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Modular/Prefab vs Traditional Construction: Why the Industry's Embracing Offsite Build Methods?

Prefabricated concrete wall panels outside construction factory

For years, as technology has burst onto the scene and has rapidly evolved, the construction and engineering industries have been experiencing a renaissance of design enhancements and new build methods for streamlining once-time-consuming processes and vanquishing inefficiencies.  

To name just a few: 

  • At long last, modernized Design-Build processes have helped eliminate design inefficiencies by relying less on third-party bids for construction plans and instead bringing the whole process under one roof.  

  • The adoption of BIM software has empowered design teams to work collaboratively with contractors as well as clients, and to mitigate risk

  • Technology has created new, improved ways for teams to build trust among customers and improve quality assurance, while at the same time revitalized prospects for careers in construction with the entrance of modern construction technologist roles.  

While certainly exciting, such vanguards arriving in one of the world’s oldest industries come with increased demand, as labor shortages have become commonplace—and increasingly, positions remain unfilled, as reported by the Bureau of Labor Statistics

One such design innovation is prefabricated construction. And while there is a certain stigma of associated expense, and resistance in some construction management circles among purists, prefabricated and prefabricated modular construction methods offer numerous benefits.  

In this article, we’ll:  

  • Unpack prefabricated construction (how it differs from traditional build methods, what advantages it offers) 

  • Offer some food for thought: How you might adopt prefab in a cost-effective manner, on any scale. 

What Is Prefab?   

Prefabricated (aka, prefab) construction is a form of offsite construction, where building components—composed of a variety of materials used in traditional buildings, such as wood, steel, and concrete—are sourced from fabrication companies and assembled later on the jobsite.  

Prefabricated wall panels being loaded on trailer

Prefabricated building materials may be delivered to a building site as complete components—with insulation, vapor control, windows, doors, electrical wiring, ducting, and cladding already put together—or they may be delivered as “open” panels to be installed, and the finishing touches added, onsite. 

Prefabricated building components might include:  

  • Roof trusses 

  • Wall panels 

  • Floor trusses 

  • Pre-cast concrete foundation walls and slabs 

  • Staircases, elevators, etc. 

Prefab vs Traditional Construction 

Prefabrication is on the rise in the construction industry, with Dodge Data & Analytics reporting that 61% expect to adopt it in at least 10% of their projects in the next three years. 

But what are the major comparisons to consider when you put prefab vs traditional construction?  

A worker in a prefabricated construction factory

Traditional construction is what many of us associate with any sort of “jobsite” or construction zone. Land is procured, upon which structures (buildings, homes, etc.) are constructed onsite, from the ground up—foundations, walls, roofs.  

Prefabricated construction flips traditional construction on its head, delivering preassembled components, either “flat” sections (paneled prefabbed construction) or complete “modules” (prefabbed modular construction), to the jobsite to be assembled there. Prefabricated construction cuts costs and mitigates labor shortages by having the majority of its built structures produced offsite by third-party manufacturers. 

Some major differences associated with prefab vs traditional construction: 

  • Construction speed: Prefabricated construction is also associated with faster build times; while traditional construction takes typically 6-16 months to finish, prefab can be completed in 6-8 weeks or less.  

  • Design. While traditional construction can be custom designed from the ground up, prefabrication, particularly prefabricated modular construction, may be limited to certain design constraints and building codes. On the other hand, modular builds are often associated with modern, forward-thinking design aesthetics that may be attractive to newer buyers. Furthermore, a hybrid approach can help meld both traditional design elements with modern-looking modules to create a contemporary look that is aesthetically pleasing and pays homage to both of these build methods.  

  • Seasonality. While traditional construction projects that are limited to prime seasons, and plagued by external factors, prefabricated constructions produce the majority of their built components indoors and offer higher quality builds.  

What Is the Difference between Modular and Prefab? 

It’s common for the terms “modular” and “prefab” to be used interchangeably, and alas, often incorrectly. There are, however, some important details that distinguish the two, and the distinction, while subtle, is worth making. While any building components that are manufactured offsite might theoretically be considered “prefabricated” (or “prefabbed” for short), modular construction is a specific type of prefabricated construction.  

When considering prefab vs modular construction methods, the distinction lies in singular components vs whole modules, “flat” pieces vs complete enclosures:   

  • Prefab construction techniques consist of manufacturing individual building components offsite in a temperature-controlled factory that are delivered to be installed onsite. These prefabbed components may be considered “flat,” like wall panels and roof trusses, and don’t by themselves enclose space. Also known as “panelized” or 2-dimensional (2D) to describe their sectional assembly, the process of installing panelized prefabbed components consists of first laying down the floor, and then carefully lowering each wall section and securing them into place, one at a time.

A prefabricated wall is craned into place

  • Modular construction: A form of prefab construction, also known as 3-dimensional (3D) or volumetric constructions, the term “module” is key to understanding what modular construction is all about. Unlike general “prefabricated” components, with modular prefab construction, entire “modules” are prefabricated offsite and delivered to be installed onsite, like LEGO® blocks being put together piece by piece. Modules refer to a specific type of prefabbed component—such as complete rooms, hallways, or sections—that encloses space. Modular construction may include relocatable modules used to handle classroom overfills in school settings as well as temporary offices, or permanent structures such as multi-story buildings, government and healthcare facilities, schools, and hotels. 

A completed modular construction "module" in a factory

What Are the Advantages of Prefabrication?  

According to a survey  conducted by Dodge Data & Analytics, the most compelling reasons that led respondents to consider adopting prefabrication and modular construction in some form included:   

  • Improves project schedule performance  

  • Decreases construction cost  

  • Helps deal with skilled labor shortages  

  • Improves project safety  

Let’s break  these  advantages of prefabrication  down a little further:  

  • Shorter build times, lower risk. There are many variables that lead to construction projects taking longer (and more expensive) than expected.  Inclement weather, for example, can delay projects by up to 21%.  This doesn’t take into account potential rework, which can be  as high as 5% of the contract value of your project.  The good news is, prefab can reduce your project’s completion time by over a third and,  according to a survey conducted by Dodge Data & Analytics, prefab increased schedule certainty by 90%.  

  • More affordable. The question on everyone’s mind:  Is prefab cheaper than building? Prefabrication can certainly keep costs down and help limit  construction cost overruns. Workers in these factories are typically more productive than field construction workers simply because they’re not hamstrung by external factors and hazards. This, plus manufacturers of these prefabbed components have the benefit of optimized logistics lean manufacturing methods, resulting in a savings of up to 10% on overall construction costs! The savings you reap from adopting prefab in some form can be passed on to your customers or reinvested in higher-quality finishes.  

  • Decreases labor shortages. Those labor shortages we discussed above,  affecting some 44% of firms, can lengthen the completion time for projects already underway. Fortunately, prefab can help with this, with almost half of GCs/CMs and trades indicating they will be very focused on modular construction’s positive impact on dealing with workforce shortages.   

  • Improved project  safety. Let’s not forget that construction is also, by nature, is a dangerous profession, with  58.6% of construction worker deaths  being caused by one of the “fatal four” leading causes of private sector working fatalities (falls, being struck by an object, electrocution, and being caught in something or between two objects industry). Offsite construction helps to mitigate these hazards and is being encouraged abroad for these reasons. Prefabrication not only helps you more strategically plan your work schedules to increase efficiencies, but also, it ranks first in Dodge Data & Analytics’ survey as the most compelling reason to increase the use of prefabrication, with 86% of respondents citing overall safety increased.  

Additional  benefits of prefabricated construction:  

  • Higher quality. Components are manufactured in temperature-controlled factory environments held to the highest standard and rigorous quality control,  similar to what you would expect from an auto plant; prefabrication reduces imperfections associated with harsh outdoor climates and other external  factors, and  delivers showroom quality pieces.  

  • Reduced environmental impact. Prefab is generally associated with increasing production efficiencies and recycling, and reducing waste and emissions, which all translates into “better for the environment.”  

Final Verdict: Fad or Fab?  

Prefabricated construction, and modular in particular, is a booming industry, which has doubled, according to the Modular Building Institute (reported in National Real Estate Investor). What’s more, the global market for modular construction is expected to reach 82.6 billion by 2025. 

Construction companies are keen to adopt prefab and modular construction methods for a couple of simple reasons:  

  • It’ s faster (cutting schedules as significant as 20-50%, according to a recent McKinsey report). 

  • It’s more accurate, with factory quality control preventing expensive rework that may traditionally emerge way further down the road.   

Aside from its many benefits, prefabrication, according to the same McKinsey study, bears a risk of 10% const increase if labor shortages are outweighed by logistics or material costs. Several factors adding or reducing the cost of materials make overall material costs difficult to predict. Additionally, the novelty of this new approach will make it logistically challenging to adopt on widespread level, at least in the present tense. Quoted in an article published by National Real Estate Investor, Mark Skender, CEO of Chicago-based design and construction firm Skender, speaks to this logistical challenge: “If modular goes mainstream, more manufacturing facilities will be needed to meet the demand for modular buildings.” Moreover, modularity complicates building codes and warrants a measured approach to data management

The interior ceiling of a factory

Still, with minor challenges to combat in adoption, prefab/modular construction offers an exciting prospect (and a compelling case is to be made) to bring one of the oldest professions into the future and solve many of its decades-old environmental challenges. Whether you’re ready to go all in on prefab or a little skeptical, there are plenty of ways to pilot these build methods on a smaller scale. 

How to Get Started with Prefab Construction  

According to the Modular Building Institute, there are 113 manufacturers currently, and you can sign up to join their directory and connect with manufacturers in your area. You can also visit to find a list of leading manufacturers.  

If you’re not ready to sign on with a full-fledged manufacturer, or worried your team is too small to justify the outside expense (owner/operators), there are ways you can adopt prefab construction ideals and practices on a budget.  

1. Think about what you can get done ahead of time.  

What work can you get done before job day, when colliding trades converge on the job? Get creative! Fastening together panels out of the back of your van next to the jobsite may seem pretty scrappy, but if it can save you some critical set up time, that’s an invaluable resource that can be capitalized on by simplifying what’s left to be done by subcontractors.  

Tradesman assembles materials out of the back of construction truck

2. Optimize work done on the job.  

Manufactured prefabrication offers the luxury of your building components being constructed in a factory setting, complete with rigorous quality control, precision assembly, and without the harsh weather and climate exposures of jobsites. However, there are ways to provide similar quality assurances to your valued clients:  

  • Utilizing power tools built with revolutionary advances in smart tool technology can go a long way in delivering the best quality installation. Electrical fasteners can be digitally configured, completed to spec, and verified via torque reporting. Precision fastening on impact wrenches delivers reliable, repeatable torque that reduces damage to materials and prevents expensive rework. Utilization data on crimpers verify if crimps were successful.   

An electrical fasten is installed with a digital torque wrench

5 Advantages of Digitizing Your Tool Inventory

  • You can also improve inventory process by how you store your tools. Streamlined/adaptable storage solutions ensure you get the most storage in your shop and in your van, limiting the amount of trips you have to spend going back and forth to the job. What’s more, when your inventory system and your tool storage system go hand-in-hand, you can coordinate tool management by sending tools in bulk and digitizing the entire process.  

A contractor pulls a Sawzall out of his PACKOUT stack drawer

Wrapping It All Up: Modular/Prefabrication vs Traditional Construction  

The construction industry has been long plagued with inefficiencies, ranging from design-induced cost overruns to a dearth in talent pools. The good news, innovations like prefabricated construction and improvements in construction inventory management can help eliminate inefficiencies and boost productivity and revenue.  


Prefabrication is a new design innovation that is a form of offsite construction that is transforming the industry by: 

  • improving project schedule performance  

  • decreasing construction cost  

  • helping deal with skilled labor shortages  

  • improving project safety  

Prefabricated construction differs from modular construction in that: 

  • Prefabrication, or paneled prefabrication, is typically associated with the manufacturing of 2-dimensional sections, like walls and slabs, while 

  • Modular construction typically refers to the manufacturing of 3-dimensional “modules” that enclose space, like entire rooms.  

Prefabricated construction, when compared to traditional construction, offers many advantages, such as: 

  • Shorter build times and lower risk 

  • Affordability  

  • Higher quality  

  • Reduced environmental impact

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