sell itself; instead, customers’ awareness of a solution’s value is what sells it. And that awareness is still lacking in offsite construction.

One of the biggest impediments to offsite’s growth comes down to nothing more, or less, than good old-fashioned public relations (PR). Our industry doesn’t have a value problem; it has a PR problem. One of the fundamental building blocks of positive PR momentum is good branding, which requires consistent, positive messaging.

When it comes to the growth of offsite construction, at least in the near term, how we say what we say may be as important as how we do what we do.

Daniel Small is a Denver-based management consultant to the building industry. He specializes in Lean Construction and Manufacturing and Six Sigma methodologies. Contact him at

Published in OFFSITE BUILDER Magazine on April 1, 2023

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